Document ID: SEC-2015-1738-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT, LLC
Posted Date: 2015-10-27T04:00Z

[Federal Register Volume 80, Number 207 (Tuesday, October 27, 2015)]
[Notices]
[Pages 65833-65835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27218]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76208; File No. SR-NYSEMKT-2015-78]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Modifying the NYSE Amex 
Options Fee Schedule Related to the Amex Customer Engagement Program

October 21, 2015.
    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 October 15, 2015, NYSE MKT LLC (the ``Exchange'' or 
``NYSE MKT'') 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 modify the NYSE Amex Options Fee Schedule 
(``Fee Schedule'') related to the Amex Customer Engagement (``ACE'') 
Program. The Exchange proposes to implement the fee change effective 
October 15, 2015. 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 purpose of this filing is to increase the credits available to 
participants that achieve Tier 2 of the ACE Program as described below.
    Section I.E. of the Fee Schedule describes the ACE Program,\4\ 
which features five tiers expressed as a percentage of total industry 
Customer equity and ETF option average daily volume (``ADV'').\5\ Order 
Flow Providers (``OFPs'') receive per contract credits solely for 
Electronic Customer volume that the OFP, as agent, submits to the 
Exchange.\6\ The ACE Program offers the following two methods for OFPs 
to receive credits:
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    \4\ See NYSE Amex Options Fee Schedule, available here, https://www.theice.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
    \5\ In calculating ADV, the Exchange utilizes monthly reports 
published by the OCC for equity options and ETF options that show 
cleared volume by account type. See OCC Monthly Statistics Reports, 
available here, http://www.theocc.com/webapps/monthly-volume-reports 
(including for equity options and ETF options volume, subtotaled by 
exchange, along with OCC total industry volume). The Exchange 
calculates the total OCC volume for equity and ETF options that 
clear in the Customer account type and divide this total by the 
number of trading days for that month (i.e., any day the Exchange is 
open for business). For example, in a month having 21 trading days 
where there were 252,000,000 equity option and ETF option contracts 
that cleared in the Customer account type, the calculated ADV would 
be 12,000,000 (252,000,000/21 = 12,000,000).
    \6\ Electronic Customer volume is volume executed electronically 
through the Exchange System, on behalf of an individual or 
organization that is not a Broker-Dealer and who does not meet the 
definition of a Professional Customer.
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    1. By calculating, on a monthly basis, the average daily Customer 
contract volume an OFP executes Electronically on the Exchange as a 
percentage of total average daily industry Customer equity and ETF 
options volume; \7\ or
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    \7\ See supra n. 5
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    2. By calculating, on a monthly basis, the average daily contract 
volume an OFP executes Electronically in all participant types (i.e., 
Customer, Firm, Broker-Dealer, NYSE Amex Options Market Maker, Non-NYSE 
Amex Options Market Maker, and Professional Customer) on the Exchange, 
as a percentage of total average daily industry Customer equity and ETF 
option volume,\8\ with the further requirement that a specified 
percentage of the minimum volume required to qualify for the Tier must 
be Customer volume.
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    \8\ Id.
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    Upon reaching a higher tier, an OFP would receive for all eligible 
Customer

[[Page 65834]]

volume the per contract credit associated with the highest tier 
achieved, retroactive to the first contract traded each month, 
regardless of which of the two calculation methods the OFP qualifies 
under.\9\
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    \9\ In the event that an OFP is eligible for credits under both 
calculation methods, the OFP would benefit from whichever criterion 
results in the highest per contract credit for all the OFP's 
eligible ADV. In calculating an OFP's Electronic volume, certain 
volumes are excluded (e.g., QCC trades). See Fee Schedule (Section 
I.E.), supra n. 4.
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    The Exchange proposes to modify the ACE Program by increasing the 
credits available for Tier 2 as illustrated in the table below, with 
proposed additions appearing italicized and proposed deletions 
appearing in brackets:
* * * * *

----------------------------------------------------------------------------------------------------------------
                         ACE program--standard options                Credits payable on customer volume only
              --------------------------------------------------------------------------------------------------
                                               Total electronic
                                              ADV (of which 20%
                                              or greater of the
               Customer electronic            minimum qualifying                      1 Year          3 Year
     Tier         ADV as a % of                volume for each       Customer        enhanced        enhanced
                industry customer      OR        tier must be         volume         customer        customer
                  equity and ETF             customer) as a % of      credits         volume          volume
                   Options ADV                industry customer                       credits         credits
                                                equity and ETF
                                                 options ADV
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1............  0.00% to 0.60%.....  .......  N/A................           $0.00           $0.00           $0.00
2............  >0.60% to 0.80%....  .......  N/A................         ($0.13)       [($0.13)]       [($0.13)]
                                                                                         ($0.15)         ($0.16)
3............  >0.80% to 1.25%....  .......  1.50% to 2.50% of           ($0.14)         ($0.16)         ($0.18)
                                              which 20% or
                                              greater of 1.50%
                                              must be Customer.
4............  >1.25 to 1.75%.....  .......  >2.50% to 3.50% of          ($0.17)         ($0.19)         ($0.21)
                                              which 20% or
                                              greater of 2.50%
                                              must be Customer.
5............  >1.75%.............  .......  >3.50% of which 20%         ($0.19)         ($0.21)         ($0.23)
                                              or greater of 3.5%
                                              must be Customer.
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    The proposed amendments to the ACE Program are designed to enhance 
the rebates, which the Exchange believes would attract more volume and 
liquidity to the Exchange to the benefit of Exchange participants 
through increased opportunities to trade as well as enhancing price 
discovery.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\11\ 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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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed changes to the ACE Program 
are reasonable, equitable and not unfairly discriminatory because the 
credits offered are based on the amount of business transacted on the 
Exchange. In addition, the Exchange believes that the proposed 
amendments to the ACE Program are reasonable, equitable and not 
unfairly discriminatory because they would enhance the incentives to 
OFPs to transact Customer orders on the Exchange, which would benefit 
all market participants by providing more trading opportunities and 
tighter spreads, even to those market participants that do not 
participate in the ACE Program. Additionally, the Exchange believes the 
proposed changes to the ACE Program are consistent with the Act because 
they may attract greater volume and liquidity to the Exchange, which 
would benefit all market participants by providing tighter quoting and 
better prices, all of which perfects the mechanism for a free and open 
market and national market system.
    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,\12\ 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. The Exchange believes the proposed amendments 
to the ACE Program are pro-competitive as the proposed increased 
rebates may encourage OFPs to direct Customer order flow to the 
Exchange and any resulting increase in volume and liquidity to the 
Exchange would benefit all of Exchange participants through increased 
opportunities to trade as well as enhancing price discovery.
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    \12\ 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) \13\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \14\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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) \15\ of the Act to determine whether the proposed 
rule

[[Page 65835]]

change should be approved or disapproved.
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    \15\ 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-NYSEMKT-2015-78 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-NYSEMKT-2015-78. 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 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-2015-78, and should 
be submitted on or before November 17, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-27218 Filed 10-26-15; 8:45 am]
BILLING CODE 8011-01-P