Document ID: SEC-2023-0391-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2023-04-07T04:00Z

[Federal Register Volume 88, Number 67 (Friday, April 7, 2023)]
[Notices]
[Pages 20922-20924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07265]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97241; File No. SR-NYSEARCA-2023-26]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE 
Arca Options Fee Schedule To Delete Text That Is No Longer in Effect

April 3, 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 March 29, 2023, NYSE Arca, Inc. (``NYSE Arca'' 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 Arca Options Fee Schedule 
(``Fee Schedule'') to delete text relating to pricing that is no longer 
in effect. The Exchange proposes to implement the fee changes effective 
March 29, 2023. The proposed rule change is available on the Exchange's 
website at www.nyse.com, at

[[Page 20923]]

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 delete 
text relating to discontinued or expired pricing. The Exchange proposes 
to implement the rule change on March 20, 2023.
    The Exchange proposes to remove text relating to now-expired 
pricing programs that were implemented in connection with the 
Exchange's migration to the Pillar trading platform (the ``Pillar 
Migration''), which completed in July 2022. First, the Exchange 
proposes to remove outdated NYSE Arca Market Maker OTP fees from the 
Fee Schedule, which fees are no longer effective following the 
restructuring of Market Maker OTP fees in connection with the Pillar 
Migration.\4\ The Exchange also proposes to eliminate text providing 
for a temporary cap on fees for Order/Quote Entry Ports, Quote Takedown 
Ports, and Drop Copy Ports (collectively, ``Port Fees''); the cap on 
Port Fees was only effective during the period of the Pillar Migration 
and no longer applies to any OTP Holders.\5\ The Exchange further 
proposes to modify the table setting forth Port Fees to eliminate fees 
for Quote Takedown Ports altogether, as such ports no longer exist 
following the Pillar Migration.\6\ Finally, the Exchange proposes to 
delete the last sentence of Endnote 8, which currently sets forth 
pricing intended to provide OTP Holders with certainty regarding their 
eligibility for certain tiers, incentives, and discounts during the 
Pillar Migration and which was effective only for the month during 
which the Pillar Migration occurred.\7\
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    \4\ See Securities Exchange Act Release No. 95142 (June 23, 
2022), 87 FR 38786 (June 29, 2022) (SR-NYSEArca-2022-36) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
the NYSE Arca Options Fee Schedule) (providing for new Market Maker 
OTP fees, which became effective August 1, 2022).
    \5\ See Securities Exchange Act Release No. 94017 (January 20, 
2022), 87 FR 4095 (January 26, 2022) (SR-NYSEArca-2022-03) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the NYSE Arca Options Fee Schedule To Cap Certain Port Fees) 
(providing that Port Fees would be capped for the month of July 
2022).
    \6\ The Fee Schedule currently provides that, for each order/
quote entry port utilized, NYSE Arca Market Makers may utilize, free 
of charge, one port dedicated to quote cancellation or ``quote 
takedown.'' Any such port(s) are not included in the count of order/
quote entry ports utilized, but any quote takedown port in excess of 
the number of order/quote entry ports utilized will be counted and 
charged as an order/quote entry port. See Fee Schedule, PORT FEES. 
The Exchange proposes to delete this text, as well as the reference 
to quote takedown ports in connection with how the Exchange would 
aggregate ports of affiliates for purposes of calculating the number 
of ports utilized. The Exchange notes that it began offering 
dedicated quote takedown ports to minimize latency for quote 
takedown. See Securities Exchange Act Release No. 74841 (April 29, 
2015), 80 FR 25758 (May 5, 2015) (SR-NYSEARCA-2015-32) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Modifying 
its Rules to Provide for the Use of Ports that Provide Connectivity 
to the Exchange's Trading Systems Solely for the Cancellation or 
``Takedown'' of Quotes and Changes to the NYSE Arca Options Fee 
Schedule Related to Quote Takedown Service). Order/quote entry ports 
on Pillar process more efficiently than their pre-Pillar 
counterparts because the Pillar trading platform is designed to 
optimize throughput and provide minimal latency; accordingly, Market 
Makers can use their Pillar order/quote entry ports to readily 
accomplish both order/quote entry and quote takedown, thereby 
eliminating the need to obtain additional ports to effect the prompt 
cancellation of quotes.
    \7\ See Securities Exchange Act Release No. 94125 (February 1, 
2022), 87 FR 6910 (February 7, 2022) (SR-NYSEArca-2022-05) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the NYSE Arca Options Fee Schedule) (providing for continuity 
of eligibility for certain tiers, incentives, and discounts for the 
month of July 2022).
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    The Exchange next proposes to amend the Fee Schedule to remove text 
relating to certain other pricing that is no longer in effect. First, 
the Exchange proposes to eliminate text that provided for a waiver of 
the Options Regulatory Fee from November 1, 2022 to January 31, 2023, 
as the waiver period has now ended.\8\ The Exchange also proposes to 
eliminate the section of the Fee Schedule setting forth NYSE FANG+ 
Index (``FAANG'') transaction fees and FAANG credits for Market 
Makers,\9\ as FAANG options were delisted in February 2023, and these 
fees and credits are no longer applicable to any OTP Holders.\10\ 
Lastly, the Exchange proposes to delete the text of current Endnote 14 
relating to Binary Return Derivatives (``ByRDs'') transactions, as the 
last ByRDs expired in April 2018, and to designate Endnote 14 as 
Reserved.
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    \8\ See Securities Exchange Act Release No. 96374 (November 22, 
2022), 87 FR 73372 (November 29, 2022) (SR-NYSEARCA-2022-78) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the NYSE Arca Options Fee Schedule Concerning the Options 
Regulatory Fee).
    \9\ The Fee Schedule currently provides that Non-Customers and 
Professional Customers incur a $0.35 per contract fee for FAANG 
transactions and that Customers and Market Makers do not incur a fee 
for FAANG transactions. The Fee Schedule also provides for certain 
credits to NYSE Arca Options Market Makers and LMMs that execute a 
minimum number of total monthly contract sides that open a position 
in FAANG on the Exchange. See Fee Schedule, NYSE FANG+ Index (FAANG) 
Transaction Fees.
    \10\ The Exchange also proposes to delete references to FAANG in 
Endnote 2 (which currently provides that the Lead Market Maker 
Rights Fee does not apply to FAANG options) and Endnote 8 (which 
currently provides that options on FAANG would be included in 
calculations to qualify for volume-based incentives), which no 
longer have application following the delisting of FAANG options.
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    The Exchange believes the proposed change would improve the clarity 
of Fee Schedule by removing obsolete text, thereby obviating potential 
confusion regarding pricing currently in effect.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\11\ in general, and furthers the 
objectives of sections 6(b)(4) and (5) of the Act,\12\ 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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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4) and (5).
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The Proposed Rule Change Is Reasonable
    The Exchange believes the proposed elimination of text in the Fee 
Schedule describing pricing that is no longer applicable to any OTP 
Holders is reasonable because it would improve the clarity of the Fee 
Schedule and reduce confusion as to which fees and credits are 
applicable on the Exchange. The Exchange believes that amending the Fee 
Schedule to remove obsolete pricing would further the protection of 
investors and the public interest by promoting clarity and transparency 
in the Fee Schedule and making the Fee Schedule easier to navigate and 
understand.
The Proposal Is an Equitable Allocation of Fees and Credits
    The Exchange believes the proposed change supports an equitable 
allocation of fees and credits among its market

