Document ID: SEC-2023-0470-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American, LLC
Posted Date: 2023-05-01T04:00Z

[Federal Register Volume 88, Number 83 (Monday, May 1, 2023)]
[Notices]
[Pages 26629-26634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09086]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97372; File No. SR-NYSEAMER-2023-28]

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

April 25, 2023.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on April 18, 2023, NYSE American LLC (``NYSE American'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
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'') regarding routing fees and Floor Broker 
rebates and to delete text relating to discontinued programs. The 
Exchange proposes to implement the fee change effective April 18, 
2023.\4\ The proposed rule change is available on the Exchange's 
website 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 
March 1, 2023 (SR-NYSEAMER-2023-18), withdrew such filing and 
amended the Fee Schedule on March 15, 2023 (SR-NYSEAMER-2023-21), 
withdrew such filing and amended the Fee Schedule on March 28, 2023 
(SR-NYSEAMER-2023-24), and then withdrew such filing and amended the 
Fee Schedule on April 10, 2023 (SR-NYSEAMER-2023-26), which latter 
filing the Exchange withdrew on April 18, 2023.
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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 amend the Fee Schedule to (1) 
delete text relating to fees and credits for NYSE FANG+ Index 
(``FAANG'') transactions, (2) simplify the Routing Surcharge applied to 
orders routed to other markets, (3) eliminate the introductory pricing 
currently offered for Market Maker ATP fees and Premium Product fees, 
and (4) add a Floor Broker rebate program. The Exchange believes that 
the proposed changes would promote clarity and transparency in the Fee 
Schedule by eliminating fees and credits relating to programs that the 
Exchange proposes to discontinue and simplifying the fees charged for 
routed orders. The Exchange proposes to implement the rule change on 
April 18, 2023.
FAANG Transactions
    Footnote 7 to Section I.A. of the Fee Schedule (Rates for Options 
transactions) currently provides for fees and credits relating to FAANG 
transactions. The Fee Schedule provides for a $0.35 per contract, per 
side fee for Non-Customer FAANG transactions, whether executed manually 
or electronically. FAANG transactions (i) on behalf of Customers or 
(ii) by NYSE American Options Market Makers, Specialists, e-Specialists 
or DOMMs do not incur a fee. Marketing Charges are not applied to FAANG 
transactions. Volume in FAANG transactions is included in the 
calculations to qualify

[[Page 26630]]

