[Federal Register Volume 81, Number 98 (Friday, May 20, 2016)]
[Notices]
[Pages 31996-31999]
[FR Doc No: 2016-11880]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77840; File No. SR-FICC-2016-002]

Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing To Suspend the Interbank Service of the GCF
Repo[supreg] Service

May 16, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 5, 2016, the Fixed Income Clearing Corporation (``FICC'' or the
``Corporation'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FICC. 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.
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The purpose of this filing is to suspend the interbank service of
the GCF Repo[supreg] service, as described more fully below. The
proposed suspension does not require changes to the text of the
Government Securities Division (``GSD'') Rulebook (the ``GSD
Rules''),\3\ however, changes will occur within FICC's Real-Time Trade
Matching (``RTTM[supreg]'') system to effectuate this change.
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    \3\ The GSD Rulebook is available at DTCC's Web site,
www.dtcc.com/legal/rules-and-procedures.aspx.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency 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 these statements may be examined at
the places specified in Item IV below. The clearing agency has prepared
summaries, set forth in sections A, B, and C below, of the most
significant aspects of such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

1. Purpose
i. Reasons for Adopting the Proposed Rule Change
    The GCF Repo service allows GSD dealer members (hereinafter ``GCF
Repo Participants'') who choose to participate in the service to trade
general collateral repos throughout the day without requiring intra-
day, trade-for-trade settlement on a delivery-versus-payment basis.\4\
The service allows the GCF Repo Participants to trade such general
collateral repos, based on rate and term, throughout the day with
inter-dealer brokers on a blind basis. Standardized, generic CUSIP
numbers have been established exclusively for GCF Repo processing and
are used to specify the acceptable type of underlying Fedwire book-
entry eligible collateral, which includes Treasuries, Agencies and
certain mortgage-backed securities.
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    \4\ Securities Exchange Act Release No. 34-57652 (April 11,
2008), 73 FR 20999 (April 17, 2008) (SR-FICC-2007-08).
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    The GCF Repo service currently operates on an interbank basis and
on an intrabank basis. ``Interbank'' means that the two GCF Repo
Participants which have been matched in a GCF Repo transaction each
clear at a different clearing bank. ``Intrabank'' means that the two
GCF Repo Participants which have been matched in a GCF Repo transaction
clear at the same clearing bank.
    Since 2011, FICC has been committed to working with its clearing
banks, JP Morgan Chase and The Bank of New York Mellon (together
hereinafter referred to as the ``Clearing Banks''), to make changes to
its GCF Repo service in order to comply with the recommendations that
had been made by the Tri-Party Repo Infrastructure Reform Task Force
(``TPR''),\5\ an industry group formed and sponsored by the Federal
Reserve Bank of New York.\6\ Because the GCF Repo service operates as a
triparty mechanism, FICC was requested to incorporate changes to the
GCF Repo service to align the service with other TPR recommended
changes for the overall triparty market.
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    \5\ Information about the Federal Reserve's Tri-Party Repo
Infrastructure Reform is available via http://www.newyorkfed.org/banking/tpr_infr_reform.html.
    \6\ The TPR's effort shall hereinafter be referred to as
``Triparty Reform.''
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    The main purpose of the TPR was to develop recommendations to
address the risk presented by triparty repo transactions due to the
morning reversal (commonly referred to as the ``unwind'') process and
to move to a process by which transactions are collateralized all day.
By way of background, the GCF Repo service was originally designed to
have transactions ``unwind'' every morning in order to mirror the
transactions in the triparty repo market. Prior to Triparty Reform,
transactions submitted on ``Day 1'' unwound on the morning of ``Day
2.'' To ``unwind'' means that the securities are returned to the lender
of securities in the transaction and the cash is returned to the
borrower of securities.
    Because of certain changes to the way in which the Triparty Reform
effort was to proceed and the impact of such changes on the interbank
service of the GCF Repo service as further described below, FICC is
proposing to suspend the interbank service of the GCF Repo service. The
intrabank service will continue to operate as it does today.
ii. The Situation That the Proposed Rule Change Is Intended To Address
and the Manner in Which the Proposed Rule Change Will Operate To
Resolve It
    By way of background, all collateral that is settled via the
interbank service is unwound the next morning to FICC's account at the
pledging Clearing Bank in order to make the collateral available for
collateral substitutions. In order to facilitate this intraday
collateral substitution process, the Clearing Banks currently extend
credit each business day to FICC at no charge. This uncapped and
uncommitted credit extension to FICC facilitates the GCF Repo
settlement process for both the intra-day and end of day settlement.
The final changes related to the Triparty Reform effort would have
eliminated the need for uncapped and uncommitted credit (a TPR goal) by
including the development of interactive messages for the collateral
substitution process (this was referred to as the ``Sub Hub''), which
would have eliminated the need for the current morning unwind of
interbank GCF Repo and would have allowed for substitution of
collateral across the Clearing Banks with minimal intra-day credit
required. The last change was also going to include a streamlined end
of day GCF Repo settlement process to reduce the amount of cash and
collateral needed in order to complete settlement. This change would
have incorporated the concept of a ``cap'' on FICC credit from the
Clearing Banks and an automated solution would have been developed to
process the interbank GCF Repo settlement without breaching the defined
and agreed to caps. This means that the amount of credit that FICC
would have required from the Clearing Banks would have been managed to
a minimal amount.
    FICC was advised by one of the Clearing Banks that the Sub Hub has
been determined not to be feasible and that FICC would instead require
a capped line of credit which would be applicable to the current
interbank service (without the benefits of any re-design to manage the
amounts of needed credit). In other words, this new proposed capped
line of credit would be applied to the interbank service as the service
currently operates and not in the re-designed fashion that was
contemplated by the Triparty Reform effort, which would have allowed
for smaller settlement amounts.
    FICC and several GCF Repo Participants considered the feasibility
of a cap on the current structure of the interbank service of the GCF
Repo service without the Sub Hub functionality and without the re-
design of the interbank service to allow for manageable caps. FICC and
such GCF Repo Participants determined that there would be significant
operational constraints in attempting to trade and settle GCF Repo
while attempting to implement a cap on interbank GCF Repo trading and
settlement. Specifically, the inter-dealer brokers would need to be
integrated as a group from a technological perspective in order to be
able to track the GCF Repo Participants' real-time netted positions,
from an intrabank and interbank perspective, to ensure that the cap is
not breached; this would require an integrated pre-trade check across
each inter-dealer broker's platform and FICC to ensure conformity to
the cap.
    Because FICC cannot operate the current interbank service within a
capped credit amount as proposed by the one of the Clearing Banks with
the current settlement process at the Clearing Banks and because it is
not feasible to institute a pre-trade validation system as discussed
above, FICC will no longer operate the interbank service of the GCF
Repo service after July 15, 2016 (the ``Suspension Date''), which is
approximately six (6) weeks prior to the date that the Clearing Bank
has stated it will begin to impose the capped line of credit (September
1, 2016 or the ``Capped Charges Date''). Subsequent to

