Document ID: SEC-2016-2005-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2016-11-17T05:00Z

[Federal Register Volume 81, Number 222 (Thursday, November 17, 2016)]
[Notices]
[Pages 81182-81184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27602]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79291; File No. SR-NYSEArca-2016-144]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Options Fee Schedule Effective November 3, 2016

November 10, 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 November 3, 2016, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') 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 the 
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 November 3, 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to amend the Fee Schedule effective 
November 3, 2016. Specifically, the Exchange proposes to (i) modify the 
qualification for Tier 6 of Customer and Professional Customer Monthly 
Posting Credit Tiers and Qualifications in Penny Pilot Issues (the 
``Posting Tiers''); and (ii) modify one aspect of the Customer and 
Professional Customer Incentive Program.
    Currently, to qualify for Tier 6 of the Posting Tiers, OTP Holders 
and OTP Firms (``OTPs'') must execute at least 0.50% of Total Industry 
Customer equity and ETF option ADV (``TCADV'') from Customer and 
Professional Customer posted orders in all issues (``the options 
component''), plus executed ADV of 0.70% of U.S. equity market share 
posted and executed on NYSE Arca Equity Market (``the equity 
component''). OTPs that achieve Tier 6 are eligible to receive a $0.48 
credit applied to posted electronic Customer and Professional Customer 
executions in Penny Pilot Issues.
    In addition, the Customer and Professional Customer Incentive 
Program (``the Incentive Program''), which provides OTPs six 
alternatives to earn additional posting credits ranging from $0.01 to 
$0.05, currently affords OTPs the ability to earn an additional $0.03 
credit on Customer and Professional Customer Posting Credits by meeting 
the same 0.70% minimum qualification of the equity component as set 
forth in Tier 6.
    The Exchange is proposing to modify Tier 6 of the Posting Tiers by 
reducing the options component from 0.50% TCADV to 0.35% TCADV, while 
increasing the threshold of the equity component from 0.70% to 0.80% of 
U.S.

[[Page 81183]]

equity market share posted and executed on NYSE Arca Equity Market.
    In addition, to maintain parity with the Incentive Program that 
likewise offers a credit when an OTP meets the same 0.70% minimum 
qualification of the equity component as set forth in current Tier 6, 
the Exchange similarly proposes to increase this qualification basis. 
Specifically, the Exchange proposes to increase the equity threshold 
alternative from 0.70% to 0.80% of U.S. equity market share posted and 
executed on NYSE Arca Equity Market qualification in order for OTPs to 
qualify to earn an additional $0.03 credit.
    The Exchange believes that the proposal to modify Tier 6 of the 
Posting Tiers by reducing the option component, while increasing the 
equity component would encourage greater participation on both the 
options and equity exchanges. The Exchange likewise believes that the 
proposed change to the Incentive Program would operate to maintain 
parity with the similar, alternative incentives offered by the Exchange 
and would also encourage participation in the NYSE Arca Equity Market.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\5\ 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed to modifications to the 
qualifications for Tier 6 of the Posting Tiers, and the similar 
adjustment to the Incentive Program, are reasonable, equitable, and not 
unfairly discriminatory because the changes are designed to attract 
additional Customer and Professional Customer electronic equity and ETF 
option volume to the Exchange, which would benefit all participants by 
offering greater price discovery, increased transparency, and an 
increased opportunity to trade on the Exchange. The Exchange believes 
that adjusting the methods for achieving the credits available on the 
Exchange (i.e., by reducing the qualification basis for the options 
component, while increasing the qualification basis for the equity 
component) is reasonable, equitable and not unfairly discriminatory 
because it would encourage more OTPs to direct both options and equity 
volume to the Exchange in an effort to qualify for the credits.
    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,\6\ 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 continue to encourage competition, including by 
attracting additional liquidity to the Exchange, which would continue 
to make the Exchange a more competitive venue for, among other things, 
order execution and price discovery. The Exchange does not believe that 
the proposed change would impair the ability of any market participants 
or competing order execution venues to maintain their competitive 
standing in the financial markets.
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    \6\ 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. Because competitors are free to modify their own fees and 
credits in response, and because market participants may readily adjust 
their order routing practices, the degree to which fee changes in this 
market may impose any burden on competition is extremely limited. 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) \7\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \8\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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) \9\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \9\ 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-NYSEArca-2016-144 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-2016-144. 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

[[Page 81184]]

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 
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-NYSEArca-2016-144, and should be submitted on or before 
December 8, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-27602 Filed 11-16-16; 8:45 am]
 BILLING CODE 8011-01-P