Document ID: SEC-2016-1216-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2016-07-14T04:00Z

[Federal Register Volume 81, Number 135 (Thursday, July 14, 2016)]
[Notices]
[Pages 45590-45591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16602]

[[Page 45590]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78260; File No. SR-NYSEArca-2016-95]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Options Fee Schedule

July 8, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 1, 2016, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``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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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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''). The Exchange proposes to implement the fee change 
effective July 1, 2016. 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.

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 certain fees charged for 
Options Trading Permits (each an ``OTP'') and to decrease the fee 
charged to registered floor personnel who are not subject to an OTP 
Fee. The Exchange proposes to implement the changes effective July 1, 
2016.
    Currently, the Exchange charges Floor Brokers, Office, and Clearing 
participants a monthly fee of $1,000 for the first OTP and $250 per 
month for each additional OTP.\3\ The Exchange proposes to reduce the 
monthly OTP fee charged to Floor Brokers to $500, which is consistent 
with trading permit fees charged to similarly situated market 
participants on other options markets.\4\ The Exchange would continue 
to charge Office and Clearing participants a monthly OTP Fee of $1,000.
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    \3\ See Fee Schedule, available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf.
    \4\ See NYSE Amex Options Fee Schedule, Section III.A. (Monthly 
ATP Fees), available here, https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf (charging 
Floor Brokers monthly fee of $500 per ATP).
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    In addition, the Exchange proposes to eliminate the reduced ($250) 
monthly for any of these participants and to delete the language 
stating that additional OTPs utilized by a Floor Broker would not 
enable a second Floor Broker to operate on the Floor. As an initial 
matter, Office and Clearing participants would rarely, if ever, require 
a second OTP, so eliminated the reduced $250 would have little to no 
practical impact on these participants. Regarding Floor Brokers, 
historically each Floor Broker could only log in to a single Floor 
Broker Order Capture Device (``FBOCD''), which provided access to the 
Exchange-sponsored Floor Broker Order Capture System.\5\ This 
limitation was required because the Floor Broker's log-in was used to 
populate ``Executing Broker'' fields within the FBOCD system. Thus, in 
order to conduct business at various locations on the Floor, Floor 
Brokers needed to be able to log in to multiple FBOCD and therefore 
would request additional OTPs. However, these additional OTPs were 
assigned to the same individual Floor Broker and were not used to 
provide for a second Floor Broker to operate on the Floor. In recent 
years, however, the Exchange has upgraded and modified its System such 
that each log-in permits Floor Brokers access to the System from any 
FBOCD, whether located in a Floor Broker's booth or a general access 
device located on the Trading Floor. As a result of this improved 
remote access, Floor Brokers no longer require additional OTPs to 
conduct business on the Floor. Therefore, the Exchange proposes to 
eliminate the provision and the associated reduced Fee.
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    \5\ The FBOCD is used by Floor Brokerage operations to comply 
with the requirements of Rule 6.67, Order Format and System Entry 
Requirements, namely, the systemization of order details and 
electronic tracking of all events in the life of an order, up to and 
including cancellation or execution.
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    The Exchange also proposes to reduce the Options Floor Access Fee 
(``Access Fee'') that is currently charged to registered personnel who 
work on the Floor, but do not require an OTP as they do not execute 
trades. The Exchange proposes to reduce the monthly Access Fee from 
$130 to $125, which is consistent with fees charged by other options 
exchanges for similarly situated floor personnel.\6\
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    \6\ See supra n. 5 [sic], NYSE Amex Options Fee Schedule, 
Section III.A. (Floor Access Fee) (charging $125 per month for all 
registered Floor personnel that do not pay Monthly ATP Fees).
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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 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that modifying the OTP Fee for Floor Brokers 
is reasonable, equitable, and not unfairly discriminatory because the 
reduced fee would apply to all Floor Brokers who, unlike other market 
participants (i.e., Office and Clearing Participants), are restricted 
to conduct business only on a manual basis on the Trading Floor. The 
Exchange believes that the proposed changes would encourage 
competition, including by reducing the overhead costs for Floor Brokers 
so that they may conduct a more competitive business attracting manual 
orders to the Exchange, which additional volume and liquidity would 
benefit all Exchange participants through increased opportunities to 
trade as well as enhancing price discovery. Further, because Office and 
Clearing Participants rarely if ever require a second OTP, the proposed 
removal of the reduced ($250) fee would have little to no impact on 
them. Additionally, the proposed fee changes is [sic] reasonable 
because it is similar to trading permit fees charged by another options 
exchange to similarly situated market participants.\9\
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    \9\ See supra n. 5 [sic].
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    The Exchange also believes that the proposed modification in the 
Access

[[Page 45591]]

Fees is reasonable, equitable, and not unfairly discriminatory as the 
Access Fee is charged to all registered personnel that operate on the 
Floor but do not execute transactions. The proposed fee is equitable 
and not discriminatory as it applies equally to all similarly situated 
individuals. Additionally, the proposed fee is reasonable because it is 
similar to fees charged by another options exchange to similarly 
situated floor personnel.\10\
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    \10\ See supra n. 7 [sic].
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    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,\11\ 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 changes would encourage competition, including by reducing the 
overhead costs for Floor Brokers so that they may conduct a more 
competitive business attracting manual orders to the Exchange, which 
would make the Exchange a more competitive venue for, among other 
things, order execution and price discovery.
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    \11\ 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) \12\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \13\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 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 proposal 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 No. SR-NYSEArca-2016-95 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 No. SR-NYSEArca-2016-95. 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 No. SR-NYSEArca-2016-95, and should be 
submitted on or before August 4, 2016.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2016-16602 Filed 7-13-16; 8:45 am]
 BILLING CODE 8011-01-P