Document ID: SEC-2016-0671-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2016-04-19T04:00Z

[Federal Register Volume 81, Number 75 (Tuesday, April 19, 2016)]
[Notices]
[Pages 23066-23068]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08946]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77610; File No. SR-NYSEArca-2016-55]

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

April 13, 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 April 1, 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 Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Options Fee Schedule 
(``Fee

[[Page 23067]]

Schedule''). The Exchange proposes to implement the fee change 
effective April 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 a criterion used for Lead 
Market Makers and Market Makers (collectively, ``Market Makers'') to 
qualify for the Super Tier level of the Monthly Posting Credit Tiers 
For Executions in Penny Pilot Issues and SPY (the ``Posting Tiers''). 
The Exchange proposes to implement the fee change effective April 1, 
2016.
    Currently, Market Makers qualify for the Posting Tiers by achieving 
certain percentages of Total Industry Customer Equity and exchange 
traded fund (``ETF'') option ADV (``ICADV'').\4\ The Posting Tiers 
include the Select, Super and Super II tiers and the volume 
requirements to achieve each are as follows: \5\
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    \4\ The volume thresholds are based on Market Makers' volume 
transacted electronically as a percentage of total industry Customer 
equity and ETF options volumes as reported by the Options Clearing 
Corporation (the ``OCC''). Total industry Customer equity and ETF 
option volume is comprised of those equity and ETF contracts that 
clear in the Customer account type at OCC and does not include 
contracts that clear in either the Firm or Market Maker account type 
at OCC or contracts overlying a security other than an equity or ETF 
security. See OCC Monthly Statistics Reports, available here, http://www.theocc.com/webapps/monthly-volume-reports.
    \5\ The Exchange notes that there is a posting credit of $0.28 
associated with a Base Tier for which there is no volume 
requirement.
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     Select Tier: A Market Maker achieve at least 0.25% of 
ICADV from Market Maker Posted Orders in both Penny Pilot and non-Penny 
Pilot issues;
     Super Tier: A Market Maker achieve either (i) at least 
0.65% of ICADV from Market Maker Posted Orders in both Penny Pilot and 
non-Penny Pilot issues or (ii) at least 1.60% of ICADV from all orders 
in Penny Pilot Issues, all account types, with at least 0.80% of ICADV 
from Posted Orders in Penny Pilot Issues. As is the case today, in 
calculating the Super Tier, the Exchange will include the ADV of the 
Market Maker's affiliate(s); and
     Super Tier II: A Market Maker must achieve at least 1.60% 
of ICADV from Market Maker Posted Orders, and at least 0.90% of ICADV 
from Posted Orders from both Penny Pilot and non-Penny Pilot issues.\6\
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    \6\ The Commission notes that a Market Maker alternatively can 
qualify for Super Tier II by achieving at least 1.60% of ICADV from 
Customer and Professional Customer orders, with at least 1.20% of 
ICADV from Customer and Professional Customer Posted Orders in all 
Issues.
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    The Exchange is proposing to modify one of the alternative criteria 
to qualify for the Super Tier, by reducing the percentages of ICADV 
from 0.65% of ICADV to 0.55% of ICADV from Market Maker Posted Orders 
in All Issues.\7\ The Exchange believes this modification would 
encourage more Market Makers to achieve Super Tier, which in turn would 
improve the Posted Markets in all issues.
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    \7\ See supra n. 4.
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    The Exchange is not proposing any changes to the amount of the 
Posting Credits for any of the tiers.
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 Exchange believes that the proposed change to the Super Tier is 
reasonable, equitable, and not unfairly discriminatory because it is 
designed to encourage Market Makers to achieve the Super Tier by 
posting volume on the Exchange, which additional liquidity would 
benefit all participants by offering greater price discovery, increased 
transparency, and an increased opportunity to trade on the Exchange. 
The Exchange believes that modifying the Super Tier qualification is 
also not unfairly discriminatory as it applies to all Market Makers and 
may enable more Market Makers to meet the Super Tier on a more 
consistent basis because, as proposed, the threshold has been lowered 
slightly.
    The Exchange also believes that the proposed change to the 
qualification criteria is reasonable equitable, and not unfairly 
discriminatory, as the Posting Credits are intended to encourage 
quoting at the National Best Bid and Offer (``NBBO'') which in turn 
benefits both Customers and non-Customers by having narrower spreads 
available for execution.
    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,\10\ 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 change would encourage competition, including by attracting a 
wider variety of business to the Exchange, which would make the 
Exchange a more competitive venue for, among other things, order 
execution and price discovery. Moreover, because the proposed change to 
the Super Tier continues to be based on the amount of business 
conducted on the Exchange, it would apply equally to similarly-situated 
Marker Makers and would not impose a disparate burden on competition 
either among or between classes of market participants.
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    \10\ 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.

[[Page 23068]]

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) \11\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \12\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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) \13\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \13\ 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-2016-55 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-2016-55. 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-NYSEArca-2016-55, and should 
be submitted on or before May 10, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08946 Filed 4-18-16; 8:45 am]
 BILLING CODE 8011-01-P