the Suspension Date, inter-dealer brokers will only be permitted to
execute transactions among GCF Repo Participants within the same
Clearing Bank. Inter-dealer brokers will establish two markets for GCF
Repo trading--one for each Clearing Bank. This is the same approach
that was utilized when the interbank service was previously suspended
between 2003 and 2008.\7\ In addition, GSD will only accept and process
transactions among GCF Repo Participants that settle within the same
Clearing Bank. As a result, the RTTM[supreg] system will not accept and
process transactions among GCF Repo Participants who settle at
different Clearing Banks. FICC will continue to explore whether there
are other ways in which the interbank service might be re-introduced in
the future.
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    \7\ Securities Exchange Act Release No. 48006 (June 10, 2003),
68 FR 35745 (June 16, 2003) (SR-FICC-2003-04).
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iii. The Manner in Which the Proposed Rule Change Will Affect GSD
Netting Members
    GCF Repo Participants will be affected by the suspension of the
interbank service in that, after the Suspension Date, these Members
will only be matched with GCF Repo Participants who clear at their
Clearing Bank. This may limit the potential number of counterparties
available to GCF Repo Participants and for some GCF Repo Participants
this limitation may significantly reduce the benefits of the GCF Repo
service.
    Currently, one Clearing Bank has more GCF Repo Participants than
the other Clearing Bank. Thus, GCF Repo Participants who clear at the
Clearing Bank with the least number of GCF Repo Participants will have
a limited number of GCF Repo counterparties with which they are able to
transact. This limitation may result in a less liquid market for GCF
Repo Participants within that particular Clearing Bank. The GCF Repo
Participants at the other Clearing Bank may not experience this
limitation since they will have more GCF Repo counterparties available
to them.
    The fact that interbank settlement currently occurs on a daily
basis suggests that GCF Repo Participants benefit from their ability to
borrow money from GCF Repo counterparties on an interbank basis. Once
this option no longer exists, financing needs may be absorbed within
the intrabank GCF Repo market or, it may shift to the delivery-versus-
payment (``DVP'') or triparty repo markets. It is also possible that
the number of GCF Repo Participants may decrease depending upon each
Participant's ability to access alternative funding sources and the
assets that such Participants are looking to finance. For example, U.S.
Treasuries and Agencies may be more easily financed in the DVP repo
market, however, Agency mortgage-backed securities (``MBS'') are not as
easily financed via the DVP repo market. Thus, GCF Repo Participants
with portfolios comprised of Agency mortgage-backed securities may have
fewer financing options due to the suspension of the interbank service.
iv. Any Significant Problems Known to FICC That Netting Members Are
Likely To Have in Complying With the Proposed Rule Change
    FICC does not believe that GCF Repo Participants will have problems
in complying with the suspension of the interbank service because of
the nature of the GCF Repo Service. Specifically, because the service
is conducted through the inter-dealer brokers on a blind basis, the
brokers will not match dealers from different Clearing Banks after the
Suspension Date.
v. Detailed Description of the Proposed Rule Changes in Exhibit 5
    No changes to the text of the GSD Rules are required to implement
the suspension of the interbank service.
2. Statutory Basis
    Pursuant to Section 17A(b)(3)(F) of the Act, GSD's Rules must be
designed to promote the prompt and accurate clearance and settlement of
securities transactions.\8\ FICC is proposing to suspend the interbank
service of the GCF Repo service because FICC cannot operate the current
interbank service within a capped credit amount as described above.
Because the Clearing Bank has stated that it will not provide credit to
FICC to complete interbank settlement above the capped amount after the
Capped Charges Date, FICC will not be able to complete settlement of
the interbank service. Therefore, in order to continue to promote the
prompt and accurate clearance and settlement of securities
transactions, FICC is proposing to suspend the interbank service.
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    \8\ 5 U.S.C. 78q-1(b)(3)(F).
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(B) Clearing Agency's Statement on Burden on Competition

