[Federal Register Volume 91, Number 18 (Wednesday, January 28, 2026)]
[Notices]
[Pages 3742-3745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-01628]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104672; File No. SR-NYSEARCA-2026-03]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Modify the
NYSE Arca Options Fee Schedule To Adopt Additional Rebates for Certain
Manual and QCC Executions
January 23, 2026.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on January 14, 2026, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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'') regarding the Floor Broker Fixed Cost Prepayment
Incentive Program to adopt certain additional rebates for manual and
QCC executions. The proposed rule change is available on the Exchange's
website at www.nyse.com and at the principal office of the Exchange.
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 modify the Floor Broker Fixed Cost
Prepayment Incentive Program (the ``FB Prepay Program'') by adopting
certain additional rebates for manual executions. The Exchange proposes
to implement the fee change effective January 14, 2026.\4\
---------------------------------------------------------------------------
\4\ The Exchange previously filed to amend the Fee Schedule on
December 31, 2025, for January 2, 2026 effectiveness (SR-NYSEARCA-
2025-92), and withdrew such filing on January 14, 2026.
---------------------------------------------------------------------------
The FB Prepay Program is a prepayment incentive program that allows
Floor Brokers to prepay certain of their annual Eligible Fixed Costs in
exchange for volume rebates.\5\ Participating Floor Brokers receive
their rebate amount on a monthly basis. All Floor Brokers that
participate in the FB Prepay Program are eligible for a rebate on
manual billable volume of ($0.08) per billable side, payable on a
monthly basis. In addition, FB Prepay Program participants that achieve
more than 500,000 manual billable sides in a month are eligible for an
additional rebate of ($0.02) per billable side, which is payable back
to the first billable side. Participants in the FB Prepay Program may
be eligible for additional rebates based on combined QCC and manual
billable volume, payable back to the first billable side, as shown in
the table on the Fee Schedule.\6\ The calculation of volume on which
rebates earned through the Manual Billable Rebate Program would be paid
is based on transactions including at least one side for which manual
transaction fees are applicable and excludes QCCs.\7\
---------------------------------------------------------------------------
\5\ See Fee Schedule, FLOOR BROKER FIXED COST PREPAYMENT
INCENTIVE PROGRAM (the ``FB Prepay Program''). ``Eligible Fixed
Costs'' include the OTP Trading Participant Rights fee for a Floor
Broker, Floor Broker Order Capture Device--Market Data Fees, Floor
Booth fees, the Options Floor Access Fee, and Wire Services fees, as
set forth in the table in the Fee Schedule.
\6\ See Fee Schedule, FB Prepay Program, Table titled
``Qualifying Volume'' and ``Rebate per Billable Side''.
\7\ The Exchange proposes to continue to exclude volume from QCC
transactions from the calculation of eligible volume for rebates
paid through the Manual Billable Rebate Program because Floor
Brokers would be eligible for separate credits and rebates for QCC
transactions.
---------------------------------------------------------------------------
[[Page 3743]]
The Exchange proposes to modify the FB Prepay Program to offer
participants an additional rebate based on combined QCC and manual
billable volume. Specifically, the Exchange proposes to offer an
additional rebate of ($0.01) per manual billable side and an additional
rebate of ($0.01) per Non-Customer vs. Non-Customer QCC contract, if
participants exceed the aggregate of QCC Tier 1 and QCC Tier 2
qualifications in combined manual billable and QCC billable contracts.
Consistent with the current additional rebate, the proposed additional
rebates would be retroactive to the first billable side. The Exchange
proposes to describe the new rebates in proposed new rule text that
would appear below the table titled ``Qualifying Volume'' and ``Rebate
per Billable Side'' in the FB Prepay Program section of the Fee
Schedule.
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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The proposed change is reasonable, equitable, and not unfairly
discriminatory. As a threshold matter, the Exchange is subject to
significant competitive forces in the market for options securities
transaction services that constrain its pricing determinations in that
market. The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. In Regulation NMS,
the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \10\
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (S7-10-04) (``Reg NMS
Adopting Release'').
