[Federal Register Volume 78, Number 88 (Tuesday, May 7, 2013)]
[Notices]
[Pages 26674-26675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10740]
[[Page 26674]]
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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.
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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 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.
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\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).
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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.
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\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).
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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 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.
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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 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.
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\8\ See supra n.5.
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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.
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\9\ See id.
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[[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.
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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 [email protected]. 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\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-10740 Filed 5-6-13; 8:45 am]
BILLING CODE 8011-01-P