Document ID: SEC-2017-1692-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American LLC
Posted Date: 2017-10-12T04:00Z

[Federal Register Volume 82, Number 196 (Thursday, October 12, 2017)]
[Notices]
[Pages 47588-47590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21998]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81828; File No. SR-NYSEAMER-2017-22]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change To Modify the 
NYSE American Options Fee Schedule

October 5, 2017.
    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 October 4, 2017, NYSE American LLC (the ``Exchange'' or 
``NYSE American'') 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 American Options Fee 
Schedule (``Fee Schedule''). The Exchange proposes to implement the fee 
change effective October 4, 2017.\4\ 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.
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    \4\ The Exchange originally filed to amend the Fee Schedule on 
September 29, 2017 (SR-NYSEAmer-2017-20) and withdrew such filing on 
October 4, 2017.
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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 Fee Schedule, effective 
October 4, 2017. Specifically, the Exchange proposes to (i) modify the 
monthly rates for certain American Trading Permits (each an ``ATP''); 
and (ii) reduce the Messages to Contracts Traded Ratio Fees.
Monthly ATP Fees
    NYSE American Market Makers (each, an ``MM'') must have a certain 
number of ATPs each month in order to submit electronic quotations in 
option issues in their appointment.\5\ The Exchange currently employs a 
sliding scale for the cost to each MM per ATP, with the amount 
decreasing as the number of ATPs utilized increases, as follows: \6\
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    \5\ See Fee Schedule, Section III.A. (Monthly ATP Fees), 
available here, https://www.nyse.com/publicdocs/nyse/markets/american-options/NYSE_American_Options_Fee_Schedule.pdf.
    \6\ See id. (providing, in relevant part, that ``[e]ach calendar 
quarter, with a one-month lag, the Exchange will publish on its Web 
site a list of the Bottom 45% of issues traded'').

------------------------------------------------------------------------
                                                     Number of issues
                                   Monthly fee    permitted in a market
            ATP type                 per ATP          makers quoting
                                                        assignment
------------------------------------------------------------------------
MM 1st ATP.....................          $8,000  60 plus the Bottom 45%.
MM 2nd ATP.....................           6,000  150 plus the Bottom
                                                  45%.
MM 3rd ATP.....................           5,000  500 plus the Bottom
                                                  45%.
MM 4th ATP.....................           4,000  1,100 plus the Bottom
                                                  45%.
MM 5th ATP.....................           3,000  All issues traded on
                                                  the Exchange.
MM 6th or more ATPs............           2,000  All issues traded on
                                                  the Exchange.
------------------------------------------------------------------------

    Thus, an MM that would like the privilege of quoting in all issues 
traded on the Exchange must have at least five ATPs. And, if an MM firm 
sponsors multiple individual MMs, the MM firm must pay for the 
requisite number of ATPs for each individual MM to submit quotes on the 
Exchange. For example, assume an MM firm has three individual MMs and 
that each MM needs to be able to submit quotes in all issues traded on 
the Exchange. In this example, the MM firm would have to pay for 15 
ATPs (five for each individual MM).

[[Page 47589]]