---------------------------------------------------------------------------
There are currently 18 registered options exchanges competing for
order flow. Based on publicly-available information, and excluding
index-based options, no single exchange has more than 16% of the market
share of executed volume of multiply-listed equity and ETF options
trades.\11\ Therefore, currently no exchange possesses significant
pricing power in the execution of multiply-listed equity and ETF
options order flow. More specifically, in November 2025, the Exchange
had 10.67% market share of executed volume of multiply-listed equity
and ETF options trades.\12\ In such a low-concentrated and highly
competitive market, no single options exchange possesses significant
pricing power in the execution of option order flow. Within this
environment, market participants can freely and often do shift their
order flow among the Exchange and competing venues in response to
changes in their respective pricing schedules.
---------------------------------------------------------------------------
\11\ The OCC publishes options and futures volume in a variety
of formats, including daily and monthly volume by exchange,
available here: https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics.
\12\ Based on a compilation of OCC data for monthly volume of
equity-based options and monthly volume of ETF-based options, see
id., the Exchange's market share in multiply-listed equity and ETF
options decreased from 13.22% in November 2024 to 10.67% for the
month of November 2025.
---------------------------------------------------------------------------
The proposed changes to the FB Prepay Program are designed to
attract Floor Brokers that have not yet participated in the program.
The FB Prepay Program continues to be designed to encourage the role
performed by Floor Brokers in facilitating the execution of orders via
open outcry, a function which the Exchange wishes to support for the
benefit of all market participants.
The Exchange believes that the proposed changes to the Manual
Billable Rebate program are reasonable because they should continue to
encourage Floor Brokers to participate in the FB Prepay Program, and to
provide liquidity on the Exchange. In particular, the proposed
additional rebates should incent OTP Holders to increase the number of
manual--and QCC--transactions sent to the Exchange. Moreover, the new
rebates should incent Floor Brokers to encourage OTP Holders to
aggregate their executions at the Exchange as a primary execution
venue. To the extent that the proposed change achieves its purpose of
attracting more volume to the Exchange, this increased order flow would
continue to make the Exchange a more competitive venue for order
execution, thus improving market quality for all market participants.
The Exchange believes the proposed rule change is an equitable
allocation of its fees and credits because the proposal is based on the
amount and type of business transacted on the Exchange. Floor Brokers
are not obligated to participate in the FB Prepay Program, and those
who do can choose to execute manual billable volume and QCC
transactions to earn the proposed rebates through the Manual Billable
Rebate Program or not. In addition, the Manual Billable Rebate Program
continues to be equally available to all Floor Brokers that participate
in the FB Prepay Program.
The Exchange believes the proposed change is not unfairly
discriminatory because it is based on the amount and type of business
transacted on the Exchange. Floor Brokers are not obligated to execute
manual billable or QCC transactions or participate in the FB Prepay
Program, and the proposed rebates offered through the Manual Billable
Rebate Program are available to all Floor Brokers that participate in
the FB Prepay Program on a non-discriminatory basis. The proposed
changes are designed to encourage Floor Brokers to utilize the Exchange
as a primary trading venue for all transactions (if they have not done
so previously) and increase manual billable and QCC volume sent to the
Exchange.
To the extent that the proposed continuation of (and modifications
to) the FB Prepay Program and Manual Billable Rebate Program attract
more manual transactions and QCCs to the Exchange, this increased order
flow would continue to make the Exchange a more competitive venue for
order execution. Thus, the Exchange believes the proposed rule change
would improve market quality for all market participants on the
Exchange and attract more order flow to the Exchange, thereby improving
market-wide quality and price discovery. The resulting increased volume
and liquidity would provide more trading opportunities and tighter
spreads to all market participants and thus would promote just and
equitable principles of trade, remove impediments to and perfect the
mechanism of a free and open market and a national market system and,
in general, protect investors and the public interest.