for any volume-based incentives currently offered on the Exchange.
    The Fee Schedule also provides for a credit to any firm that is an 
NYSE American Options Market Maker, Specialist, e-Specialist or DOMM 
that executes a specified minimum number of total monthly contract 
sides that open a position in FAANG on the Exchange (``eligible 
contract sides''), as set forth below (``MM FAANG Credit''):
     A credit of $5,000 for a minimum of 500 eligible contract 
sides; provided, however, that if more than five firms qualify for this 
MM FAANG Credit in a calendar month, the $5,000 MM FAANG Credit for 
each qualifying firm will be a pro rata share of $25,000; or
     A credit of $10,000 for a minimum of 2,000 eligible 
contract sides; provided, however, that if more than two firms qualify 
for this MM FAANG Credit in a calendar month, the $10,000 MM FAANG 
Credit for each qualifying firm will be a pro rata share of $25,000. A 
firm that qualifies for the $10,000 credit will not be eligible for the 
$5,000 credit.
    Because FAANG options were delisted after monthly expiration in 
February 2023, the Exchange now proposes to delete the current text of 
Footnote 7 to Section I.A. to remove references to fees and credits 
relating to FAANG transactions, which would no longer be applicable for 
any market participants, and designate Footnote 7 as Reserved. The 
Exchange also proposes a conforming change to Section I.D. (Prepayment 
Program) of the Fee Schedule to delete the reference in that section to 
``Section 1.A., note 7,'' to reflect the proposed deletion of the fees 
and credits relating to FAANG transactions. The Exchange believes this 
proposed change, which would remove text relating to a discontinued 
program, would promote clarity in the Fee Schedule.
Routing Surcharge
    As set forth in Section I.L. of the Fee Schedule, the Exchange 
currently assesses a routing surcharge on all non-Customer orders 
routed to away markets and on Customer orders including Professional 
Customer orders that are charged transaction fees at another exchange. 
If the executing exchange does not charge a transaction fee for the 
execution of the Customer order, the Routing Surcharge will be waived. 
Currently, the Routing Surcharge is $0.11 per contract plus (i) any 
transaction fees assessed by the away exchange(s) (calculated on an 
order-by-order basis since different away exchanges charge different 
amounts) or (ii) if the actual transaction fees assessed by the away 
exchange(s) cannot be determined prior to the execution, the highest 
per contract charge assessed by the away exchange(s) for the relevant 
option class and type of market participant (e.g., Customer, Firm, 
Broker/Dealer, Professional Customer or Market Maker). The Exchange 
applies the Routing Surcharge in addition to any customary execution 
fees applicable to the order.
    The Exchange now proposes to modify the Routing Surcharge to be 
based on whether the routed order is in a Penny or non-Penny issue and 
to establish a single fee that would be applicable to all routed orders 
in Penny issues, and a single fee for all routed orders in non-Penny 
issues. Specifically, the Exchange proposes that the fee for routed 
orders would be set at a fixed amount intended to counterbalance the 
internal resources required to support the handling of orders routed 
away from the Exchange. The Exchange proposes to implement a flat fee 
structure for routing fees, which the Exchange believes would 
streamline the process of calculating fees applied to orders routed 
away from the Exchange because it would, among other things, reduce the 
administrative burden of recalibrating routing fees each time an away 
exchange modifies its relevant transaction fees. Accordingly, the 
Exchange proposes a Routing Surcharge of $0.61 in Penny issues, and 
$1.21 in non-Penny issues. The Exchange believes that having a single 
published rate for all routed orders in Penny issues and a single 
published rate for all routed orders in non-Penny issues would also 
reduce potential confusion relating to the amount of the surcharge for 
a given routed order (particularly in light of the variability in 
transaction fees across other options markets) and would permit market 
