Document ID: SEC-2016-1062-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2016-06-21T04:00Z

[Federal Register Volume 81, Number 119 (Tuesday, June 21, 2016)]
[Notices]
[Pages 40379-40381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14557]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78076; File No. SR-NYSEARCA-2016-86]

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

June 15, 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 June 6, 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. 
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 amend the Fee Schedule to 
introduce a new alternative for qualifying for the Customer and 
Professional Customer Incentive Program, as described below. The 
Exchange proposes to implement the fee change effective June 6, 2016.
    The Exchange is proposing to introduce a new tier to the Incentive 
Program, which provides OTP Holders and OTP Firms (collectively, 
``OTPs'') several alternatives to earn additional posting credits 
ranging from $0.01 to $0.05. Specifically, the Exchange proposes to add 
a new alternative that would enable OTPs to earn a $0.03 credit if they 
achieve at least 1.50% of Total Industry Customer equity and ETF option 
ADV (``TCADV'') from Customer and Professional Customer Posted Orders 
in both Penny Pilot and non-Penny Pilot Issues, Plus Executed ADV of 
0.10% of U.S. Equity Market Share Posted and Executed on NYSE Arca 
Equity Market. The Exchange believes this new credit would provide 
additional incentive to direct Customer and Professional Customer order 
flow to the Exchange, which benefits all market

[[Page 40380]]

participants through increased liquidity and enhanced price discovery. 
Moreover, the Exchange believes that the proposed new alternative to 
qualify for the Customer Incentive Program is reasonable because it is 
designed to continue to bring additional posted order flow to NYSE Arca 
Equities, so as to provide additional opportunities for all ETP Holders 
to trade on NYSE Arca Equities.
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 also believes that the proposed new alternative to the 
Incentive Program is reasonable, equitable, and not unfairly 
discriminatory because the incentive would be available to all OTPs 
that execute posted Customer and Professional Customer orders on the 
Exchange on an equal and non-discriminatory basis, in particular 
because it provides alternative means of achieving a posting credit. 
The Exchange believes that providing methods for achieving the credits 
based on posted Customer and Professional Customer Executions in both 
Penny Pilot and non-Penny Pilot issues is equitable and not unfairly 
discriminatory because it would continue to result in more OTPs 
qualifying for the credits and therefore reducing their overall 
transaction costs on the Exchange. Moreover, the Exchange believes the 
proposed modification would provide an additional incentive for OTPs to 
direct Customer and Professional Customer order flow to the Exchange, 
which benefits all market participants through increased liquidity and 
enhanced price discovery.
    Furthermore, the Exchange also believes that the proposed 
modification that relates to executed ADV of 0.10% of U.S. Equity 
Market Share Posted and Executed on NYSE Arca Equity Market is 
equitable and not unfairly discriminatory because it is designed to 
bring additional order flow to NYSE Arca Equities, which increases 
liquidity on NYSE Arca Equities to the benefit of its market 
participants.
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 
change would continue to encourage competition 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 
will impair the ability of any market participants or competing order 
execution venues to maintain their competitive standing in the 
financial markets. Further, the proposed alternative credit under the 
Incentive Program would provide OTP Holders and OTP Firms an additional 
means of achieving a credit and, likewise, may allow those OTP Holders 
and OTP Firms that, to date, have been unable to achieve a credit under 
the Incentive Program to achieve the proposed credit.
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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. 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-2016-86 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-2016-86. 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

[[Page 40381]]

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-2016-86 and should 
be submitted on or before July 12, 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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-14557 Filed 6-20-16; 8:45 am]
 BILLING CODE 8011-01-P