[Federal Register Volume 78, Number 205 (Wednesday, October 23, 2013)]
[Notices]
[Pages 63261-63263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24767]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70703; File No. SR-NYSEArca-2013-102]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Options Fee Schedule Relating to Market Maker and Lead Market 
Maker Transaction Credits

October 17, 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 October 7, 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Options Fee Schedule 
(``Fee Schedule'') to conform references to certain Market Maker and 
Lead Market Maker (``LMM'') transaction credits to the transaction 
credits implemented in a recent fee change. The Exchange proposes to 
implement the fee change immediately. 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.

[[Page 63262]]

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 conform 
references to certain Market Maker and LMM transaction credits to the 
transaction credits implemented in a recent fee change. The Exchange 
proposes to implement the fee change immediately.
    The Exchange recently amended the Fee Schedule to reduce the credit 
for the base Market Maker monthly posting credit tier for Penny Pilot 
issues, including SPY, from $0.32 to $0.28.\4\ This base tier credit 
applies to posted electronic executions in Penny Pilot issues for 
Market Makers that do not qualify for the Market Maker Select Tier 
credit of $0.32 or the Market Maker Super Tier credit of $0.37. The 
base tier credit is duplicative of the standard credit for posted 
electronic Market Maker executions in Penny Pilot issues that is 
specified in the standard transaction fee and credit table in the Fee 
Schedule (i.e., the table that specifies the fees and credits that 
apply if a separate table or section of the Fee Schedule is not 
applicable). In other words, a Market Maker that does not qualify for 
the Select Tier or the Super Tier credit is effectively subject to the 
standard transaction fee and credit table in the Fee Schedule. The 
legacy $0.32 Market Maker credit still appears within the standard fee 
and credit table. The Exchange therefore proposes to similarly reduce 
the standard Market Maker credit within the standard transaction fee 
and credit table from $0.32 to $0.28 for posted electronic Market Maker 
executions in Penny Pilot issues.\5\ Without this change the Fee 
Schedule would reflect two different credits applicable to the same 
posted electronic Market Maker executions in Penny Pilot issues.
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    \4\ See Securities Exchange Act Release No. 70504 (September 25, 
2013), 78 FR 60358 (October 1, 2013) (SR-NYSEArca-2013-93).
    \5\ The fee change established pursuant to SR-NYSEArca-2013-93 
became effective on October 1, 2013. The Exchange will therefore 
apply the $0.28 credit to all posted electronic Market Maker 
executions in Penny Pilot issues that do not qualify for the Select 
Tier or the Super Tier credit beginning on October 1, 2013.
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    The standard LMM credit within the standard transaction fee and 
credit table for posted electronic executions in Penny Pilot issues 
currently is also $0.32. The Exchange proposes to similarly reduce this 
credit from $0.32 to $0.28.\6\ This reduction would maintain equal 
standard credits for LMMs and Market Makers for posted electronic 
executions in Penny Pilot issues, which was the case prior to the 
recent fee change that reduced the credit for the base Market Maker 
monthly posting credit tier for Penny Pilot issues, including SPY, from 
$0.32 to $0.28.\7\
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    \6\ This aspect of the proposed change will become effective 
immediately upon filing, at which point the Exchange will apply the 
$0.28 credit to posted electronic LMM executions in Penny Pilot 
issues. The Exchange will apply the current $0.32 credit to posted 
electronic LMM executions in Penny Pilot issues prior to such date 
of effectiveness.
    \7\ See supra, note 4.
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    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 
and LMMs, would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\9\ 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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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed change is reasonable 
because without it the Fee Schedule would reflect two different credits 
applicable to the same posted electronic Market Maker executions in 
Penny Pilot issues. The proposed change is also reasonable because it 
would maintain equal standard credits for LMMs and Market Makers for 
posted electronic executions in Penny Pilot issues.
    The Exchange believes that the proposed change is equitable and not 
unfairly discriminatory because it would apply to all Market Makers and 
LMMs on an equal and non-discriminatory basis. The Exchange further 
believes that the proposed change is equitable and not unfairly 
discriminatory because it would reasonably ensure consistency and 
conformity regarding duplicative references to the credits applicable 
to posted electronic Market Maker executions in Penny Pilot issues 
while also reasonably ensuring that Market Maker and LMM credits for 
posted electronic executions in Penny Pilot issues are equal.
    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,\10\ 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 eliminate any potential confusion for Market 
Makers regarding the applicable credit for posted electronic executions 
in Penny Pilot issues as a result of a recent fee change that amended 
one reference to the applicable rate, but not a duplicative reference 
in the Fee Schedule. Additionally, the proposed change would reasonably 
ensure that LMMs receive a standard credit for posted electronic 
executions in Penny Pilot issues that is equal to the standard credit 
received by Market Makers, which was the case prior to the recent fee 
change that reduced the credit for the base Market Maker monthly 
posting credit tier for Penny Pilot issues, including SPY, from $0.32 
to $0.28.\11\
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    \10\ 15 U.S.C. 78f(b)(8).
    \11\ See supra, note 4.
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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) \12\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \13\ thereunder, because it establishes a due,

[[Page 63263]]

fee, or other charge imposed by the Exchange.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 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-2013-102 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-2013-102. 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-2013-102, and 
should be submitted on or before November 13, 2013.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24767 Filed 10-22-13; 8:45 am]
BILLING CODE 8011-01-P