participants to determine execution costs at the time of order entry, 
thereby promoting clarity and transparency in the Fee Schedule. The 
Exchange believes the proposed routing fee structure is not novel, as 
at least one other options exchange similarly applies fixed routing 
fees based on whether the routed order is in a Penny or non-Penny 
issue, and that the proposed amounts of the fees are within the range 
of fees applied by other markets to routed orders.\5\
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    \5\ See, e.g., BOX Options Exchange Fee Schedule, available at: 
https://boxexchange.com/assets/BOX-Fee-Schedule-as-of-March-6-2023.pdf (providing for fixed routing fees of $0.60 per contract fee 
for customer orders in Penny classes and $0.85 per contract fee for 
customer orders in non-Penny class); Cboe Exchange, Inc. Options Fee 
Schedule, available at: https://cdn.cboe.com/resources/membership/Cboe_FeeSchedule.pdf (providing, for example, Customer routing fees 
of $0.75 for orders in Penny issues or $1.25 for orders in non-Penny 
issues routed to certain away markets and Non-Customer routing fees 
of $1.17 for all orders in Penny issues or $1.45 for all orders in 
non-Penny issues routed away).
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Introductory Pricing for Newly Enrolled Market Makers
    Section III.A. of the Fee Schedule provides for monthly ATP fees. 
Footnote 2 of Section III.A. further provides that an ATP Holder that 
newly enrolls to operate as a Market Maker may be entitled to 
introductory pricing on ATP fees for up to six months.\6\ The Exchange 
similarly offers newly enrolled Market Makers introductory pricing on 
Premium Product Fees for up to six months, as set forth in Section 
III.B, Footnote 1.\7\
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    \6\ A newly enrolled Market Maker on the Exchange may be 
entitled to introductory pricing on its ATP Fees for up to six 
months, beginning the first month in which it registers. For the 
first three months (i.e., months 1-3), the Exchange waives the ATP 
fees, and for the latter three months (i.e., months 4-6), the 
Exchange discounts such ATP fees by 50%, unless the Market Maker 
achieves a monthly ADV equal to at least 0.05% of TCADV, at which 
time the Exchange would charge the Market Maker 100% of its ATP Fees 
for the remaining months, regardless of its monthly ADV in 
subsequent months. An ATP Holder may qualify for this introductory 
pricing only once in a 24-month period, which period begins in the 
first month the ATP Holder registers on the Exchange.
    \7\ A newly enrolled Market Maker on the Exchange may be 
entitled to introductory pricing on its Premium Product Fees for up 
to six months, beginning the first month in which it registers. For 
the first three months (i.e., months 1-3), the Exchange waives 
Premium Product Fees, and for the latter three months (i.e., months 
4-6), the Exchange discounts such Premium Product Fees by 50%, 
unless the Market Maker achieves a monthly ADV equal to at least 
0.05% of TCADV, at which time the Exchange would charge the Market 
Maker 100% of its Premium Product Fees for the remaining months, 
regardless of its monthly ADV in subsequent months. An ATP Holder 
may qualify for this introductory pricing only once in a 24-month 
period, which period begins in the first month the ATP Holder 
registers on the Exchange.
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    The Exchange now proposes to delete Section III.A., Footnote 2 and 
Section III.B., Footnote 1 to eliminate the introductory pricing for 
newly enrolled Market Makers on ATP fees and Premium Product Fees, 
respectively, as no ATP Holders have qualified for this pricing in the 
last few years. The Exchange adopted this introductory pricing to 
encourage ATP Holders to enroll as Market Makers. However, because 
these pricing incentives have been underutilized (and therefore did not 
achieve their intended effect), the Exchange proposes to eliminate such 
pricing from the Fee Schedule and believes that ATP Holders would not 
be impacted by its removal.
Floor Broker Grow With Me Program
    The Exchange proposes to add the Floor Broker Grow With Me program,