    The suspension of the interbank service could have an impact on
competition based on the fact that GCF Repo Participants will only be
matched in GCF Repo transactions with other Members that clear at the
same Clearing Bank. This may limit the number of potential
counterparties for the Members. Currently, one Clearing Bank has more
GCF Repo Participants than the other Clearing Bank. Thus, GCF Repo
Participants who clear at the Clearing Bank with the least number of
GCF Repo Participants will have a limited number of GCF Repo
counterparties. This limitation may result in a less liquid market for
GCF Repo Participants within that particular Clearing Bank. However,
FICC believes that any burden on competition would be necessary and
appropriate in furtherance of the purposes of the Act. By suspending
the interbank service of the GCF Repo service, FICC is avoiding a
situation where it would not be able to complete settlement as
described above.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others

    Written comments on the suspension of the interbank service have
not yet been solicited or received. FICC will notify the Commission of
any written comments received by FICC.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change; or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

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_ADDRESS>Please include
File Number SR-FICC-2016-002 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-FICC-2016-002. 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 filings also will be available
for inspection and copying at the principal office of FICC and on
DTCC's Web site at http://www.dtcc.com/legal/sec-rule-filings.aspx. 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-FICC-2016-002 and should be
submitted on or before June 10, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11880 Filed 5-19-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 245 (Monday, December 22, 2014)]
[Notices]
[Pages 76391-76393]
[FR Doc No: 2014-29823]

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DEPARTMENT OF LABOR

Occupational Safety and Health Administration

[Docket No. OSHA-2013-0016]

Nemko-CCL, Inc.: Application for Expansion of Recognition

AGENCY: Occupational Safety and Health Administration (OSHA), Labor.

ACTION: Notice.

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SUMMARY: In this notice, OSHA announces the application of Nemko-CCL,
Inc. for expansion of its recognition as a Nationally Recognized
Testing Laboratory (NRTL) and presents the Agency's preliminary finding
to grant the application.

DATES: Submit comments, information, and documents in response to this
notice, or requests for an extension of time to make a submission, on
or before January 6, 2015.

ADDRESSES: Submit comments by any of the following methods:
    1. Electronically: Submit comments and attachments electronically
at http://www.regulations.gov, which is the Federal eRulemaking Portal.
Follow the instructions online for making electronic submissions.
    2. Facsimile: If submissions, including attachments, are not longer
than 10 pages, commenters may fax them to the OSHA Docket Office at
(202) 693-1648.
    3. Regular or express mail, hand delivery, or messenger (courier)
service: Submit comments, requests, and any attachments to the OSHA
Docket Office, Docket No. OSHA-2013-0016, Technical Data Center, U.S.
Department of Labor, 200 Constitution Avenue NW., Room N-2625,
Washington, DC 20210; telephone:<PHONE_NUMBER> (TTY number: (877) 889-
5627). Note that security procedures may result in significant delays
in receiving comments and other written materials by regular mail.
Contact the OSHA Docket Office for information about security
procedures concerning delivery of materials by express mail, hand
delivery, or messenger service. The hours of operation for the OSHA
Docket Office are 8:15 a.m.-4:45 p.m., e.t.
    4. Instructions: All submissions must include the Agency name and
the OSHA docket number (OSHA-2013-0016). OSHA places comments and other
materials, including any personal information, in the public docket
without revision, and these materials will be available online at
http://www.regulations.gov. Therefore, the Agency cautions commenters
about submitting statements they do not want made available to the
public, or submitting comments that contain personal information
(either about themselves or others) such as Social Security numbers,
birth dates, and medical data.

