[Federal Register Volume 78, Number 190 (Tuesday, October 1, 2013)]
[Notices]
[Pages 60358-60360]
[FR Doc No: 2013-23902]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70504; File No. SR-NYSEArca-2013-93]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE
Arca Options Fee Schedule To Include an Additional Market Maker Monthly
Posting Credit Tier

September 25, 2013.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on September 17, 2013, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items

have been prepared by the self-regulatory organization. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Options Fee Schedule
(``Fee Schedule'') to include an additional Market Maker monthly
posting credit tier. The Exchange proposes to implement the fee change
effective October 1, 2013. The text of the proposed rule change is
available on the Exchange's Web site at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to include an
additional Market Maker monthly posting credit tier. The Exchange
proposes to implement the fee change effective October 1, 2013.
    The Exchange currently offers two Market Maker monthly posting
credit tiers applicable to posted electronic Market Maker executions in
Penny Pilot issues and SPY, as follows:

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
            Tier                     Qualification basis           Credit applied to        Credit applied to
                                                                         posted                   posted
                               (average electronic executions   electronic market maker  electronic market maker
                                           per day)
                                                                  executions in penny       executions in SPY
                                                                         pilot
                                                                  issues (except SPY)    .......................

----------------------------------------------------------------------------------------------------------------
Base........................  ...............  ...............                  ($0.32)                  ($0.32)
Super Tier..................  80,000           200,000                          ($0.37)                  ($0.39)
                               Contracts from   Contracts
                               Market Maker     Combined from
                               Posted Orders    all orders in
                               in All Issues,   Penny Pilot
                               or.              Issues, all
                                                account types,
                                                with at least
                                                100,000
                                                Contracts from
                                                Posted Orders
                                                in Penny Pilot
                                                Issues\4\.
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    The Exchange proposes to reduce the base credit from $0.32 to $0.28
for both Penny Pilot issues and SPY and create a new Select Tier that
would offer a credit of $0.32 for both Penny Pilot issues and SPY if
the Market Maker has average electronic executions per day of 30,000
contracts from Market Maker posted orders in all issues. Credits for
the Super Tier would remain the same. The resulting tiers and pricing
would be as follows:
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    \4\ This calculation includes transaction volume from the Market
Maker's affiliates.

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
            Tier                     Qualification basis           Credit applied to        Credit applied to
                                                                         posted                   posted
                               (average electronic executions   electronic market maker  electronic market maker
                                           per day)
                                                                  executions in penny       executions in SPY
                                                                         pilot
                                                                  issues (except SPY)

----------------------------------------------------------------------------------------------------------------
Base........................  ...............  ...............                  ($0.28)                  ($0.28)
Select Tier.................  30,000           ...............                  ($0.32)                  ($0.32)
                               Contracts from
                               Market Maker
                               Posted Orders
                               in All Issues.
Super Tier..................  80,000           200,000                          ($0.37)                  ($0.39)
                               Contracts from   Contracts
                               Market Maker     Combined from
                               Posted Orders    all orders in
                               in All Issues,   Penny Pilot
                               or.              Issues, all
                                                account types,
                                                with at least
                                                100,000
                                                Contracts from
                                                Posted Orders
                                                in Penny Pilot
                                                Issues\5\.
----------------------------------------------------------------------------------------------------------------

    The Exchange notes that the proposed change is not otherwise
intended to address any other issues, and the Exchange is not aware of
any problems that OTP Holders and OTP Firms, including Market Makers,
would have in complying with the proposed change.
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    \5\ This calculation includes transaction volume from the Market
Maker's affiliates.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\7\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed change is reasonable
because

reducing the base Market Maker monthly posting credit and adding a new
Select Tier would encourage Market Makers to post greater volumes in
all issues, including non-Penny Pilot issues, in order to qualify for
the Select Tier credit of $0.32. The proposed change is also reasonable
because it is designed to attract higher volumes of Market Maker posted
orders to the Exchange, which would benefit all market participants by
offering greater price discovery, increased transparency, and an
increased opportunity to trade on the Exchange. Encouraging Market
Makers to send higher volumes of orders to the Exchange would also
contribute to the Exchange's depth of book as well as to the top of
book liquidity. The Exchange also believes that the proposed credits
are reasonable because they are within a range of similar credits
available on other option exchanges.\8\
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    \8\ NASDAQ Options Market (``NOM'') credits range from -$0.25 to
-$0.40. Topaz Exchange, LLC (``Topaz'') credits range from -0.30 to
-$0.39.
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    The Exchange believes that the proposed change is equitable and not
unfairly discriminatory because it would apply to all Market Makers on
an equal and non-discriminatory basis. The Exchange further believes
that the proposed change is equitable and not unfairly discriminatory
because it is reasonably related to the value to the Exchange's market
quality associated with higher volumes in Market Maker posted orders,
including both Penny Pilot issues and non-Penny Pilot issues. The
proposed lower credit for Market Makers in the base tier is reasonable
and equitable because it would reasonably ensure that the Exchange will
derive sufficient revenue to continue to fund the higher credits
available under the Select Tier and Super Tier for the benefit of all
market participants.
    Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
    For these reasons, the Exchange believes that the proposal is
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\9\ the Exchange does
not believe that the proposed rule change will impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, the Exchange believes that the proposed
change would continue to 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 will impair the ability of Market Makers or competing
order execution venues to maintain their competitive standing in the
financial markets.
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    \9\ 15 U.S.C. 78f(b)(8).
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    Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive. In such an environment, the Exchange must continually
review, and consider adjusting, its fees and credits to remain
competitive with other exchanges. For the reasons described above, the
Exchange believes that the proposed rule change reflects this
competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2013-93 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2013-93. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2013-93, and should
be submitted on or before October 22, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
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    \13\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2013-23902 Filed 9-30-13; 8:45 am]
BILLING CODE 8011-01-P