Document ID: SEC-2013-0853-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2013-05-07T04:00Z

[Federal Register Volume 78, Number 88 (Tuesday, May 7, 2013)]
[Notices]
[Pages 26674-26675]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-10740]

[[Page 26674]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69487; File No. SR- NYSEARCA-2013-46]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Options Fee Schedule To Raise the Take Liquidity Fee for Firm and 
Broker Dealer Electronic Executions in Penny Pilot Issues

May 1, 2013.
    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 30, 2013, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 Schedule'') to raise the Take Liquidity fee for Firm and Broker 
Dealer electronic executions in Penny Pilot Issues. The Exchange 
proposes to make the fee change operative on May 1, 2013. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to raise the Take 
Liquidity fee for Firm and Broker Dealer electronic executions in Penny 
Pilot Issues.\4\ The Exchange proposes to make the fee change operative 
on May 1, 2013.
---------------------------------------------------------------------------

    \4\ As provided under NYSE Arca Options Rule 6.72, options on 
certain issues have been approved to trade with a minimum price 
variation of $0.01 as part of a pilot program that is currently 
scheduled to expire on June 30, 2013. See Securities Exchange Act 
Release No. 69106, (March 11, 2013) 78 FR 16552 (March 15, 2013) 
(SR-NYSEArca-2013-22).
---------------------------------------------------------------------------

    Currently, the Exchange charges a Take Liquidity fee of $0.47 per 
contract for Firm and Broker Dealer, Lead Market Maker (``LMM''), and 
Market Maker electronic executions in Penny Pilot Issues. The Exchange 
proposes to raise the Take Liquidity fee to $0.48 per contract for Firm 
and Broker Dealer electronic executions in Penny Pilot Issues. The 
Exchange is increasing the Take Liquidity fee for Firm and Broker 
Dealer electronic executions in Penny Pilot Issues to keep the fee in 
the same range as other exchanges \5\ and generate revenue that will 
help support credits offered to market participants that post 
liquidity. The Exchange does not propose to make any other changes to 
the fees for electronic executions in Penny Pilot Issues. Take 
Liquidity fees will remain at $0.47 for LMMs and Market Makers and 
$0.45 for Customers.
---------------------------------------------------------------------------

    \5\ For example, NASDAQ Options Market (``NOM'') charges Firms, 
Professionals, and Non-NOM Market Makers $0.48 per contract for 
removing liquidity in Penny Pilot Options while Customers are 
charged $0.45 per contract and NOM Market Makers are charged $0.47 
per contract. See NASDAQ Options Rules Chapter XV, Section 2, and 
Securities Exchange Act Release No. 69321, (April 5, 2013) 78 FR 
21691 (April 11, 2013) (SR-NASDAQ-2013-062).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\7\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that raising the Take Liquidity fee from 
$0.47 per contract to $0.48 per contract for Firm and Broker Dealer 
electronic executions in Penny Pilot Issues will result in the 
Exchange's fees for taking liquidity in Penny Pilot issues remaining 
comparable to fees charged by at least one other exchange.\8\ In 
addition, the proposed fee change is reasonable because it will 
generate revenue that will help to support the credits offered to 
market participants that post liquidity, which should benefit all 
market participants by increasing the opportunity for order 
interaction.
---------------------------------------------------------------------------

    \8\ See supra n.5.
---------------------------------------------------------------------------

    The Exchange believes that the proposed fee increase, which would 
apply only to Firms and Broker Dealers, is equitable and not unfairly 
discriminatory. The Exchange notes that Customer order flow benefits 
the market by increasing liquidity, which benefits all market 
participants. LMMs and Market Makers have obligations to quote and 
commit capital, both of which contribute to market quality and price 
discovery on the Exchange. Firms and Broker Dealers do not have such 
obligations. As such, the Exchange believes that it is reasonable, 
equitable, and not unfairly discriminatory to charge Firms and Broker 
Dealers a slightly higher rate for taking liquidity in Penny Pilot 
issues than Customers, LMMs, and Market Makers.

B. Self-Regulatory Organization's Statement on Burden on Competition

    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 proposed fee will allow 
the Exchange to remain competitive with other exchanges by keeping its 
fees in a similar range.\9\ The Exchange believes that the proposed fee 
change reduces the burden on competition because it takes into account 
the value that various market participants add to the marketplace, as 
discussed above. 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 promotes a competitive 
environment.
---------------------------------------------------------------------------

    \9\ See id.

---------------------------------------------------------------------------

[[Page 26675]]

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) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-2013-46 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEARCA-2013-46. 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 publicly available. All 
submissions should refer to File Number SR-NYSEARCA-2013-46 and should 
be submitted on or before May 28, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-10740 Filed 5-6-13; 8:45 am]
BILLING CODE 8011-01-P