Document ID: SEC-2014-0983-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2014-06-12T04:00Z

[Federal Register Volume 79, Number 113 (Thursday, June 12, 2014)]
[Notices]
[Pages 33790-33791]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-13694]

[[Page 33790]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72343; File No. SR-NYSEMKT-2014-50]

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

June 6, 2014.
    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 2, 2014, 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 amend the NYSE Amex Options Fee Schedule 
(``Fee Schedule''). The proposed changes will be operative on June 2, 
2014. 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 Exchange proposes to amend the Fee Schedule as described below. 
The proposed changes will be operative on June 2, 2014.
    The Exchange proposes to modify the existing tier, specifically 
Tier 1B, where Order Flow Providers (``OFPs'') can qualify to earn a 
rebate under the OFP Electronic ADV Tiers. The Exchange is reducing the 
volume requirement under existing Tier 1B from .75% of Total Industry 
Customer equity and ETF option ADV to .45% of Total Industry Customer 
equity and ETF option ADV. No other changes are being proposed by the 
Exchange at this time.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) \4\ of the Act, in general, and 
Section 6(b)(4) and (5) \5\ of the Act, in particular, in that it is 
designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among its members 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 believes that the proposal to modify the existing 
criteria used by OFPs to qualify and earn a rebate under Tier 1B of the 
OFP Customer Electronic ADV is reasonable, equitable and not unfairly 
discriminatory for the following reasons.
    First, the Exchange is making it easier for all OFPs to potentially 
earn a rebate on certain of their electronic volumes under the newly 
proposed criteria under Tier 1B by reducing the percentage of Total 
Industry Customer equity and ETF options ADV from .75% to .45%. By 
making the threshold lower, it should be easier for more OFPs to 
qualify for the rebate and in doing so will lower their overall cost of 
doing business on the Exchange, which may, in turn, lead to cost 
reductions for the clients of OFPs. The Exchange believes that offering 
OFPs a $0.06 per contract rebate under the terms and conditions 
proposed in Tier 1B is also reasonable as the rebate is designed to 
attract additional Customer volumes along with Non-NYSE Amex Options 
Market Maker, Firm, Professional Customer and Broker Dealer volumes to 
the Exchange, which benefits all other participants by increasing the 
opportunities to trade, enhancing transparency and price discovery. 
Requiring a certain level and type of activity before qualifying for a 
rebate on a different type of activity is also not new or novel. 
Specifically, two other exchanges currently require participants to 
commit to a certain level and type of activity before qualifying for a 
rebate on other activity.\6\ The Exchange also believes that excluding 
certain volumes from being eligible for the rebate, specifically QCC 
volumes, electronic Customer Complex volumes, Strategy Executions and 
orders routed away in conjunction with the Options Order Protection and 
Locked/Crossed Market Plan referenced in Rule 991NY, is also reasonable 
as these volumes are already eligible for either reduced rates, rebates 
or capped fees and offering additional discounts on these volumes is 
not desirable as to do so may lead to increased costs for other 
participants. Further, the Exchange notes that excluding such volumes 
is consistent with the existing fee schedule.\7\ As the proposed 
revision to the qualifying threshold under Tier 1B of the OFP 
Electronic ADV Tiers and the associated rebates will be available to 
all participants who route electronic Customer business, the Exchange 
believes the proposal is also equitable and not unfairly 
discriminatory.
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    \6\ See Chicago Board Options Exchange, Inc. (``CBOE'') Fee 
Schedule, available here, http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf and the CBOE Proprietary Products Sliding Scale 
which offers Clearing Trading Permit Holders reduced rates in CBOE 
Proprietary Products (SPX, VIX, etc.) if the Clearing Trading Permit 
Holder achieves certain ADV thresholds in multiply-listed options. 
See also NASDAQ OMX PHLX Fee Schedule, available here, http://www.nasdaqtrader.com/Micro.aspx?id=PHLXPricing and the ``Customer 
Rebate Program'' and Tier 3 where, ``The Exchange will pay a $0.02 
per contract rebate in addition to the applicable Tier 2 and 3 
rebate to a Specialist or Market Maker or its member or member 
organization affiliate under Common Ownership provided the 
Specialist or Market Maker has reached the Monthly Market Maker Cap, 
as defined in Section II.''
    \7\ See Securities and Exchange Commission Release No. 68036 
(October 12, 2012) [sic], 77 FR 63900 (October 17, 2012) (SR-
NYSEMKT-2012-50) (establishing OFP Rebates with exclusions for 
volume attributable to QCC orders, electronic Customer Complex 
volumes, Strategy Executions and orders routed away in conjunction 
with the Options Order Protection and Locked/Crossed Market Plan 
referenced in Rule 991NY).
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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 Exchange believes that 
the proposed

[[Page 33791]]

changes will enhance the competiveness of the Exchange relative to 
other exchanges. The Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive. 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) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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) \10\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \10\ 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-2014-50 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-2014-50. 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-2014-50, and should 
be submitted on or before July 3, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13694 Filed 6-11-14; 8:45 am]
BILLING CODE 8011-01-P