Document ID: SEC-2016-2304-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT, LLC
Posted Date: 2016-12-28T05:00Z

[Federal Register Volume 81, Number 249 (Wednesday, December 28, 2016)]
[Notices]
[Pages 95691-95693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31310]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79651; File No. SR-NYSEMKT-2016-121]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Change Modifying the NYSE Amex 
Options Fee Schedule

December 21, 2016.
    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 December 15, 2016, NYSE MKT LLC (``Exchange'') filed with the 
Securities and Exchange Commission (``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 modify the NYSE Amex Options Fee Schedule 
(``Fee Schedule''). The Exchange proposes to implement the fee change 
effective December 15, 2016. The proposed 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 Section III.C. of the Fee 
Schedule to exempt Binary Return Derivatives contracts (``ByRDs'') from 
the monthly Rights Fees assessed on Specialists, e-Specialists, 
Directed Order Market Markers (each a ``DOMM''). The Exchange proposes 
to implement these changes effective December 15, 2016.
    The Exchange added rules related to ByRDs in 2007 and re-launched 
trading in ByRDs in March 2016.\4\ To encourage

[[Page 95692]]

trading in ByRDs, the Exchange currently exempts transactions in ByRDs 
from all transactions fees and credits.\5\ However, ByRDs are subject 
to monthly Rights Fees.\6\ The Exchange proposes to exempt ByRDs from 
all Rights Fees, which should encourage trading in ByRDs.\7\
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    \4\ The Exchange adopted ByRDs in 2007 and plans to re-launch 
trading in ByRDs in March. See Securities Exchange Act Release No. 
56251 (August 14, 2007), 72 FR 46523 (August 20, 2007) (SR-Amex-
2004-27) (Order approving listing of Fixed Return Options 
(``FROs'')); see also Securities Exchange Act Release Nos. 71957 
(April 16, 2014), 79 FR 22563 (April 22, 2014) (SR-NYSEMKT-2014-06) 
(Order approving name change from FROs to Binary Return Derivatives 
(ByRDs) and re-launch of these products, with certain modification, 
and amending Obvious Errors rules to include ByRDs); 77014 (February 
2, 2016), 81 FR 6566 (February 8, 2016) (SR-NYSEMKT-2016-16) 
(immediate effectiveness filing amending amend certain of rules 
related to ByRDs). ByRDs are European-style option contracts on 
individual stocks, exchange-traded funds (``ETFs'') and Section 107 
Securities that have a fixed return in cash based on a set strike 
price; satisfy specified listing criteria; and may only be exercised 
at expiration pursuant to the Rules of the Options Clearing 
Corporation (the ``OCC'').
    \5\ See Fee Schedule, Section I.A., n. 5 (exempting ByRDs from 
all fees and credits for standard options transactions), available 
here, https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
    \6\ The Exchange charges a monthly Rights Fee on each issue in 
the allocation of an e-Specialist, DOMM, and Specialist, which 
ranges from $50 to $2,500 (absent any applicable discount) and is 
based on the Average National Daily Customer Contracts per issue. 
See id., Fee Schedule, Section III.C. (e-Specialist, DOMM and 
Specialist Monthly Rights Fees).
    \7\ See proposed Fee Schedule, Section III.C. at n. 1 (stating 
that ByRDs are exempt from the Rights Fees). The Exchange proposes 
to delete as obsolete language from current note 1 to Section 
III.C., which provides that options listed before June 1, 2012 would 
be ``grandfathered'' for purposes of certain Rights Fee. See id. The 
Exchange believes this proposed change adds clarity and transparency 
to the Fee Schedule, as any options series listed before 2012 would 
have expired by now.
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    The Exchange believes the proposed treatment of ByRDs for purposes 
of the Fee Schedule would further the Exchange's goal of introducing 
new products to the marketplace by encouraging trading in these 
products.
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 the proposed change is reasonable, equitable 
and not unfairly discriminatory because the Exchange's treatment of 
ByRDs would apply equally to all market participants that opted to 
trade ByRDs. Further, the proposed change is reasonable and does not 
unfairly discriminate because exempting ByRDs from monthly Rights Fees 
would further the Exchange's goal of introducing new products to the 
marketplace by encouraging trading in these products. To the extent 
that the proposed change incentivizes any market participants to direct 
their order flow to the Exchange, all market participants would benefit 
from increased liquidity and trading opportunities on the Exchange.
    The Exchange believes the proposed change to remove obsolete 
language from the Fee Schedule adds clarity and transparency to the Fee 
Schedule, which makes it easier for market participants to comprehend.
    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 would impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act. The Exchange believes that the proposed change 
is pro-competitive as it would further the Exchange's goal of 
introducing new products to the marketplace and encouraging trading in 
these products, which would in turn, benefit market participants. To 
the extent that this purpose is achieved, all of the Exchange's market 
participants should benefit from the improved market liquidity. 
Enhanced market quality and increased transaction volume that results 
from the anticipated increase in order flow directed to the Exchange 
will benefit all market participants and improve competition on the 
Exchange.
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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.
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-NYSEMKT-2016-121 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-2016-121. 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

[[Page 95693]]

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-NYSEMKT-2016-121 and should 
be submitted on or before January 18, 2017.

    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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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-31310 Filed 12-27-16; 8:45 am]
 BILLING CODE 8011-01-P