[[Page 20924]]

participants because it would eliminate obsolete text from the Fee 
Schedule describing pricing programs that are no longer applicable to 
any market participants. Accordingly, the Exchange believes the 
proposal would impact all similarly situated OTP Holders on an equal 
basis. The Exchange also believes that the proposed change would 
promote investor protection and the public interest because the 
deletion of expired or discontinued pricing programs from the Fee 
Schedule would enhance the clarity of the Fee Schedule and reduce 
confusion regarding fees and credits currently applicable to market 
participants who transact on the Exchange.
The Proposal is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory because it neither targets nor will it have a disparate 
impact on any category of market participant. The proposed elimination 
of obsolete pricing would affect all market participants on an equal 
and non-discriminatory basis, as the programs with which such pricing 
is associated are no longer available to any market participants. The 
Exchange also believes that the proposed change would protect investors 
and the public interest because the deletion of expired or discontinued 
pricing programs would facilitate market participants' understanding of 
the pricing currently applicable on the Exchange.

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 proposed change 
relates solely to the elimination of obsolete pricing associated with 
discontinued or expired pricing and, accordingly, would not have any 
impact on intramarket or intermarket competition. The proposed change 
is designed to ensure that the Fee Schedule accurately reflects pricing 
currently effective on the Exchange, thereby adding clarity to the Fee 
Schedule to the benefit of all market participants.

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 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 [email protected]. Please include 
File Number SR-NYSEARCA-2023-26 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-2023-26. 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 (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 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. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions.
    You should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-NYSEARCA-2023-
26, and should be submitted on or before April 28, 2023.

    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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-07265 Filed 4-6-23; 8:45 am]
BILLING CODE 8011-01-P