[Federal Register Volume 84, Number 120 (Friday, June 21, 2019)]
[Notices]
[Pages 29262-29267]
[FR Doc No: 2019-13115]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86126; File No. SR-NYSENAT-2019-14]

Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its
Schedule of Fees and Rebates

June 17, 2019.
    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 June 3, 2019, NYSE National, Inc. (``NYSE National'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. 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. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its Schedule of Fees and Rebates to
revise the quoting requirements in order for ETP Holders to qualify for
Adding Tier 1, Adding Tier 2 and Adding Tier 3 fees. The Exchange also
proposes non-substantive changes to the presentation of the Adding
Tiers. The proposed rule change is available on the Exchange's website
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 its Schedule of Fees and Rebates
(``Fee Schedule'') to reduce the number of securities in which an ETP
Holder must quote to qualify for Adding Tier 1, Adding Tier 2 and
Adding Tier 3 fees. Specifically, the Exchange proposes to lower the
number of securities in which an ETP Holder must quote to qualify for
Adding Tiers 1-3 by 50 securities across the board. The Exchange also
proposes non-substantive changes to the presentation of the Adding
Tiers on the Fee Schedule. The Exchange proposes to implement the rule
change on June 3, 2019.
Background
    The Exchange operates in a highly competitive market. The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. Specifically, 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.'' \3\
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    \3\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
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    As the Commission itself recognized, the market for trading
services in NMS stocks has become ``more fragmented and competitive.''
\4\ Indeed, equity trading is currently dispersed across 13
exchanges,\5\ 32 alternative trading systems,\6\ and numerous broker-
dealer internalizers and wholesalers. Based on publicly-available
information, no single exchange has more than 18% of the market share
of executed volume of equity trades (whether excluding or including
auction volume).\7\ Therefore, no exchange possesses significant
pricing power in the execution of equity order flow. More specifically,
in May 2019, the Exchange had 1.3% market share of executed volume of
equity trades (excluding auction volume).\8\ The Exchange believes that
the ever-shifting market share among the exchanges from month to month
demonstrates that market participants can shift order flow, or
discontinue to reduce use of certain categories of products, in
response to fee changes. Accordingly, competitive forces constrain the
Exchange's transaction fees, and market participants can readily trade
on competing venues if they deem pricing levels at those other venues
to be more favorable.
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    \4\ See Securities Exchange Act Release No. 51808, 84 FR 5202,
5253 (February 20, 2019) (File No. S7-05-18) (Transaction Fee Pilot
for NMS Stocks Final Rule) (``Transaction Fee Pilot'').
    \5\ See Cboe Global Markets, U.S. Equities Market Volume Summary
(May 31, 2019), available at http://markets.cboe.com/us/equities/market_share/. See generally https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html.
    \6\ See FINRA ATS Transparency Data (May 6, 2019), available at
https://otctransparency.finra.org/otctransparency/AtsIssueData.
Although 54 alternative trading systems were registered with the
Commission as of April 30, 2019, only 32 are currently trading. A
list of alternative trading systems registered with the Commission
is available at https://www.sec.gov/files/data/alternative-trading-system-ats-list/atslist043019.pdf.
    \7\ See Cboe Global Markets U.S. Equities Market Volume Summary
(May 31, 2019), available at http://markets.cboe.com/us/equities/market_share/.
    \8\ See id.
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    The Exchange utilizes a ``taker-maker'' or inverted fee model to
attract orders that provide liquidity at the most competitive prices.
Under the taker-maker model, offering rebates for taking liquidity
increases the likelihood that market participants will send orders to
the Exchange to trade with liquidity providers' orders. This increased
taker order flow provides an incentive for market participants to send
orders that provide liquidity. The Exchange charges fees for order flow
that provides liquidity. These fees are reasonable due

