Document ID: SEC-2013-1693-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2013-10-01T04:00Z

[Federal Register Volume 78, Number 190 (Tuesday, October 1, 2013)]
[Notices]
[Pages 60358-60360]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23902]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70504; File No. SR-NYSEArca-2013-93]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Options Fee Schedule To Include an Additional Market Maker Monthly 
Posting Credit Tier

September 25, 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 September 17, 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

[[Page 60359]]

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 Arca Options Fee Schedule 
(``Fee Schedule'') to include an additional Market Maker monthly 
posting credit tier. The Exchange proposes to implement the fee change 
effective October 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to include an 
additional Market Maker monthly posting credit tier. The Exchange 
proposes to implement the fee change effective October 1, 2013.
    The Exchange currently offers two Market Maker monthly posting 
credit tiers applicable to posted electronic Market Maker executions in 
Penny Pilot issues and SPY, as follows:

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
            Tier                     Qualification basis           Credit applied to        Credit applied to
                                                                         posted                   posted
                               (average electronic executions   electronic market maker  electronic market maker
                                           per day)
                                                                  executions in penny       executions in SPY
                                                                         pilot
                                                                  issues (except SPY)    .......................
 
----------------------------------------------------------------------------------------------------------------
Base........................  ...............  ...............                  ($0.32)                  ($0.32)
Super Tier..................  80,000           200,000                          ($0.37)                  ($0.39)
                               Contracts from   Contracts
                               Market Maker     Combined from
                               Posted Orders    all orders in
                               in All Issues,   Penny Pilot
                               or.              Issues, all
                                                account types,
                                                with at least
                                                100,000
                                                Contracts from
                                                Posted Orders
                                                in Penny Pilot
                                                Issues\4\.
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    The Exchange proposes to reduce the base credit from $0.32 to $0.28 
for both Penny Pilot issues and SPY and create a new Select Tier that 
would offer a credit of $0.32 for both Penny Pilot issues and SPY if 
the Market Maker has average electronic executions per day of 30,000 
contracts from Market Maker posted orders in all issues. Credits for 
the Super Tier would remain the same. The resulting tiers and pricing 
would be as follows:
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    \4\ This calculation includes transaction volume from the Market 
Maker's affiliates.

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
            Tier                     Qualification basis           Credit applied to        Credit applied to
                                                                         posted                   posted
                               (average electronic executions   electronic market maker  electronic market maker
                                           per day)
                                                                  executions in penny       executions in SPY
                                                                         pilot
                                                                  issues (except SPY)
 
----------------------------------------------------------------------------------------------------------------
Base........................  ...............  ...............                  ($0.28)                  ($0.28)
Select Tier.................  30,000           ...............                  ($0.32)                  ($0.32)
                               Contracts from
                               Market Maker
                               Posted Orders
                               in All Issues.
Super Tier..................  80,000           200,000                          ($0.37)                  ($0.39)
                               Contracts from   Contracts
                               Market Maker     Combined from
                               Posted Orders    all orders in
                               in All Issues,   Penny Pilot
                               or.              Issues, all
                                                account types,
                                                with at least
                                                100,000
                                                Contracts from
                                                Posted Orders
                                                in Penny Pilot
                                                Issues\5\.
----------------------------------------------------------------------------------------------------------------

    The Exchange notes that the proposed change is not otherwise 
intended to address any other issues, and the Exchange is not aware of 
any problems that OTP Holders and OTP Firms, including Market Makers, 
would have in complying with the proposed change.
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    \5\ This calculation includes transaction volume from the Market 
Maker's affiliates.
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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 (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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed change is reasonable 
because

[[Page 60360]]

reducing the base Market Maker monthly posting credit and adding a new 
Select Tier would encourage Market Makers to post greater volumes in 
all issues, including non-Penny Pilot issues, in order to qualify for 
the Select Tier credit of $0.32. The proposed change is also reasonable 
because it is designed to attract higher volumes of Market Maker posted 
orders to the Exchange, which would benefit all market participants by 
offering greater price discovery, increased transparency, and an 
increased opportunity to trade on the Exchange. Encouraging Market 
Makers to send higher volumes of orders to the Exchange would also 
contribute to the Exchange's depth of book as well as to the top of 
book liquidity. The Exchange also believes that the proposed credits 
are reasonable because they are within a range of similar credits 
available on other option exchanges.\8\
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    \8\ NASDAQ Options Market (``NOM'') credits range from -$0.25 to 
-$0.40. Topaz Exchange, LLC (``Topaz'') credits range from -0.30 to 
-$0.39.
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    The Exchange believes that the proposed change is equitable and not 
unfairly discriminatory because it would apply to all Market Makers on 
an equal and non-discriminatory basis. The Exchange further believes 
that the proposed change is equitable and not unfairly discriminatory 
because it is reasonably related to the value to the Exchange's market 
quality associated with higher volumes in Market Maker posted orders, 
including both Penny Pilot issues and non-Penny Pilot issues. The 
proposed lower credit for Market Makers in the base tier is reasonable 
and equitable because it would reasonably ensure that the Exchange will 
derive sufficient revenue to continue to fund the higher credits 
available under the Select Tier and Super Tier for the benefit of all 
market participants.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.
    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,\9\ 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. Instead, the Exchange believes that the proposed 
change would continue to encourage competition, including by attracting 
additional liquidity to the Exchange, which would continue to make the 
Exchange a more competitive venue for, among other things, order 
execution and price discovery. The Exchange does not believe that the 
proposed change will impair the ability of Market Makers or competing 
order execution venues to maintain their competitive standing in the 
financial markets.
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    \9\ 15 U.S.C. 78f(b)(8).
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    Finally, 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) \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.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \12\ 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-NYSEArca-2013-93 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-2013-93. 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-NYSEArca-2013-93, and should 
be submitted on or before October 22, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
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    \13\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2013-23902 Filed 9-30-13; 8:45 am]
BILLING CODE 8011-01-P