    The Exchanges proposes to modify its monthly ATP rates such that it 
will charge $2,000 for the 6th, 7th, 8th, and 9th ATP and would charge 
$500 per month for the tenth or additional ATPs. The Exchange believes 
that this proposed reduction in ATP fees would encourage MM firms to 
have more individual MMs to quote on the Exchange, which will in turn 
encourage liquidity and depth of markets.
Messages to Contracts Traded Ratio Fees
    The Exchange proposes to modify the Messages to Contracts Traded 
Ratio Fees (``Messages Fee''), which are assessed as part of the 
Monthly Excessive Bandwidth Utilization Fees.\7\ Currently, the 
Exchange charges $0.01 per 1,000 messages (including orders or quotes) 
in excess of 1.5 billion messages in a calendar month if the ATP Holder 
does not execute at least 1 contract for every 1,500-5,000 messages 
entered, as determined by the Exchange.\8\ The Exchange proposes to 
reduce this rate from $0.01 to $0.005. The Exchange believes this 
reduced rate would still encourage market participants to be rational 
and efficient in the use of the Exchange's system capacity.
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    \7\ See Fee Schedule, Section II (Monthly Excessive Bandwidth 
Utilization Fees) (``EBUF'') (describing both the Messages to 
Contracts Traded Ratio Fee and the Order to Trade Ratio Fee, which 
comprises the EBUF, and noting that if an ATP Holder is liable for 
either or both fees in a given month, that firm would only be 
charged the greater of the two fees). The Exchange is not modifying 
the Order to Trade Ratio Fees.
    \8\ Currently, the Exchange has set the ratio at 1 contract for 
every 5,000 messages.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\9\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\10\ 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed change to ATP fees is 
reasonable and not unfairly discriminatory because the fees are within 
the general range of similar fees assessed for trading permits on other 
exchanges.\11\ In addition, the proposed change relates to the cost of 
ATPs for MMs and are therefore are not unfairly discriminatory to non-
MMs because only MMs are required to submit quotations as part of their 
obligations to operate on the Exchange (resulting in the need for 
multiple ATPs). To the extent that the proposed fee encourages MM firms 
to have more individual MMs quoting on the Exchange, all market 
participant would benefit from competitive quoting that would increase 
opportunities to trade and enhance price discovery.
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    \11\ See Chicago Board of Options Exchange (``CBOE'') fee 
schedule, Market-Maker Trading Permit Sliding Scale, p. 7, available 
here, http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf 
(charging $5,000 per trading permit for the first ten permits); NYSE 
Arca Options Fee Schedule, NYSE Arca GENERAL OPTIONS and TRADING 
PERMIT (OTP) FEES, available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf 
(imposing a sliding scale of fees, starting at $6,000 per month for 
the first trading permit down to $1,000 per month for the fifth and 
additional permits).
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    The Exchange also believes that the proposed reduction in the 
Messages Fees is reasonable, equitable, and not unfairly discriminatory 
because it should still encourage market participants to be rational 
and efficient in the use of the Exchange's system capacity, which 
benefits all market participants. The proposed reduced fee is 
reasonable because it would apply to all market participants that are 
subject to the Messages Fee.

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

    In accordance with Section 6(b)(8) of the Act,\12\ 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 changes to 
the ATP fees are pro-competitive because the changes are consistent 
with similar fees on other options exchanges.\13\ The proposed change 
does not impose an undue burden on non-MMs as only MMs require multiple 
ATPs to satisfy quoting obligations on the Exchange. To the extent that 
the proposed change results in more competitive quoting, the proposed 
change is pro-competitive and should result in increased opportunities 
to trade as well as enhanced price discovery to the benefit of all 
market participants.
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    \12\ 15 U.S.C. 78f(b)(8).
    \13\ See supra note 11.
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    Similarly, the changes to the Messages Fees would not place an 
unfair burden on competition as it would continue to encourage 
efficient use of Exchange bandwidth and would apply to all market 
participants that are subject to the Messages Fee.
    To the extent that these purposes are achieved, the Exchange 
believes that the proposed changes would enhance the quality of the 
Exchange's markets and increase the volume of orders directed to the 
Exchange. In turn, all the Exchange's market participants would benefit 
from the improved market liquidity. If the proposed changes make the 
Exchange a more attractive marketplace for market participants at other 
exchanges, such market participants are welcome to become ATP Holders.
    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) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 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.

[[Page 47590]]

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-NYSEAMER-2017-22 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-NYSEAMER-2017-22. 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-NYSEAMER-2017-22, and should 
be submitted on or before November 2, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2017-21998 Filed 10-11-17; 8:45 am]
 BILLING CODE 8011-01-P