    5. Docket: To read or download submissions or other material in the
docket, go to http://www.regulations.gov or the OSHA Docket Office at
the address above. All documents in the docket are listed in the http://www.regulations.gov index; however, some information (e.g.,
copyrighted material) is not publicly available to read or download
through the Web site. All submissions, including copyrighted material,
are available for inspection and copying at the OSHA Docket Office.
Contact the OSHA Docket Office for assistance in locating docket
submissions.
    6. Extension of comment period: Submit requests for an extension of
the comment period on or before January 6, 2015 to the Office of
Technical Programs and Coordination Activities, Directorate of
Technical Support and Emergency Management, Occupational Safety and
Health Administration, U.S. Department of Labor, 200 Constitution
Avenue NW., Room N-3655, Washington, DC 20210, or by fax to (202) 693-
1644.

FOR FURTHER INFORMATION CONTACT: Information regarding this notice is
available from the following sources:
    Press inquiries: Contact Mr. Frank Meilinger, Director, OSHA Office
of Communications, U.S. Department of Labor, 200 Constitution Avenue
NW., Room N-3647, Washington, DC 20210; telephone:<PHONE_NUMBER>;
email<EMAIL_ADDRESS>    General and technical information: Contact Mr. Kevin Robinson,
Acting Director, Office of Technical Programs and Coordination
Activities, Directorate of Technical Support and Emergency Management,
Occupational Safety and Health Administration, U.S. Department of
Labor, 200 Constitution Avenue NW., Room N-3655, Washington, DC 20210;
phone:<PHONE_NUMBER> or email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Notice of the Application for Expansion

    The Occupational Safety and Health Administration is providing
notice that Nemko-CCL, Inc. (CCL), is applying for expansion of its
current recognition as an NRTL. CCL requests the addition of two test
standards to its NRTL scope of recognition.
    OSHA recognition of an NRTL signifies that the organization meets
the requirements specified in 29 CFR 1910.7. Recognition is an
acknowledgment that the organization can perform independent safety
testing and certification of the specific products covered within its
scope of recognition. Each NRTL's scope of recognition includes (1) the
type of products the NRTL may test, with each type specified by its
applicable test standard; and (2) the recognized site(s) that has/have
the technical capability to perform the product-testing and product-
certification activities for test standards within the NRTL's scope.
Recognition is not a delegation or grant of government authority;
however, recognition enables employers to use products approved by the
NRTL to meet OSHA standards that require product testing and
certification.
    The Agency processes applications by an NRTL for initial
recognition and for an expansion or renewal of this recognition,
following requirements in Appendix A to 29 CFR 1910.7. This appendix
requires that the Agency publish two notices in the Federal Register in
processing an application. In the first notice, OSHA announces the
application and provides its preliminary finding. In the second notice,
the Agency provides its final decision on the application. These
notices set forth the NRTL's scope of recognition or modifications of
that scope. OSHA maintains an informational Web page for each NRTL,
including CCL, which details the NRTL's scope of recognition. These
pages are available from the OSHA Web site at http://www.osha.gov/dts/otpca/nrtl/index.html.
    CCL currently has one facility recognized by OSHA for product
testing and certification, with its headquarters located at: 1940 West
Alexander Street, Salt Lake City, Utah 84119-2039. A complete list of
CCL's scope of recognition is available at https://www.osha.gov/dts/otpca/nrtl/ccl.html.

II. General Background on the Application

    CCL submitted an application, dated June 30, 2014 (Exhibit 1), to
expand its recognition to include two additional test standards. OSHA
staff performed a detailed analysis of the application packet and
reviewed other pertinent information. OSHA did not perform any on-site
reviews in relation to this application.
    Table 1 below lists the appropriate test standards found in CCL's
application for expansion for testing and certification of products
under the NRTL Program.

  Table 1--Proposed List of Appropriate Test Standards for Inclusion in
                     CCL's NRTL Scope of Recognition
------------------------------------------------------------------------
           Test standard                     Test standard title
------------------------------------------------------------------------
ANSI/AAMI ES60601-1: 2005/(R)2012.  Medical electric equipment_Part 1:
                                     General requirements for basic
                                     safety and essential performance.
UL 60601_1........................  Medical Electrical Equipment_Part 1:
                                     General Requirements for Safety.
------------------------------------------------------------------------