to the additional marketable interest (in part attracted by the
exchange's rebate to remove liquidity) with which those order flow
providers can trade.
    The Exchange sets forth the fees it charges for adding liquidity in
four Adding Tiers that establish minimum quoting or volume requirements
that an ETP Holder must satisfy in order to be eligible for specific
corresponding fees. These quoting and volume requirements are based on
the type of liquidity (i.e., displayed, non-displayed, BBO setting, or
MPL) and the type of security (i.e., whether it is a Tape A, B or C
security). In addition, the Exchange offers two ``step up'' Adding
Tiers that do not have quoting or minimum volume requirements but
require ETP Holders to provide additional incremental liquidity, thus
``stepping up'' their liquidity provision, in order to qualify for
better pricing based on smaller amounts of liquidity than are required
to qualify for Adding Tiers 1-3. The different tiers are designed to
provide an incentive for order flow providers to add liquidity on the
Exchange because the fees are lower for the tiers that have higher
quoting or volume requirements. ETP Holders that do not send order flow
to the Exchange to qualify for the Adding Tier rates would receive the
rates set forth under item A (General Rates) of the Fee Schedule.
    To respond to this competitive environment, the Exchange proposes
to adjust its pricing to reduce the number of securities in which an
ETP Holder must quote in order to qualify for the Adding Tier 1-3 fees.
The Exchange's market share of intraday trading (i.e., excluding
auctions) declined from 1.5% for the month of March 2019 to 1.3% for
the month of May 2019.\9\ The proposed fee change is designed to
attract additional order flow to the Exchange by making it easier to
qualify for the respective tiered rates.
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    \9\ See id.
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Proposed Rule Change
    As described in more detail below, in order to qualify for the
Adding Tiers 1-3 fees, an ETP Holder must be quoting at a price that is
equal to the NBBO a specified percentage of the time, in a specific
number of securities.\10\ The Exchange proposes to lower the number of
securities in which an ETP Holder must quote to qualify for Adding
Tiers 1-3 by 50 securities across the board. Without having a view of
ETP Holder's activity on other markets and off-exchange venues, the
Exchange believes that this reduction in the number of securities would
be significant enough to incentivize market participants to increase
their quoting on the Exchange to meet the new lower requirement, and
thus be eligible for lower fees, and submit additional adding liquidity
to the Exchange.
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    \10\ The Adding Tier 4 volume requirements are currently waived.
See footnote * in the current Fee Schedule. The Exchange proposes no
changes to Adding Tier 4.
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Adding Tier 1
    Under current Adding Tier 1, ETP Holders that add liquidity to the
Exchange in securities with a per share price of $1.00 or more and
that:
    (i) Quote at the NBBO \11\ at least 5% of the time in 1,000 or more
securities on an average daily basis, calculated monthly, and have an
average daily volume (``ADV'') of adding liquidity as a percentage of
US consolidated ADV (``CADV'') of 0.20% or more, or
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    \11\ See footnote ** in the current Fee Schedule.
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    (ii) quote at the NBBO at least 5% of the time in 2,500 or more
securities on an average daily basis, calculated monthly, and have an
ADV of adding liquidity as a percentage of US CADV of 0.10% or more,

would be charged the following fees:

     $0.0008 per share for adding displayed orders in Tape B
and C securities and $0.0011 per share in Tape A securities;
     $0.0008 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0011 per share in Tape A securities;
     $0.0010 per share for adding non-displayed orders in Tape
B and C securities and $0.0013 per share in Tape A securities; and
     $0.0005 per share for MPL orders.
    The Exchange proposes to amend the quoting requirements for both
alternative methods described in (i) and (ii) above to qualify for the
tier by reducing the number of securities in which the ETP Holder must
quote. As proposed, the first alternative would require ETP Holders to
quote at least 5% of the time at the NBBO in 950 (instead of 1,000) or
more securities on an average daily basis, calculated monthly, while
the second would require ETP Holders to quote at least 5% of the time
at the NBBO in 2,450 (instead of 2,500) or more securities on an
average daily basis, calculated monthly. The fees charged under the
Adding Tier 1 would not change.
Adding Tier 2
    Under current Adding Tier 2, ETP Holders that add liquidity to the
Exchange in securities with a per share price of $1.00 or more and that
quote at least 5% of the time at the NBBO in 2000 or more securities on
an average daily basis, calculated monthly, and have an ADV of adding
liquidity as a percentage of US CADV of 0.10% or more, are charged the
following fees:
     $0.0012 per share for adding displayed orders in Tape B
and C securities and $0.0015 per share in Tape A securities;
     $0.0012 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0015 per share in Tape A securities;
     $0.0014 per share for adding non-displayed orders in Tape
B and C securities and $0.0017 per share in Tape A securities; and
     $0.0005 per share for MPL orders, which would remain
unchanged.
    The Exchange proposes to reduce the number of securities in which
the ETP Holder must quote to qualify for the tier, and would require
ETP Holders to quote at least 5% of the time at the NBBO in 1,950
(instead of 2,000) or more securities on an average daily basis,
calculated monthly. The fees charged under the Adding Tier 2 would not
change.
Adding Tier 3
    Under current Adding Tier 3, ETP Holders that add liquidity to the
Exchange in stocks with a per share price of $1.00 or more and that
quote at least 5% of the NBBO in 600 or more securities on an average
daily basis, calculated monthly, are charged the following fees:
     $0.0015 per share for adding displayed orders in Tape B
and C securities and $0.0017 per share in Tape A securities;
     $0.0015 per share for orders that set a new Exchange BBO
in Tape B and C securities and $0.0017 per share in Tape A securities;
     $0.0017 per share for adding non-displayed orders in Tape
B and C securities and $0.0019 per share in Tape A securities; and
     $0.0005 per share for MPL orders, which would remain
unchanged.
    The Exchange proposes to reduce the number of securities in which
the ETP Holder must quote to qualify for the tier by 50, and would
require ETP Holders to quote at least 5% of the NBBO in 550 (instead of
600) or more securities on an average daily basis, calculated monthly.
The fees charged under the Adding Tier 3 would not change.
Application of Proposed Fee Change
    The proposed rule change is designed to provide order flow
providers with an incentive to route liquidity-providing order flow to
the Exchange. As described above, ETP Holders with liquidity-providing
order flow have a

