6216 Federal Register / Vol. 87, No. 23 / Thursday, February 3, 2022 / Notices 

24 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://www.nyse.com/traderupdate/history#110000322291. See also Securities 

Exchange Act Release No. 92304 (June 30, 2021), 86 

FR 36440 (July 9, 2021) (SR–NYSEArca–2021–47) 

(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. 4 to SR–NYSEArca–2021–47, 

available here: https://www.sec.gov/comments/srnysearca-2021-47/srnysearca202147-20112491- 

265389.pdf. 

6See Fee Schedule, RATIO THRESHOLD FEE, 

available here: https://www.nyse.com/publicdocs/ 

nyse/markets/arca-options/NYSE_Arca_Options_

Fee_Schedule.pdf; see also Securities Exchange Act 

Release No. 60102 (June 11, 2009), 74 FR 29251 

(June 19, 2009) (SR–NYSEArca–2009–50). 

7See id. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(4) and (5). 

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–NYSEAMER–2022–08, and 

should be submitted on or before 

February 24, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–02181 Filed 2–2–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94095; No. SR–NYSEArca– 

2022–04] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the NYSE Arca 

Options Fee Schedule 

January 28, 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 

25, 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 provide for a waiver 

of the Ratio Threshold Fee 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 waive the Ratio 

Threshold Fee 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 Ratio Threshold Fee is based on 

the number of orders entered as 

compared to the number of executions 

received in a calendar month and is 

intended to deter OTP Holders and OTP 

Firms (collectively, ‘‘OTP Holders’’) 

from submitting an excessive number of 

orders that are not executed.6 Because 

order to execution ratios of 10,000 to 1 

or greater have the potential residual 

effect of exhausting system resources, 

bandwidth, and capacity, such ratios 

may create latency and impact other 

OTP Holders’ ability to receive timely 

executions.7

The Exchange proposes to modify the 

Fee Schedule to specify that the 

monthly Ratio Threshold Fee assessed 

to OTP Holders will be waived for the 

duration of the migration and for three 

calendar months after the migration. 

Specifically, the Exchange proposes that 

the waiver of the Ratio Threshold Fee 

take effect for the month during which 

the migration begins and remain in 

effect for three months following the 

month in which the migration is 

completed (the ‘‘Waiver Period’’). The 

Exchange believes that waiving Ratio 

Threshold Fees during the Waiver 

Period will give both OTP Holders and 

the Exchange an opportunity to adjust to 

new functionality and new order 

handling mechanisms without imposing 

a financial burden on OTP Holders 

based on their order to execution ratios 

during the Pillar transition. In addition, 

during the Waiver Period, the Exchange 

intends to work closely with OTP 

Holders to monitor traffic rates and their 

order to execution ratio as they adapt to 

trading on the Pillar platform. 

The Exchange proposes to implement 

this change beginning in the month 

during which it commences its 

migration to the Pillar platform. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,8 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,9 in particular, 


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Federal Register / Vol. 87, No. 23 / Thursday, February 3, 2022 / Notices 6217 

10See Securities Exchange Act Release No. 51808 

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

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

11The 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. 

12Based 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 9.65% for the month of December 

2020 to 13.21% for the month of December 2021. 

13See, e.g., Securities Exchange Act Release No. 

88596 (April 8, 2020), 85 FR 20796 (April 14, 2020) 

(SR–NYSEArca–2020–29) (waiving Floor related 

fees in connection with COVID–19 precautionary 

measures). 

14See Reg NMS Adopting Release, supra note 10, 

at 37499. 

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.’’ 10

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.11

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity & 

ETF options order flow. More 

specifically, in December 2021, the 

Exchange had less than 14% market 

share of executed volume of multiplylisted equity & ETF options trades.12

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. In 

response to this competitive 

environment and to adapt to 

extenuating circumstances, the 

Exchange has previously waived fees on 

a temporary basis.13

The Exchange believes that the 

proposed waiver of Ratio Threshold 

Fees is reasonably designed to continue 

to incent OTP Holders to maintain 

active participation on the Exchange 

during and after its migration to a new 

trading platform. The Exchange further 

believes that the proposed waiver is 

reasonably designed to lessen the 

impact of the migration on OTP Holders 

and would thus encourage OTP Holders 

to promptly transition to the more 

efficient Pillar technology platform, 

while enabling them to adjust their 

trading activity on the Exchange as 

needed to transition to Pillar without 

incurring excess Ratio Threshold Fees 

during the Waiver Period. 

To the extent the proposed rule 

change encourages OTP Holders to 

migrate to the new 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 

rule change is an equitable allocation of 

its fees and credits because the waiver 

would be offered to all OTP Holders. All 

OTP Holders would thus have the 

opportunity to moderate their order 

flow as needed and familiarize 

themselves with the new system during 

the Waiver Period without incurring 

Ratio Threshold Fees. 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 proposed 

waiver of Ratio Threshold Fees is not 

unfairly discriminatory because it 

would be available to all similarlysituated market participants on an equal 

and non-discriminatory basis. 

The proposed waiver would permit 

all OTP Holders to maintain the same 

level of interaction or adjust their 

proprietary systems and order 

submission to the Exchange as needed 

during the Waiver Period without 

incurring additional fees based on their 

monthly order to execution ratios, 

which could fluctuate as they adapt to 

the Pillar platform. The Exchange thus 

believes that the proposed change 

would support continued trading 

opportunities for all market 

participants, thereby promoting just and 

equitable principles of trade, removing 

impediments to and perfecting the 

mechanism of a free and open market 

and a national market system and, in 

general, protecting 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.’’ 14

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 would be eligible for 

the waiver of their Ratio Threshold Fees 

beginning in the month during which 

the Exchange begins the Pillar 

migration, and the waiver would remain 

in effect for three full months after the 

month during which the migration to 

Pillar is completed. 

Intermarket Competition. The 

Exchange operates in a highly 


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6218 Federal Register / Vol. 87, No. 23 / Thursday, February 3, 2022 / Notices 

15See supra note 11. 

16Based 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 9.65% for the month of December 

2020 to 13.21% for the month of December 2021. 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(2). 

19 15 U.S.C. 78s(b)(2)(B). 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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.15

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity & 

ETF options order flow. More 

specifically, in December 2021, the 

Exchange had less than 14% market 

share of executed volume of multiplylisted equity & ETF options trades.16

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 to prevent excessive 

use of Exchange systems are constrained 

by the robust competition for order flow 

among exchanges. Accordingly, the 

Exchange believes that the proposed 

change 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 or make 

adjustments as needed during the 

transition to Pillar platform, without 

incurring fees based on their monthly 

order to execution ratios during the 

Waiver Period, thus 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) 17 of the Act and 

subparagraph (f)(2) of Rule 19b–4 18

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) 19 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–2022–04 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–NYSEArca–2022–04. 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 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–2022–04, and 

should be submitted on or before 

February 24, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–02184 Filed 2–2–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94097; File No. SR– 

NASDAQ–2022–011] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Equity 7, Section 114 and Section 118 

of the Fee Schedule 

January 28, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on January 

27, 2022, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) 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. 


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