III. Preliminary Findings on the Application

    CCL submitted an acceptable application for expansion of its scope
of recognition. OSHA's review of the application file, and pertinent
documentation, indicate that CCL can meet the requirements prescribed
by 29 CFR 1910.7 for expanding its recognition to include the addition
of these two test standards for NRTL testing and certification listed
above. This preliminary finding does not constitute an interim or
temporary approval of CCL's application.
    OSHA welcomes public comment as to whether CCL meets the
requirements of 29 CFR 1910.7 for expansion of its recognition as an
NRTL. Comments should consist of pertinent written documents and
exhibits. Commenters needing more time to comment must submit a request
in writing, stating the reasons for the request. Commenters must submit
the written request for an extension by the due date for comments. OSHA
will limit any extension to 10 days unless the requester justifies a
longer period. OSHA may deny a request for an extension if the request
is not adequately justified. To obtain or review copies of the exhibits
identified in this notice, as well as comments submitted to the docket,
contact the Docket Office, Room N-2625, Occupational Safety and Health
Administration, U.S. Department of Labor, at the above address. These
materials also are available online at http://www.regulations.gov under
Docket No. OSHA-2013-0016.
    OSHA staff will review all comments to the docket submitted in a
timely manner and, after addressing the issues raised by these
comments, will recommend to the Assistant Secretary for Occupational
Safety and Health

whether to grant CCL's application for expansion of its scope of
recognition. The Assistant Secretary will make the final decision on
granting the application. In making this decision, the Assistant
Secretary may undertake other proceedings prescribed in Appendix A to
29 CFR 1910.7. OSHA will publish a public notice of its final decision
in the Federal Register.

IV. Authority and Signature

    David Michaels, Ph.D., MPH, Assistant Secretary of Labor for
Occupational Safety and Health, 200 Constitution Avenue NW.,
Washington, DC 20210, authorized the preparation of this notice.
Accordingly, the Agency is issuing this notice pursuant to 29 U.S.C.
657(g)(2), Secretary of Labor's Order No. 1-2012 (77 FR 3912, Jan. 25,
2012), and 29 CFR 1910.7.

    Signed at Washington, DC, on December 15, 2014.
David Michaels,
Assistant Secretary of Labor for Occupational Safety and Health.
[FR Doc. 2014-29823 Filed 12-19-14; 8:45 am]
BILLING CODE 4510-26-P


[Federal Register Volume 82, Number 6 (Tuesday, January 10, 2017)]
[Notices]
[Pages 3052-3055]
[FR Doc No: 2017-00221]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79737; File No. SR-NYSEMKT-2016-127]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Change Modifying the NYSE Amex
Options Fee Schedule

January 4, 2017.
    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 December 28, 2016, NYSE MKT LLC (``Exchange'' or ``NYSE MKT'')
filed with the Securities and Exchange Commission (``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 modify the NYSE Amex Options Fee Schedule.
The proposed 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 modify the Fee Schedule to: (1)
Adjust the qualification thresholds and transaction fees for electronic
transactions by NYSE Amex Options Marker Makers (``Sliding Scale'');
\4\ and (2) modify the prepayment programs offered by the Exchange,
including adding a new prepay option (the ``Prepayment Programs'').\5\
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    \4\ See Fee Schedule, Section I. C. (NYSE Amex Options Market
Maker Sliding Scale--Electronic), available here, https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
    \5\ See id., Section I. D. (Prepayment Program).
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Market Maker Sliding Scale
    Section I.C. of the Fee Schedule sets forth the Sliding Scale of
transaction fees charged to NYSE Amex Options Marker Makers (referred
to as Market Makers herein), which per contract fees decrease as Market
Maker trades higher monthly volumes.\6\ Currently, Market Makers that
have monthly volume on the Exchange of 0.10% or less of total ICADV are
charged a base rate of $0.25 per contract and, these same market
participants, upon reaching certain volume thresholds, or Tiers,
receive a reduction of this per contract rate.\7\ In addition, the
Exchange charges a lower per contract rate to Market Makers that
participate in one of the Prepayment Programs or that post monthly
volume greater than 0.85% of total ICADV.
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    \6\ See Fee Schedule, supra note 4. The volume thresholds are
based on an NYSE Amex Options Market Maker's volume transacted
Electronically as a percentage of total industry Customer equity and
ETF options volumes (``ICADV'') as reported by the Options Clearing
Corporation (the ``OCC''). Total ICADV is comprised of those equity
and ETF contracts that clear in the Customer account type at OCC and
does not include contracts that clear in either the Firm or Market
Maker account type at OCC or contracts overlying security other than
an equity or ETF security. See OCC Monthly Statistics Reports,
available here, http://www.theocc.com/webapps/monthly-volume-reports.
    \7\ In calculating an NYSE Amex Options Market Maker Electronic
volumes, the Exchange excludes any volumes attributable to Mini
Options, QCC trades, CUBE Auctions, and Strategy Execution Fee Caps,
as these transactions are subject to separate pricing described in
Fee Schedule Sections I.B., I.F., I.G., and I.J, respectively. See
Fee Schedule, Section I.C, supra note 4.
---------------------------------------------------------------------------

