Document ID: SEC-2016-0848-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2016-05-17T04:00Z

[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Notices]
[Pages 30583-30585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11544]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77814; File No. SR-NYSEMKT-2016-50]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Change Modifying the NYSE Amex 
Options Fee Schedule

May 11, 2016.
    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 April 28, 2016, 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 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 modify the NYSE Amex Options Fee Schedule 
(``Fee Schedule''). The Exchange proposes to implement the fee change 
effective May 2, 2016. The proposed 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 purpose of this filing is to modify the definition of a Firm 
Facilitation trade to include Broker-Dealers, which would be consistent 
with the treatment of such transactions on another options market. The 
Exchange proposes to implement the change effective on May 2, 2016.
    The current Fee Schedule defines a ``Firm Facilitation'' trade as 
``a Manual trade that is executed in open outcry, in which one 
counterparty clears in the Firm range at the OCC, the other 
counterparty clears in the Customer range at the OCC, and both 
counterparties have the same Clearing Member symbol or 
identification.'' \4\ Firm Facilitation trades are not subject to 
transaction charges and are only subject to Royalty Fees.\5\
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    \4\ See Fee Schedule, Terms and Definitions, available here, 
https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
    \5\ See id., Fee Schedule, sections I. A. and B. (providing that 
Firm Facilitation trades are executed at the rate of $0.00 per 
contract) and K. (providing that Firm Facilitation trades are 
subject to Royalty Fees). The Exchange notes that Royalty Fees (or 
license fees) apply to certain classes of options and such fees are 
passed-on by the Exchange to the actual participants executing the 
trade.
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    The Exchange proposes to modify the definition of Firm Facilitation 
to include Manual trades clearing in the

[[Page 30584]]

Broker-Dealer range at the OCC.\6\ The Exchange notes that this 
proposal would align its definition of a Firm Facilitation trade with 
that of another options exchange. Specifically, the fee schedule for 
NYSE Arca provides that firm facilitation trades are manual trades that 
apply to ``any transaction involving a Firm proprietary trading account 
that has a customer of that same Firm on the contra side of the 
transaction, or a broker dealer facilitating a Customer order, where 
the broker dealer and the Customer both clear through the same clearing 
firm and the broker dealer clears in the customer range.'' \7\
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    \6\ See proposed Fee Schedule. Per the Fee Schedule, a ``Firm'' 
means a Broker-Dealer that is not registered as a dealer-specialist 
or Market Maker that is an ATP Holder on the Exchange, per Rule 
900.2NY(28) and a ``Broker-Dealer'' is an entity registered pursuant 
to section 15 of the Exchange Act, per Rule 990NY(3). See Fee 
Schedule, supra n. 4.
    \7\ See NYSE Arca fee schedule, Endnote 7, available here, 
https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf (describing Firm Facilitation and 
Broker Dealer facilitating a Customer--Manual). NYSE Arca likewise 
does not charge transaction fees for firm facilitation trades.
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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, 
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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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed modification to the 
definition of Firm Facilitation trades is reasonable, equitable and not 
unfairly discriminatory because it would align the scope of such trades 
with how trades are characterized on at least one other options 
exchange, thereby encouraging greater harmonization across exchange. 
Additionally, the Exchange believes the proposed change is consistent 
with the Act because they it attract greater volume and liquidity to 
the Exchange, which would 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.
    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,\10\ 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 the proposed amendment 
is pro-competitive as expanding the definition of Firm Facilitation 
trades consistent with other markets may encourage additional order 
flow to be direction to the Exchange and any resulting increase in 
volume and liquidity to the Exchange would benefit all Exchange 
participants through increased opportunities to trade as well as 
enhancing price discovery.
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    \10\ 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) \11\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \12\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \13\ 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

     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-2016-50 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-2016-50. 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 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; 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-2016-50, and should 
be submitted on or before June 7, 2016.

[[Page 30585]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11544 Filed 5-16-16; 8:45 am]
 BILLING CODE 8011-01-P