[Federal Register Volume 82, Number 149 (Friday, August 4, 2017)]
[Notices]
[Pages 36516-36519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16403]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81268; File No. SR-NYSEARCA-2017-79]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE 
Arca Options Fee Schedule

July 31, 2017.
    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 July 20, 2017, 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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[[Page 36517]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to modify the NYSE Arca Options Fee Schedule 
(``Fee Schedule'') to add clarification and consistency, but the 
Exchange is not proposing any changes to its fees. The Exchange 
proposes to implement the fee change effective July 20, 2017. 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 purpose of this filing is to make a number of textual changes 
designed to clarify and add consistency to the Fee Schedule. The 
Exchange is not proposing to make any substantive changes to its 
current fees.
    Earlier this month, July 2017, the Exchange submitted a filing that 
included clarifying changes to certain tables regarding Market Maker 
incentives (the ``MM Cleanup Filing'').\4\ The first sets of proposed 
changes are conforming changes, which are designed to align the text 
used in other incentive programs described in the Fee Schedule with 
those modified in the MM Cleanup Filing. Specifically, these conforming 
changes include:
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    \4\ See Securities Exchange Act Release No. 81140 (July 13, 
2017), 82 FR 33194 (July 19, 2017) (SR-NYSEArca-2017-77).
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     The Exchange proposes to re-locate the reference to 
Endnote 15 from the beginning [sic] to the end [sic] of each of the 
following tables: ``Customer and Professional Customer Monthly Posting 
Credit Tiers and Qualifications for Executions in Penny Pilot Issues''; 
``Customer and Professional Customer Incentive Program''; and [sic] 
``Non-Customer Monthly Posting Credit Tiers and Qualifications for 
Executions in Non-Penny Pilot Issues''; ``Take Fee Discount 
Qualification for Penny Pilot Issues''; and ``Take Fee Discount 
Qualification for Non-Penny Pilot Issues'' (the ``Modified Tables''). 
Endnote 15 provides that the qualification thresholds set forth in the 
applicable tables ``[i]ncludes transaction volume from the OTP Holder's 
or OTP Firm's affiliates or its Appointed OFP or Appointed MM.'' \5\ 
Consistent with this proposed change, the Exchange proposes to remove 
the language that appears at the end of each of the Modified Tables 
providing that volume of an Appointed MM or Appointed OFP may be 
included because it would be duplicative of text contained in Endnote 
15.
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    \5\ See Fee Schedule, Endnote 15.
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     The Exchange proposes to replace reference to ``Total 
Industry Customer equity and ETF option average daily volume'' with 
``TCADV'' (as defined in Endnote 8) \6\ and to use this shorthand 
reference in the Modified Tables. Given that TCADV is defined in 
Endnote 8 and given that the ``Customer and Professional Customer 
Monthly Posting Credit Tiers and Qualifications for Executions in Penny 
Pilot Issues'' includes reference to Endnote 8, the Exchange proposes 
to remove the following language from this table because it is 
duplicative: ``Qualifications based in part on Total Industry Customer 
equity and ETF option average daily volume (``TCADV'').''
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    \6\ See supra note 4, the MM Cleanup Filing (adding definition 
of TCADV).