[[Page 26631]]

through which Floor Broker organizations (``Floor Brokers'') may earn a 
($0.05) rebate on manual billable volume. The Exchange proposes to add 
this program in Section III.E.2. of the Fee Schedule, which is 
currently designated as Reserved. The Exchange proposes that the Floor 
Broker Grow With Me program would provide Floor Brokers with an 
opportunity to earn a rebate on manual billable volume based on 
demonstrated growth as compared to the Floor Brokers' manual billable 
volume ADV in January 2023 (the ``base period''). The Exchange proposes 
that Floor Brokers that achieve (1) manual billable contracts volume of 
100% over their base period volume in a month or (2) an ADV of 25,000 
manual billable contracts in a month, whichever is greater, would be 
eligible for a rebate of ($0.05) per billable side. The Exchange 
proposes that Floor Brokers new to the Exchange would be eligible to 
qualify for the program by achieving the second qualifying criteria, 
which is not tied to base period volume. The Exchange further proposes 
that the Floor Broker Grow With Me program would be in place with these 
qualifying criteria until July 31, 2023, which would allow the Exchange 
a period to evaluate such criteria and to submit a proposed rule change 
regarding qualifications for the program beyond that date.
    Although the Exchange cannot predict with certainty whether the 
proposed change would encourage Floor Brokers to increase their manual 
billable volume on the Exchange, the proposed change is designed to 
continue to incentivize Floor Brokers to do so by offering a rebate on 
manual billable volume. All Floor Brokers, including new Floor Brokers, 
would be eligible to earn a rebate through the Floor Broker Grow With 
Me program, as proposed.
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 Proposed Rule Change Is Reasonable
    The Exchange operates in a highly competitive market. The 
Commission has repeatedly expressed its preference for competition over 
regulatory intervention in determining prices, products, and services 
in the securities markets. In Regulation NMS, the Commission 
highlighted the importance of market forces in determining prices and 
SRO revenues and, also, recognized that current regulation of the 
market system ``has been remarkably successful in promoting market 
competition in its broader forms that are most important to investors 
and listed companies.'' \10\
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    \10\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (S7-10-04) (``Reg NMS 
Adopting Release'').
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    There are currently 16 registered options exchanges competing for 
order flow. Based on publicly-available information, and excluding 
index-based options, no single exchange has more than 16% of the market 
share of executed volume of multiply-listed equity and ETF options 
trades.\11\ Therefore, no exchange possesses significant pricing power 
in the execution of multiply-listed equity and ETF options order flow. 
More specifically, in January 2023, the Exchange had less than 8% 
market share of executed volume of multiply-listed equity and ETF 
options trades.\12\
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    \11\ The OCC publishes options and futures volume in a variety 
of formats, including daily and monthly volume by exchange, 
available here: https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics.
    \12\ Based on a compilation of OCC data for monthly volume of 
equity-based options and monthly volume of ETF-based options, see 
id., the Exchange's market share in equity-based options was 7.03% 
for the month of January 2022 and 7.96% for the month of January 
2023.
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    The Exchange believes that the ever-shifting market share among the 
exchanges from month to month demonstrates that market participants can 
shift order flow, or discontinue or reduce use of certain categories of 
products, in response to fee changes. Accordingly, competitive forces 
constrain options exchange transaction fees. Stated otherwise, changes 
to exchange transaction fees can have a direct effect on the ability of 
an exchange to compete for order flow.
    The Exchange believes the proposed change to the Routing Surcharge 
is reasonable because it would establish a single fee that would be 
applicable to all routed orders in Penny issues and a single fee that 
would be applicable to all routed orders in non-Penny issues, and such 
fees would be applicable to all market participants equally. In 
addition, the Exchange believes the proposed change is reasonable 
because it would provide for routing fees that would counterbalance the 
internal resources required to support the handling of orders routed 
away from the Exchange and would streamline the process of calculating 
routing fees by obviating the need to recalibrate fees based on 
individual away market fees (which are variable and subject to frequent 
change) and eliminating any potential confusion as to routing fees 
applicable to a given order. The Exchange also notes that a fixed fee 
structure for routing fees is not novel and that the amounts of the 
proposed Routing Surcharge amounts are within the range of routing fees 
currently charged by other options exchanges.\13\
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    \13\ See note 5, supra.
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    The Exchange believes that the proposed change to delete FAANG 
transaction fees and credits is reasonable because FAANG options were 
delisted after monthly expiration in February 2023, and such fees and 
credits are no longer applicable to any market participants. The 
Exchange believes that the proposed change to eliminate certain 
introductory pricing for newly enrolled Market Makers is reasonable 
because these programs have not served to encourage ATP Holders to 
enroll as Market Makers on the Exchange. Accordingly, the Exchange 
believes that the proposed changes to eliminate text from the Fee 
Schedule relating to discontinued or underutilized programs would 
promote clarity in the Fee Schedule, to the benefit of all market 
participants.
    The Exchange believes that the proposed Floor Broker Grow With Me 
Program is reasonable because it is designed to continue to incent 
Floor Brokers to increase their manual billable volume executed on the 
Exchange and provides Floor Brokers with two ways to earn the 
additional rebate offered by the program. The Exchange also believes 
that using a Floor Broker organization's January 2023 manual billable 
volume ADV as a basis for measuring growth is reasonable because it 
reflects each organization's recent volumes and that the 25,000 manual 
billable contracts alternative requirement is reasonable because it 
would permit new Floor Brokers without base period volume to qualify 
for the program by meeting a requirement that also applies to current 
Floor Brokers. The Exchange also believes that it is reasonable to 
implement the program with the proposed qualifying criteria through 
July 31, 2023, as the Exchange would be able to further evaluate such 
criteria in the interim period and prepare a proposed rule change 
regarding appropriate qualifying criteria for the program beyond such 
date.

[[Page 26632]]