    Effective January 3, 2017, the Exchange proposes to modify the
qualification thresholds and associated transaction fees for all Marker
Makers as follows (with new rates/thresholds underlined and deleted
rates/thresholds in brackets):
* * * * *

----------------------------------------------------------------------------------------------------------------
                                                                                Rate per contract if
                                                                                monthly volume from
                                                                                posted volume is more
                                                                                than .85% of total
                              Market maker electronic monthly volume                      ICADV or for any NYSE
            Tier                     as a percentage of ICADV         Rate per contract     Amex Market Maker
                                                                                participating in a
                                                                                prepayment program
                                                                                pursuant to Section
                                                                                I.D.
----------------------------------------------------------------------------------------------------------------
1...........................  0.00% to [0.10%]0.15%.................              $0.25             [$0.20]$0.23
2...........................  [>0.10%]0.15% to 0.60%.....              $0.22             [$0.17]$0.18
3...........................  >0.60% to [1.25%]1.10%................       [$0.12]$0.14             [$0.07]$0.08

4...........................  [>1.25% to 1.40%]1.10% to                $0.10                    $0.05
                               1.45%.
5...........................  [>1.40% to 1.75%]1.45% to                $0.07             [$0.02]$0.04
                               1.80%.
6...........................  [>1.75%]1.80%..............              $0.05             [$0.00]$0.02
----------------------------------------------------------------------------------------------------------------

    The proposed changes are designed to incent Market Makers to
electronically trade a more meaningful percentage of ICADV by
increasing the percentage of ICADV required for Tiers 2, 5 and 6, and
to make Tier 4 more achievable by lowering the percentage of ICADV
required.\8\ In connection with the adjustment to the qualification
thresholds for the various tiers, the Exchange proposes to increase the
per contract rate for Tier 3, which is designed to both offset the
lower threshold to Tier 4 and to encourage participants to achieve Tier
4. For those participants that achieve Tier 4, as modified, the per
contract rate differential remains the same (i.e., $0.05 per contract
for those who achieve 0.85% of IADV from Posted Volume, or participate
in a Prepayment Program; as compared to $0.10 per contract for anyone
else that achieves Tier 4), which is designed to encourage Market
Makers to qualify for the more easily achievable Tier 4 and to qualify
for the enhanced rates by enrolling in a prepayment program or meeting
the Posted Volume criterion. In addition, the Exchange proposes to
increase the discounted per contract rates to Market Makers that
participate in one of the Prepayment Programs or that trade more than
0.85% of total ICADV based on posted volume. The Exchange believes the
proposed modifications would encourage Market Makers to execute more
volume on the Exchange and provide additional incentive to enroll in
one of the Prepayment Programs, including as modified herein.
---------------------------------------------------------------------------

    \8\ See proposed Fee Schedule, Section I.C.
---------------------------------------------------------------------------

Prepayment Program
    In January 2015, the Exchange introduced a two Prepayment
Programs--for a 1- or 3-year term--to allow Market Makers to prepay a
portion of the charges incurred for transactions executed on the
Exchange.\9\ Although the 3-Year Prepayment Program, now in its final
year, is closed to new entrants, the Exchange proposes to modify the
terms of the 1 Year Prepayment Program, as well as to offer a new
prepay option to be available throughout 2017.\10\ The proposed
modifications to the Prepayment Program are designed to encourage
broader participation by Market Maker firms.
---------------------------------------------------------------------------

    \9\ See Exchange Act Release No. 74086 (January 16, 2015) 80 FR
3701 (January 23, 2015) (SR-NYSEMKT-2015-4). See also Fee Schedule,
Section I.D (Prepayment Programs), supra at note 4 (describing the
1- and 3-Year Prepayment Programs, including requisite timelines for
committing and prepaying as well as various conditions to opt out of
the 3-Year Prepayment Program).
    \10\ See proposed Fee Schedule, Section I.D (Prepayment
Programs) (modifying the description of the 3 Year Prepayment
Program to make clear that it is closed to new participants, that
one year remains for any Market Maker that enrolled in 2015, that
participants retain the ability to opt out by the specified date,
including because there are fewer than 4 participants in the 1- or
3-Year programs as of January 3, 2017, as well as to update the
description of the program to reflect the current and upcoming
calendar year). The Exchange does not propose to modify the ($3
million) amount of, or deadline (of January 31, 2017) for, the final
payment in connection with the 3 Year Prepayment Program.
---------------------------------------------------------------------------

