[Federal Register Volume 74, Number 146 (Friday, July 31, 2009)]
[Notices]
[Pages 38245-38247]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18271]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60378; File No. SR-NYSEAmex-2009-38]


Self-Regulatory Organizations; NYSE Amex, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Implementing the 
Schedule of Fees and Charges for Exchange Services

July 23, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 1, 2009, NYSE Amex, LLC (``NYSE Amex'' or the 
``Exchange'') 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 Exchange. The 
Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A) 
of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the 
proposal effective upon filing with the Commission. 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\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes changes to the section of its Schedule of 
Fees and Charges for Exchange Services (the ``Schedule''). Changes to 
the Schedule pursuant to this proposal will be effective and operative 
upon filing. The amended section of the Schedule is included as Exhibit 
5 hereto. A copy of this filing is available on the Exchange's Web site 
at http://www.nyse.com, at the Exchange's principal office 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

[[Page 38246]]

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 purpose of this proposed rule filing is to amend the Schedule 
to reflect new transaction pricing and extend the waiver of the 
Cancellation Fee. The Exchange proposes to reduce the Firm Facilitation 
Fee to $0.00. Currently, the Firm Facilitation Fee is $0.15. The Firm 
Facilitation Fee applies to any transaction involving a firm's 
proprietary trading account, which has a customer of that same firm on 
the contra side of the transaction. The Exchange proposes to reduce the 
Broker Dealer and Firm Manual fee from $0.26 to $0.25. The Exchange 
also proposes to reduce the Broker Dealer and Firm Electronic Fee from 
$0.50 to $0.15. Finally, the Exchange proposes to extend the waiver of 
the Cancellation Fee until August 1, 2009.
    The proposed fees are part of the Exchange's ongoing effort to 
offer attractive transaction rates, and will become operative on July 
1, 2009.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act, in general, and Section 6(b)(4), in particular, in 
that it provides for the equitable allocation of dues, fees and other 
charges among its members and other market participants that use the 
trading facilities of NYSE Amex.
    The Exchange believes the reduced Firm Facilitation Fee is 
equitable because it applies uniformly to all similarly situated users, 
specifically firms facilitating customer order flow. Reduction of the 
fee to zero also follows precedent currently in place on other 
exchanges that have established fee caps.\5\ The Exchange believes this 
proposal is in fact more equitable than fee caps attainable only by 
large broker dealer firms. For example, certain large broker dealers 
are capable of reaching the fee cap at certain options exchanges on the 
first day of trading in a given month, making their transaction fees 
equal to zero for the remainder of the month. This treatment favors 
larger firms capable of reaching the established fee cap. In comparison 
to fee caps, this proposed change creates a level playing field for all 
similarly situated participants, by charging a Firm Facilitation Fee of 
$0.00 to all firms executing facilitation trades regardless of the 
firm's volume.
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    \5\ See Securities Exchange Act Release No. 59393 (February 11, 
2009), 74 FR 7721 (February 19, 2009) (SR-Phlx-2009-12)(increasing 
the Firm-Related Equity Option and Index Option Cap to $75,000 and 
excluding JBO participants).
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    The fee reduction is also consistent with the current fee schedule 
and industry precedent that allows for different rates to be charged 
for different orders types originated by dissimilarly classified market 
participants. The Exchange, along with other options exchanges, 
currently applies different rates to firms facilitating their own 
customer order flow as opposed to solicited orders. The degree of 
difference between the rates charged for different order types is the 
result of competitive forces in the marketplace and reflects certain 
competitive differences amongst market participants. For example, under 
the Exchange's current fee schedule, the customer side of a firm 
facilitation trade is $0.00, while the facilitation side is currently 
$0.15. The current $0.15 Facilitation Fee is $0.11 less than the $0.26 
charged for manual broker dealer executions and $0.02 less than the 
market maker non-directed fee of $0.17. These differences exist, in 
part, because customers have historically been at a competitive 
disadvantage in the options markets as compared to firms actively 
engaged in the market, thus firms are appropriately incentivized to 
facilitate customer order flow. The Exchange believes that reducing the 
Firm Facilitation Fee to zero follows existing precedent for rate 
differentials and further encourages firms to facilitate customer order 
flow, thereby assisting customers in their attempt to transact in the 
options markets.

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.

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) \6\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \7\ thereunder, because it establishes a due, fee, or other charge 
imposed by NYSE Amex only upon its members.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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.

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. In addition, the Commission seeks 
comment generally on whether the proposed elimination of the firm 
facilitation fee is equitable as that term is used in Section 6(b)(4) 
of the Act. Specifically:
    1. Do you agree with the Exchange's claim that the proposed rule 
change ``creates a level playing field for all similarly situated 
participants, by charging a Firm Facilitation Fee of $0.00 to all firms 
executing facilitation trades regardless of the firm's volume''?
    2. The Exchange further argues that ``this proposal is in fact more 
equitable than fee caps only by large broker dealer firms. For example, 
certain large broker dealers are capable of reaching the fee cap at 
certain options exchanges on the first day of trading in a given month, 
making their transaction fees equal to zero for the remainder of the 
month.'' Do you believe that the Exchange's argument is valid, given 
that the fee caps applied by other options exchanges apply to firm 
proprietary orders generally, while the Exchange is proposing to 
eliminate fees only for one particular type of proprietary order (firm 
facilitation orders)?
    3. The Exchange notes that, under its current fee schedule and 
industry practice, different types of market participants are often 
assessed different transaction fees. The Exchange has proposed to widen 
the differential between the fees charged to firms for facilitation 
transactions and the fees charged to other market participants (besides 
customers, who pay zero) to

[[Page 38247]]

participate in the same transactions. Is widening the differential in 
this manner equitable as that term is used in Section 6(b)(4) of the 
Act? At what point would the differential become so large as to be 
inequitable?
    4. Does it impose a burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act and prohibited 
under Section 6(b)(4) of the Act to charge firms facilitating a 
customer order no fees and charge other non-customer members? If so, 
please explain how.

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 e-mail to [email protected]. Please include 
File Number SR-NYSEAmex-2009-38 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-NYSEAmex-2009-38. This 
file number should be included on the subject line if e-mail 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 inspection 
and copying in the Commission's Public Reference Room, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 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-NYSEAmex-2009-38 and should 
be submitted on or before August 21, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-18271 Filed 7-30-09; 8:45 am]
BILLING CODE 8010-01-P