    To the extent that the proposed changes improve the clarity and 
transparency of the Fee Schedule, the Exchange believes they would 
continue to make the Exchange a more competitive venue for order 
execution, which, in turn, promotes just and equitable principles of 
trade and removes impediments to and perfects the mechanism of a free 
and open market and a national market system. The Exchange notes that 
all market participants stand to benefit from any increase in volume, 
which could promote market depth, facilitate tighter spreads and 
enhance price discovery, particularly to the extent the proposed change 
encourages market participants to utilize the Exchange as a primary 
trading venue, and may lead to a corresponding increase in order flow 
from other market participants.
    Finally, to the extent the proposed change continues to attract 
greater volume and liquidity, the Exchange believes the proposed change 
would improve the Exchange's overall competitiveness and strengthen its 
market quality for all market participants. In the backdrop of the 
competitive environment in which the Exchange operates, the proposed 
rule change is a reasonable attempt by the Exchange to increase the 
depth of its market and improve its market share relative to its 
competitors. The Exchange's fees are constrained by intermarket 
competition, as market participants can choose to direct their order 
flow to any of the 16 options exchanges The Exchange believes that 
proposed rule change is designed to continue to incent market 
participants to direct liquidity to the Exchange, and, to the extent 
they continue to be incentivized to aggregate their trading activity at 
the Exchange, that increased liquidity could promote market depth, 
price discovery and improvement, and enhanced order execution 
opportunities for all market participants.
The Proposed Rule Change Is an Equitable Allocation of Fees and Credits
    The Exchange believes the proposed rule change is an equitable 
allocation of its fees and credits. The proposed change to the Routing 
Surcharge is equitable because the proposed single fee for all routed 
orders in Penny issues and single fee for all routed orders in non-
Penny issues would apply to all market participants equally and the 
proposed amounts are designed to offset internal resources necessary to 
support the handling of orders routed away from the Exchange. The 
proposed change would also streamline the process of calculating 
routing fees for all market participants and provide increased clarity 
regarding execution costs at the time of order entry. The proposed 
change to delete fees and credits relating to FAANG transactions is 
also equitable because their elimination would likewise apply to all 
market participants equally. The Exchange also believes that the 
proposed changes to eliminate introductory pricing for newly enrolled 
Market Makers in ATP fees and Premium Product Fees are equitable 
because the pricing programs would no longer be available to any ATP 
Holders, and, moreover, no ATP Holders have qualified for the 
introductory pricing in recent years. The Exchange believes that the 
proposed rebate for Floor Brokers through the Floor Broker Grow With Me 
Program is an equitable allocation of fees and credits because the 
rebate would be available to all qualifying Floor Brokers equally, and 
Floor Brokers may qualify for the rebate based on either growth over 
their own base period volume or an alternative that would permit new 
Floor Brokers that do not have base period volume to qualify for the 
program on a basis that is also applicable to current Floor Brokers. 
The Exchange also believes that the proposal to offer the Floor Broker 
Grow With Me program with the current qualifying criteria through July 
31, 2023 is equitable because the intervening period would provide the 
Exchange an opportunity to evaluate the parameters of the program and 
to submit a proposed rule change regarding the criteria for the program 
going forward. The Exchange further believes that the proposed change 
is equitable because it is intended to encourage the role performed by 
Floor Brokers in facilitating the execution of orders via open outcry, 
a function which the Exchange wishes to support for the benefit of all 
market participants.
    To the extent that the proposed changes continue to incent ATP 
Holders to utilize the Exchange as a primary execution venue and 
attract more volume on the Exchange, this increased order flow would 
continue to make the Exchange a more competitive venue for, among other 
things, order execution. Thus, the Exchange believes the proposed rule 
change would improve market quality for all market participants on the 
Exchange and, as a consequence, attract more order flow to the 
Exchange, thereby improving market-wide quality and price discovery.
The Proposed Rule Change Is Not Unfairly Discriminatory
    The Exchange believes the proposed change is not unfairly 
discriminatory. The proposed change to the Routing Surcharge is not 
unfairly discriminatory because the proposed fees are intended to 
assess streamlined routing fees in amounts that would appropriately 
account for the internal resources necessary to support orders routed 
away from the Exchange and would apply equally to all market 
participants' routed orders, based on whether such order is in a Penny 
or non-Penny issue. The proposed change would simplify the calculation 
of routing fees for all market participants and add clarity and 
transparency to the Fee Schedule regarding the fees applicable to 
routed orders. The proposed change to delete fees and credits relating 
to FAANG transactions is not unfairly discriminatory because they are 
no longer applicable to any market participants following the delisting 
of FAANG options. The Exchange also believes that the proposed changes 
to eliminate introductory pricing for new Market Makers in ATP fees and 
Premium Product Fees are equitable because the pricing programs would 
be eliminated in their entirety and would no longer be available to any 
ATP Holders. Finally, the Exchange believes that the proposed Floor 
Broker Grow With Me Program is not unfairly discriminatory because 
current and new Floor Brokers alike are eligible to qualify for the 
rebate and is not unfairly discriminatory to non-Floor Brokers because 
Floor Brokers serve an important function in facilitating the execution 
of orders on the Exchange, which the Exchange wishes to encourage and 
support to promote price improvement opportunities for all market 
participants.
    Thus, the Exchange believes that, to the extent the proposed rule 
change would continue to improve market quality for all market 
participants on the Exchange by promoting clarity and transparency in 
the Fee Schedule and attract more order flow to the Exchange, thereby 
improving market-wide quality and price discovery, the resulting 
increased volume and liquidity would provide more trading opportunities 
and tighter spreads to all market participants and thus would promote 
just and equitable principles of trade, remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system and, in general, protect investors and the public interest.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.