    The Exchange proposes to reduce the prepayment amount for the 1
Year Prepayment Program from $4 million to $3 million, which would
align with the final prepayment for participants in the 3 Year
Prepayment Program. The Exchange does not propose to alter any other
aspects of the 1 Year Prepayment Program.\11\ Participants in the 1
Year Prepayment Program would continue to qualify its Affiliated (or
Appointed) OFP to be eligible to receive the enhanced credit(s) under
the Amex Customer Engagement Program.\12\ To enroll in the modified 1
Year Prepayment Program, a Market Maker would have until December 30,
2016 to notify the Exchange, and until January 31, 2017 to remit the $3
million prepayment.\13\
---------------------------------------------------------------------------

    \11\ See proposed Fee Schedule, Section I.C. (providing that the
Exchange will apply the prepayment as a credit against charges
incurred under Section I.C., I.G., or III.A. of the Fee Schedule
and, once the prepayment credit has been exhausted, the Exchange
will invoice the NYSE Amex Options Market Maker at the appropriate
rates, and noting that if the NYSE Amex Options Market Maker does
not conduct sufficient activity to exhaust the entirety of their
prepayment credit within the calendar year, there will be no refunds
issued for any unused portion of their prepayment credit).
    \12\ See Fee Schedule, Section I.E. (Amex Customer Engagement
(``ACE'') Program--Standard Options).
    \13\ See proposed Fee Schedule, Section I.D (Prepayment
Programs) (modifying the description of the 1Year Prepayment
Programs, including reducing the prepayment amount and updating the
deadlines to reflect the current and upcoming calendar year). As is
the case today, Market Makers would have until the last business day
of 2016 to notify the Exchange of their commitment to the Program by
sending an email the Exchange at<EMAIL_ADDRESS>---------------------------------------------------------------------------

    The Exchange is also proposing to offer a new option, the ``Balance
of the Year'' program, which would allow Market Makers to commit to
prepay a portion of their transaction charges for some portion of the
calendar year, for a maximum of three-quarters of the year. The
prepayment amount and payment schedule for the proposed Balance of the
Year Program would be based on the quarter in which the Market Maker
joins, as set forth below:

----------------------------------------------------------------------------------------------------------------
                                             2nd Quarter              3rd Quarter              4th Quarter
----------------------------------------------------------------------------------------------------------------
Prepayment Amount and Payment          $2,475,000, due by       $1,800,000, due by July  $975,000, due by
 Schedule.                              April 28.                31.                      October 31.
----------------------------------------------------------------------------------------------------------------

    Similar to the current 1- and 3-Year Prepayment Programs, a Market
Maker that participates in the Balance of the Year Program would
receive a credit equal to its prepayment amount (i.e., $2,475,000;
$1,800,000; or $975,000, respectively) toward fees it incurs under

Section I.C., I.G., and III.A.\14\ As proposed, Marker Makers that
enroll in the Balance of the Year Program would be required to notify
the Exchange by the last business day before the start of the new
(following) quarter.\15\ Thus, to participate for the last three-
quarters of 2017, notice would have to be given by March 31, 2017--the
last business day of the first quarter.
---------------------------------------------------------------------------

    \14\ See proposed Fee Schedule, Section I.D (Prepayment
Programs). Similarly, just as with the 1- and 3-Year Prepayment
Programs, the Exchange would apply the prepayment as a credit
against charges incurred under Section I.C., I.G., or III.A. of the
Fee Schedule. Once the prepayment credit has been exhausted, the
Exchange would invoice the NYSE Amex Options Market Maker at the
appropriate rates. In the event that a NYSE Amex Options Market
Maker does not conduct sufficient activity to exhaust the entirety
of their prepayment credit within the calendar year, there would be
no refunds issued for any unused portion of their prepayment credit.
See id.
    \15\ See id. (providing that Market Makers would be required to
notify the Exchange of their commitment to the Program by sending an
email the Exchange at optionsbilling@nyse.com).
---------------------------------------------------------------------------

    The Exchange believes the proposed Balance of the Year Program
would allow a Market Maker that had not committed to the 1- or 3-Year
Prepayment Program the option to enroll at a later date, for a shorter
duration, and to nonetheless receive the benefits of participating in
the Prepayment Program for the duration of their commitment.
Specifically, during the period of their participation, Market Makers
enrolled in the Balance of the Year Program would be entitled to
qualify for the reduced per contract Sliding Scale rates (see supra
note 8), and a discount on Rights Fees.\16\ The Exchange likewise
proposes to offer participants in the Balance of the Year Program
enhanced ACE credits in the same amount as those available to
participants in the 1 Year Prepayment Program, and to modify the Fee
Schedule accordingly.\17\ Although the prepay commitment rates for
partial Balance of the Year participation is not proportional to the
time left in the year (i.e., the later in the year a Market Maker
joins, the higher his prepayment amount relative to the annual cost),
the Exchange believes this cost structure would incentivize interested
Market Makers to commit to the Program earlier in the year.
---------------------------------------------------------------------------