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     In each of the Modified Tables, the Exchange proposes to 
replace reference to ``Posted Orders'' with ``posted interest'' and any 
reference to ``orders'' with ``interest'' to make clear that, where 
applicable, liquidity may include orders or quotes.
     For consistency, the Exchange proposes to remove any 
capitalization from ``issues'' in reference to ``all issues'' in the 
Modified Tables. The Exchange also proposes to capitalize ``Issues'' as 
relates to ``Penny Pilot Issues,'' in the preamble to the ``Customer 
and Professional Customer Monthly Posting Credit Tiers and 
Qualifications for Executions in Penny Pilot Issues,'' and as relates 
to ``non-Penny Pilot Issues,'' in the preamble to the ``Non-Customer 
Monthly Posting Credit Tiers and Qualifications for Executions in Non-
Penny Pilot Issues.''
     The Exchange also proposes to add a comma and, where 
applicable, the word ``or'', to signify an alternative qualification 
basis in certain of the Modified Tables as well as to remove any 
capitalization of the word ``Plus'' as relates to any alterative 
qualification bases in the Modified Tables.
     The Exchange also proposes to alter the language in the 
Modified Tables to clarify how the credits are applied, i.e., that 
credit is applied to ``electronic executions of [the applicable] posted 
interest'' in the applicable securities. For consistency and clarity, 
the Exchange proposes to add ``Electronic'' to, as well as to 
capitalize ``Non-Penny,'' in the table heading for the ``Non-Customer 
Monthly Posting Credit Tiers and Qualifications for Executions in Non-
Penny Pilot Issues.''
     For ease of reference, the Exchange proposes to rename the 
``Non-Customer Monthly Posting Credit Tiers and Qualifications for 
Executions in Non-Penny Pilot Issues'' to ``Non-Customer, Non-Penny 
Pilot Posting Credit Tiers.''
    In addition to the foregoing, the Exchange also proposes to 
consistently utilize the term ``Customer'' to include Professional 
Customers, unless otherwise specified. Per the current Fee Schedule, 
regarding trade-related charges for standard options, the Exchange 
specifies that ``[u]nless Professional Customer executions are 
specifically delineated, such executions will be treated as Customer 
executions for fee purposes.'' \7\ Although this language should 
(arguably) apply to the sections that follow, including incentive 
programs based on posted interest, the Exchange refers to both Customer 
and Professional Customer volume being counted towards the same 
incentives.\8\ Because the Exchange treats both Professional Customer 
and Customer volume the same for purposes of achieving the Customer 
Posting Tiers, the Exchange proposes to remove reference to 
Professional Customer from these sections of the Fee Schedule.'' \9\
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    \7\ See Fee Schedule, NYSE Arca Options: Trade-Related Changes 
for Standard Options. For additional clarity, the Exchange proposes 
to revise this sentence to put Customer in quotations and to add 
reference to credits. See proposed Fee Schedule, NYSE Arca Options: 
Trade-Related Changes for Standard Options (providing that 
``[u]nless Professional Customer executions are specifically 
delineated, such executions will be treated as ``Customer'' 
executions for fee/credit purposes).
    \8\ See id., Customer and Professional Customer Monthly Posting 
Credit Tiers and Qualifications for Executions in Penny Pilot 
Issues; Customer and Professional Customer Incentive Program; and 
Customer and Professional Customer Posting Credit Tiers In Non Penny 
Pilot Issues (collectively, the ``Customer Posting Tiers'').
    \9\ See proposed Fee Schedule, the Customer Posting Tiers.