[[Page 26633]]

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

    In accordance with Section 6(b)(8) of the Act, 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. Instead, as discussed above, the Exchange believes 
that the proposed changes would encourage the submission of additional 
liquidity to a public exchange, thereby promoting market depth, price 
discovery and transparency and enhancing order execution opportunities 
for all market participants. As a result, the Exchange believes that 
the proposed change furthers the Commission's goal in adopting 
Regulation NMS of fostering integrated competition among orders, which 
promotes ``more efficient pricing of individual stocks for all types of 
orders, large and small.'' \14\
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    \14\ See Reg NMS Adopting Release, supra note 9, at 37499.
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    Intramarket Competition. The proposed change is designed to improve 
the clarity and transparency of the Fee Schedule and to continue to 
attract order flow to the Exchange. The proposed change to offer Floor 
Brokers a rebate on manual billable volume through the Floor Broker 
Grow With Me program is intended to attract additional order flow to 
the Exchange, which could increase the volumes of contracts traded on 
the Exchange. Greater liquidity benefits all market participants on the 
Exchange, and increased manual billable transactions could increase 
opportunities for execution of other trading interest. The Exchange 
believes that the proposed change to the Routing Surcharge would not 
impose any burden on competition that is not necessary or appropriate 
because it is intended to simplify the calculation of fees for routed 
orders and to continue to incent Firms to direct order flow to the 
Exchange, thereby promoting liquidity on the Exchange to the benefit of 
all market participants. The Exchange does not believe that the 
proposed changes relating to FAANG transactions or introductory pricing 
for newly enrolled Market Makers would impose any burden on competition 
that is not necessary or appropriate because the changes would apply 
equally to all ATP Holders and would add clarity to the Fee Schedule, 
to the benefit of all market participants.
    Intermarket Competition. The Exchange operates in a highly 
competitive market in which market participants can readily favor one 
of the 16 competing option exchanges if they deem fee levels at a 
particular venue to be excessive. In such an environment, the Exchange 
must continually adjust its fees to remain competitive with other 
exchanges and to attract order flow to the Exchange. Based on publicly-
available information, and excluding index-based options, no single 
exchange has more than 16% of the market share of executed volume of 
multiply-listed equity and ETF options trades.\15\ Therefore, no 
exchange possesses significant pricing power in the execution of 
multiply-listed equity and ETF options order flow. More specifically, 
in January 2023, the Exchange had less than 8% market share of executed 
volume of multiply-listed equity and ETF options trades.\16\
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    \15\ See note 11, supra.
    \16\ See note 12, supra.
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    The Exchange believes that the proposed rule change reflects this 
competitive environment because it modifies the Exchange's fees and 
credits in a manner designed to continue to incent Floor Brokers to 
direct trading interest (particularly manual billable volume) to the 
Exchange, to provide liquidity, and to attract order flow. In addition, 
to the extent that the proposed change to simplify the Routing 
Surcharge incentivizes ATP Holders to utilize the Exchange as a primary 
trading venue for all transactions, all of the Exchange's market 
participants should benefit from the improved market quality and 
increased opportunities for price improvement. The Exchange also 
believes that the proposed rule change reflects this competitive 
environment because it removes underutilized programs from the Fee 
Schedule that did not achieve their intended purpose. The Exchange 
notes that it operates in a highly competitive market in which market 
participants can readily favor competing venues, including one that 
offers similarly structured routing fees.\17\ In such an environment, 
the Exchange must continually review, and consider adjusting, its fees 
and credits to remain competitive with other exchanges.
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    \17\ See note 5, supra.
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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) \18\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \19\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 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) \20\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \20\ 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEAMER-2023-28 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-2023-28. 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 website (https://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

[[Page 26634]]

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 website 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. Do 
not include personal identifiable information in submissions; you 
should submit only information that you wish to make available 
publicly. We may redact in part or withhold entirely from publication 
submitted material that is obscene or subject to copyright protection. 
All submissions should refer to File Number SR-NYSEAMER-2023-28, and 
should be submitted on or before May 22, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-09086 Filed 4-28-23; 8:45 am]
BILLING CODE 8011-01-P