To the extent the proposed change continues to attract greater
volume and liquidity, the Exchange believes the proposed change would
improve the Exchange's overall competitiveness and strengthen its
market quality for all market participants. In the backdrop of the
competitive environment in which the Exchange operates, the proposed
rule change is a reasonable attempt by the Exchange to increase the
depth of its
[[Page 3744]]
market and improve its market share relative to its competitors.
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.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act, the Exchange does
not believe that the proposed rule change would impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, as discussed above, the Exchange believes
that the proposed change would encourage the submission of additional
liquidity to a public exchange, thereby promoting market depth, price
discovery and transparency and enhancing order execution opportunities
for all market participants. As a result, the Exchange believes that
the proposed changes further the Commission's goal in adopting
Regulation NMS of fostering integrated competition among orders, which
promotes ``more efficient pricing of individual stocks for all types of
orders, large and small.'' \13\
---------------------------------------------------------------------------
\13\ See Reg NMS Adopting Release, supra note 10, at 37499.
---------------------------------------------------------------------------
Intramarket Competition. The proposed modifications to the FB
Prepay Program, in particular the proposed additional rebates, would be
available to all similarly-situated Floor Brokers that participate in
the FB Prepay Program. The Exchange believes that the proposed change
to adopt the additional rebates for Floor Brokers would 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 would impair the
ability of any market participants or competing order execution venues
to maintain their competitive standing in the financial markets. To the
extent that the continuation of the FB Prepay Program and the proposed
additional credits imposes an additional competitive burden on non-
Floor Brokers, the Exchange believes that any such burden would be
appropriate because Floor Brokers serve an important function in
facilitating the execution of orders and price discovery for all market
participants.
Intermarket Competition. The Exchange operates in a highly
competitive market in which market participants can readily favor one
of the 17 other competing option exchanges if they deem fee levels at a
particular venue to be excessive.
In such an environment, the Exchange must continually adjust its
fees and credits to remain competitive with other exchanges and to
attract order flow to the Exchange. Based on publicly-available
information, and excluding index-based options, no single exchange has
more than 16% of the market share of executed volume of multiply-listed
equity and ETF options trades.\14\ Therefore, currently no exchange
possesses significant pricing power in the execution of multiply-listed
equity and ETF options order flow. More specifically, in November 2025,
the Exchange had 10.67% market share of executed volume of multiply-
listed equity and ETF options trades.\15\
---------------------------------------------------------------------------
\14\ The OCC publishes options and futures volume in a variety
of formats, including daily and monthly volume by exchange,
available here: https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics.
\15\ Based on a compilation of OCC data for monthly volume of
equity-based options and monthly volume of ETF-based options, see
id., the Exchange's market share in multiply-listed equity and ETF
options decreased from 13.22% in October 2024 to 10.67% for the
month of October 2025.
---------------------------------------------------------------------------
The Exchange believes that the proposed changes reflect this
competitive environment because they modify the Exchange's fees and
rebates in a manner designed to continue to incent OTP Holders to
direct trading interest (particularly manual transactions and QCC
transactions) to the Exchange, to provide liquidity and to attract
order flow. To the extent that Floor Brokers are encouraged to
participate in the FB Prepay Program and/or incented to utilize the
Exchange as a primary trading venue for all transactions, all of the
Exchange's market participants should benefit from the improved market
quality and increased opportunities for price improvement.
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) \16\ of the Act and subparagraph (f)(2) of Rule
19b-4 \17\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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) \18\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\18\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-NYSEARCA-2026-03 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-2026-03. 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 website (https://www.sec.gov/rules/sro.shtml). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-NYSEARCA-2026-03 and should be submitted
on or before February 18, 2026.
[[Page 3745]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------
\19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-01628 Filed 1-27-26; 8:45 am]
BILLING CODE 8011-01-P