    \16\ See Fee Schedule, Section III.C (e-Specialist, DOMM and
Specialist Monthly Rights Fees) (describing Rights Fee Discount
based on ACE tier achieved). See also infra, note 17.
    \17\ See proposed Fee Schedule, Section I.E. (modifying ACE
Program to provide for ``1 Year/Balance of the Year Program Enhanced
Customer Volume Credits'' in the same amount).
---------------------------------------------------------------------------

    The Exchange is not proposing any other fee changes at this time.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\18\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\19\ 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.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed modifications to the
Sliding Scale are reasonable, equitable and not unfairly discriminatory
for a number of reasons. First, the Sliding Scale is available to all
NYSE Amex Options Market Makers and is based on the amount of business
transacted on--and is designed to attract greater volume to--the
Exchange. The proposed adjustments are designed to encourage Market
Makers to commit to directing their order flow to the Exchange, which
would increase volume and liquidity, to the benefit of all market
participants by providing more trading opportunities and tighter
spreads. Further, the proposed Sliding Scale thresholds and rates are
competitive with fees charged by other exchanges and are designed to
attract (and compete for) order flow to the Exchange, which provides a
greater opportunity for trading by all market participants.\20\
---------------------------------------------------------------------------

    \20\ See e.g., CBOE fee schedule, available here, http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf (the
``Liquidity Provider Sliding Scale''); and MIAX fee schedule,
available here, http://www.miaxoptions.com/sites/default/files/MIAX_Options_Fee_Schedule_11012016B.pdf (``Market Maker Sliding
Scale'').
---------------------------------------------------------------------------

    The Exchange proposal to modify the Prepayment Programs, including
by reducing the prepay commitment for the 1 Year Prepayment Program and
adding the Balance of the Year Program, are also reasonable, equitable
and not unfairly discriminatory for the following reasons. First, all
of the Prepayment Programs offered on the Exchange are optional and
Market Makers can elect to participate (or elect not to participate).
In addition, the Exchange believes that reducing the prepay commitment
for all participants in the 1 Year Prepayment Program, as well as
offering Market Makers the flexibility to join at various points in the
year, may encourage broader participation in the Prepayment Programs,
which anticipated greater capital commitment and resulting liquidity on
the Exchange would benefit all market participants (including non-
Market Makers). Moreover, the Exchange notes that other options
exchanges likewise offer Prepayment Programs to market makers that may
be joined after the start of the year. For example, under CBOE's
Liquidity Provider Sliding Scale, a CBOE market maker may be eligible
for the lower rates associated with certain tiers by prepaying $2.4
million in fees on an annual basis, or prepaying $200,000 in fees on a
monthly basis.\21\ The Exchange also notes that, similar to the Sliding
Scale, the Prepayment Program is designed to incent Market Makers to
commit to directing their order flow to the Exchange, which would
benefit all market participants by expanding liquidity, providing more
trading opportunities and tighter spreads, even to those market
participants that are not eligible for the Programs. Thus, the Exchange
believes the Prepayment Program, as modified, is reasonable, equitable
and not unfairly discriminatory to others.
---------------------------------------------------------------------------

    \21\ CBOE fee schedule, at fn 10 (providing that a market maker
may be permitted to pay a pro-rated amount of the $2.4 million if,
for example, they join the program mid-year), supra note 20.
---------------------------------------------------------------------------

    Finally, the Exchange 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,\22\ 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. The Exchange believes that the proposed
changes relating to the Sliding Scale and the Prepayment Program may
increase both intermarket and intramarket competition by incenting
participants to direct their orders to the Exchange, which would
enhance the quality of quoting and may increase the volume of contracts
traded on the Exchange. To the extent that there is an additional
competitive burden on non-NYSE Amex Market Makers, the Exchange
believes that this is appropriate because the proposal should incent
market participants to direct additional order flow to the Exchange,
and thus provide additional liquidity that enhances the quality of its
markets and increases the volume of contracts traded here. To the
extent that this purpose is achieved, all of the Exchange's market
participants should

benefit from the improved market liquidity. Enhanced market quality and
increased transaction volume that results from the anticipated increase
in order flow directed to the Exchange will benefit all market
participants and improve competition on the Exchange.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Given the robust competition for volume among options markets, many
of which offer the same products, implementing programs to attract
order flow similar to the ones being proposed in this filing, are
consistent with the above-mentioned goals of the Act. 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) \23\ of the Act and subparagraph (f)(2) of Rule
19b-4 \24\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(3)(A).
    \24\ 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) \25\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \25\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEMKT-2016-127 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-NYSEMKT-2016-127. 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-NYSEMKT-2016-127 and should
be submitted on or before January 31, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
---------------------------------------------------------------------------

    \26\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-00221 Filed 1-9-17; 8:45 am]
 BILLING CODE 8011-01-P