Document ID: SEC-2012-1073-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2012-07-05T04:00Z

[Federal Register Volume 77, Number 129 (Thursday, July 5, 2012)]
[Notices]
[Pages 39761-39763]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-16525]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67321; File No. SR-NYSEMKT-2012-16]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending the NYSE Amex 
Options Fee Schedule To Increase the Monthly Fee per Amex Trading 
Permit for Order Flow Providers and Clearing Members and Make a 
Conforming Change to the Current Text in the Fee Schedule

June 29, 2012.
    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 June 27, 2012, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') 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 self-regulatory organization. The 
Commission is publishing this notice to

[[Page 39762]]

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 Amex Options Fee Schedule 
(the ``Fee Schedule'') to increase the monthly fee per Amex Trading 
Permit (``ATP'') for Order Flow Providers and Clearing Members and to 
make a conforming change to the current text in the Fee Schedule. The 
proposed change will be operative on July 1, 2012. The text of 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to increase the 
monthly fee per ATP for Order Flow Providers and Clearing Members and 
to make a conforming change to the current text in the Fee Schedule. 
Specifically, the Exchange proposes to increase the fee per ATP for 
Order Flow Providers and Clearing Members from $500 per month to $1,000 
per month. The Exchange does not propose to increase the monthly fee 
per ATP for Floor Brokers. The Exchange believes that the proposed rule 
change is warranted because volume on the Exchange has increased and 
the ATP fees for these participants have not changed since March 
2009.\3\ Since March 2009, the Exchange's market share has increased 
from approximately 5% to 15%. The Exchange notes that the proposed fee 
will fall within the range of fees charged by at least one other 
exchange.\4\
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    \3\ See Securities Exchange Act Release No. 59478 (Feb. 27, 
2009), 74 FR 9857 (Mar. 6, 2009) (SR-NYSEALTR-2009-19).
    \4\ See NASDAQ Phlx Fee Schedule as of June 1, 2012, section VI 
Membership fees, where the Permit and Registration fees for a PHLX 
Member transacting business on PHLX is $2,000 per month, available 
at http://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLXTools/PlatformViewer.asp?selectednode=chp_1_4_1&manual=%2Fnasdaqomxphlx%2Fphlx%2Fphlx-rulesbrd%2F.
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    The Exchange also proposes to make conforming changes to the text 
of the Fee Schedule. Presently, the Fee Schedule refers to ``Order 
Routing'' and ``Clearing Firms'' in the context of the ATP fees charged 
on a monthly basis for a participant acting in either capacity. The 
Exchange proposes to change Clearing Firm to Clearing Member and Order 
Routing to Order Flow Provider because Clearing Firm and Order Routing 
are not defined terms in the rules of the Exchange.\5\ The Exchange is 
making this change in order to reduce any potential confusion regarding 
which fee applies.
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    \5\ See Rule 900.2NY(11) and Rule 900.2NY(57), which define 
Clearing Member and Order Flow Provider, respectively.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) \6\ of the Securities Exchange Act 
of 1934 (the ``Act''), in general, and Section 6(b)(4) \7\ of the Act, 
in particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities. The Exchange believes 
that the proposed increase in ATP fees for participants acting as Order 
Flow Providers or Clearing Members is reasonable and equitable given 
the large increase in volume since the fees were established in March 
2009. In addition, the fee increase from $500 to $1,000 per month is 
reasonable in light of the Exchange's increase in market share during 
the same time period, from approximately 5% in March 2009 to 
approximately 15% presently. The proposed rule change is equitable in 
that other participants have previously experienced fee increases 
during the same time period. For example, the ATP fee for NYSE Amex 
Options Market Makers was increased from $1,000 per month to $5,000 per 
month.\8\ In addition, the proposed fee increase is reasonable because 
it is comparable to fees offered on at least one another exchange.\9\
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ See Securities Exchange Act Release No. 61670 (March 5, 
2010), 75 FR 12325 (March 15, 2010) (SR-NYSEAmex-2010-19).
    \9\ See supra note 4.
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    The Exchange notes that it is leaving the monthly ATP fee for Floor 
Brokers at $500 per month. The Exchange believes this is both 
reasonable and equitable given the following. First, ATP Holders 
conducting a floor brokerage business are required to purchase an ATP 
for each Floor Broker that is engaged in business on the floor of the 
Exchange. In practice, such firms typically have more than one ATP to 
ensure adequate coverage on the trading floor (i.e., a single Floor 
Broker cannot be physically present in several trading crowds at the 
same time). As a result, ATP Holders conducting a floor brokerage 
business typically pay more in ATP fees than either Order Flow 
Providers or Clearing Members by virtue of the requirement that they 
have an ATP for each Floor Broker on the floor in their employ. By 
contrast, an Order Flow Provider sending agency orders to the Exchange 
for execution, either electronically or via phone for a Floor Broker to 
execute, need only purchase a single ATP each month to conduct their 
business. Similarly, a Clearing Member, sending orders to the Exchange 
electronically or utilizing a Floor Broker to represent their orders 
also is only required to purchase a single ATP to conduct their 
business. Further, while the Exchange has seen increases in volume and 
market share, the amount of open outcry volume has remained steady over 
time and as a result has actually decreased as a percentage of overall 
Exchange volume. Consequently, Floor Brokers and other on floor 
participants may have not benefited from the overall increase in 
Exchange volumes and market share as have other participants.
    The Exchange believes the proposed change is not unfairly 
discriminatory as it will apply to all participants who act as either 
Order Flow Providers or Clearing Members equally. Also, the Exchange 
believes that increasing the fees applicable to Order Flow Providers 
and Clearing Members while leaving the ATP fee applicable to Floor 
Brokers is not unfairly discriminatory given the nature of the volume 
increases coupled with the fact that most ATP Holders conducting a 
Floor Broker business are already paying more than $500 per month as 
they are required to purchase an ATP for each Floor Broker in their 
employ--whereas that is not the case for Order Flow Providers and 
Clearing Members.
    The Exchange also believes that the proposed conforming changes to 
terms

[[Page 39763]]

in the Fee Schedule will add clarity and reduce any potential confusion 
among market participants.

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

    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.

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) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the NYSE MKT.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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.

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-2012-16 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEMKT-2012-16. 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 
a.m. and 3 p.m. Copies of such 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-2012-16 and should 
be submitted on or before July 26, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-16525 Filed 7-3-12; 8:45 am]
BILLING CODE 8011-01-P