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[[Page 36518]]

    Consistent with this change, the Exchange proposes the following 
changes to the Customer Posting Tiers:
     The Exchange proposes to re-name the ``Customer and 
Professional Customer Monthly Posting Credit Tiers and Qualifications 
for Executions in Penny Pilot Issues,'' as ``Customer Penny Pilot 
Posting Credit Tiers.'' Consistent with certain of the conforming 
changes referenced above regarding how the applicable credits are the 
[sic] applied, the Exchange also proposes to modify the preamble to 
provide that ``OTP Holders and OTP Firms meeting the qualifications 
below will receive the corresponding posting credit on all electronic 
executions of Customer posted interest in Penny Pilot Issues.'' In 
addition, the Exchange proposes to update cross-references to this 
newly named table as appears in the Firm and Broker Dealer Monthly Fee 
Cap.
     The Exchange proposes to add a title to signify the 
incentive program for ``Customer and Professional Customer Posting 
Credit Tiers In Non Penny Pilot Issues,'' which title would be 
``Customer Posting Credit Tiers in Non-Penny Pilot Issues.'' The 
Exchange proposes to add a hyphen to the word ``Non Penny'' as appears 
in the table, for internal consistency. The Exchange also proposes to 
add a preamble to this table, which provides that ``OTP Holders and OTP 
Firms meeting the qualifications below will receive the corresponding 
credit on all electronic executions of Customer posted interest in Non-
Penny Pilot issues,'' and to reference Endnotes 8 and 15, which 
describe what is included in eligible monthly volume and how that 
volume is calculated. Consistent with the proposed reference to Endnote 
8 at the beginning of this table, which includes a description of 
qualifying ADV of Retail Orders of U.S. Equity Market Share on the NYSE 
Arca Equity Market, the Exchange proposes to remove duplicative 
references to Endnote 8 that appear throughout this table.
     For avoidance of doubt, the Exchange proposes to add a 
sentence to Endnote 8 which provides that repeats that [sic] ``[u]nless 
Professional Customer executions are specifically delineated, such 
executions will be treated as ``Customer'' executions executions [sic] 
in calculating qualifications for monthly posting credits or 
discounts.''
    The Exchange also proposes to define ``Non-Customers,'' as used in 
the Fee Schedule, to include Firms, Broker Dealers, and Market 
Makers.\10\ Consistent with this change, the Exchange proposes to 
utilize, as shorthand, the defined term Non-Customer in place of 
references to Firms, Broker Dealers and Market Makers.\11\
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    \10\ See proposed Fee Schedule, NYSE Arca Options: Trade-Related 
Changes for Standard Options (providing that ``Firms, Broker 
Dealers, and Market Makers are collectively referred to herein as 
``Non-Customers'').
    \11\ See proposed Fee Schedule, Discount in Take Liquidity Fees 
for Professional Customer and Non-Customer Liquidity Removing 
Interest; Take Fee Discount Qualification for Penny Pilot Issues 
(providing alternative threshold of at least 2.00% of TCADV from 
Professional Customer and Non-Customer Liquidity Removing interest 
in all issues.''
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    Finally, the Exchange also proposes to re-locate the Market Maker 
Incentive For Penny Pilot Issues; the Market Maker Incentive For Non-
Penny Pilot Issues; and the MM Tiers (collectively, the ``MM Tables''), 
without altering the substance of these tables.\12\ Specifically, the 
Exchange proposes to move the MM Tables immediately below the current 
Discount in Take Liquidity Fees for Professional Customer, Market 
Maker, Firm, and Broker Dealer Liquidity Removing Orders,\13\ which 
would place the MM Tables Immediately before the recently modified 
``Market Maker Penny Pilot and SPY Posting Credit Tiers.'' \14\ The 
Exchange believes moving table applicable to certain participants 
adjacent to each other would add to the clarity of the Fee Schedule and 
make it easier to navigate and comprehend.
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    \12\ See supra note 4, the MM Cleanup Filing (includes 
modifications to the text of the MM Tables).
    \13\ See supra note 10 (proposing to re-name this table).
    \14\ See supra note 4, the MM Cleanup Filing (includes 
modifications to the text of the MM Tables).
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    To the extent not specifically noted herein, the Exchange has also 
corrected certain typographical errors (such as missing hyphens or 
redundant endnote markings) as well as streamlined certain text to add 
clarity and transparency to the Fee Schedule.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\15\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\16\ 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. There are no changes to actual 
fees in this filing.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes the proposed non-substantive changes to the 
Fee Schedule are reasonable, equitable, and not unfairly discriminatory 
because the changes would add clarity, transparency and internal 
consistency to the Fee Schedule making it easier to navigate and 
comprehend, which would benefit all market participants.
    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,\17\ 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 
textual changes are not intended to have any impact on competition, but 
instead are designed to make the Fee Schedule easier for market 
participants to navigate and digest, which is in the public interest.
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    \17\ 15 U.S.C. 78f(b)(8).
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    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 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) \18\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \19\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 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

[[Page 36519]]

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) \20\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \20\ 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-2017-79 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-NYSEArca-2017-79. 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 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-NYSEArca-2017-79, and should 
be submitted on or before August 25, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16403 Filed 8-3-17; 8:45 am]
 BILLING CODE 8011-01-P