choice of where to send that order flow. The Exchange believes that if
it reduces the requirements to qualify for tiers that have lower
charges, more ETP Holders will choose to route their liquidity-
providing order flow to the Exchange to qualify for those tiers. The
Exchange cannot predict with certainty how many ETP Holders would avail
themselves of this opportunity, but believes that more than 12 ETP
Holders could qualify for these tiers if they so choose.\12\ Additional
liquidity-providing order flow benefits all market participants because
it provides greater execution opportunities on the Exchange.
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    \12\ In the month of May 2019, 12 ETP Holders quoted at least 5%
of the time at the NBBO in at least 10 securities.
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    For example, assume an ETP Holder averages an ADV of 17.5 million
shares of adding liquidity in a month where a billing month of US CADV
is 7 billion, or 0.25% of CADV. If that ETP Holder quotes at least 5%
of the NBBO in 975 securities on an average daily basis, calculated
monthly, that ETP Holder would meet the proposed requirement of at
least 950 securities to qualify for Adding Tier 1. Prior to the
proposed change, that ETP Holder would fall short of the requirement
for Tier 1, and would have instead qualified for Adding Tier 3. With
this proposed change, this ETP Holder would now be eligible for Adding
Tier 1 fees, which, except for MPL Adding fees, are lower than the
Adding Tier 3 fees. The Exchange believes that charging lower fees
would create an incentive for liquidity providers to direct order flow
to the Exchange, which in turn would create additional execution
opportunities for all market participants.
Proposed Non-Substantive Changes
    The Exchange also proposes a non-substantive change to the
presentation of the Adding Tiers under item B (Tiered Rates) of the Fee
Schedule. The Exchange proposes a horizontal presentation similar to
the presentation of the Taking Tiers rather than the current vertical
presentation. The Exchange also proposes to simplify the presentation
by using sub-titles to identify the type of liquidity (i.e., displayed,
non-displayed, BBO setting, and MPL) and then listing the corresponding
fees under each category. The proposed substantive changes described
above would be included in the new presentation of the Tiered Rates.
The proposed changes would appear as follows in the Fee Schedule:

----------------------------------------------------------------------------------------------------------------
                 Tier requirement                                     Adding fees (per share)
----------------------------------------------------------------------------------------------------------------
                                                  Adding Tier 1
----------------------------------------------------------------------------------------------------------------
Either:                                            Displayed liquidity:
    (i) at least 5% of the NBBO ** in 950 or more     --Tapes B and C: $0.0008.
     symbols on an average daily basis,            --Tape A: $0.0011.
     calculated monthly and 0.20% or more Adding   Non-displayed liquidity:
     ADV as a % of US CADV, or                     --Tapes B and C: $0.0010.
    (ii) at least 5% of the NBBO ** in 2,450 or    --Tape A: $0.0013.
     more symbols on an average daily basis,       BBO setting:
     calculated monthly and 0.10% or more Adding
     ADV as a % of US CADV..
                                                      --Tapes B and C: $0.0008.
                                                   --Tape A: $0.0011.
                                                   MPL:
                                                   --All Tapes: $0.0005.
----------------------------------------------------------------------------------------------------------------
                                                  Adding Tier 2
----------------------------------------------------------------------------------------------------------------
At least 5% of the NBBO ** in 1,950 or more        Displayed liquidity:
 symbols on an average daily basis, calculated     --Tapes B and C: $0.0012.
 monthly and 0.10% or more Adding ADV as a % of    --Tape A: $0.0015.
 US CADV.
                                                   Non-displayed liquidity:
                                                   --Tapes B and C: $0.0014.
                                                   --Tape A: $0.0017.
                                                   BBO Setting:
                                                   --Tapes B and C: $0.0012.
                                                   --Tape A: $0.0015.
                                                   MPL:
                                                   --All Tapes: $0.0005.
----------------------------------------------------------------------------------------------------------------
                                                  Adding Tier 3
----------------------------------------------------------------------------------------------------------------
At least 5% of the NBBO ** in 550 or more symbols  Displayed liquidity:
 on an average daily basis, calculated monthly.    --Tapes B and C: $0.0015.
                                                   --Tape A: $0.0017.
                                                   Non-displayed liquidity:
                                                   --Tapes B and C: $0.0017.
                                                   --Tape A: $0.0019.
                                                   BBO Setting:
                                                   --Tapes B and C: $0.0015.
                                                   --Tape A: $0.0017.
                                                   MPL:
                                                   --All Tapes: $0.0005.
----------------------------------------------------------------------------------------------------------------

                                                 Adding Tier 4 *
----------------------------------------------------------------------------------------------------------------
0.015% or more Adding ADV as a % of US CADV......  Displayed liquidity:
                                                   --Tapes B and C: $0.0023.
                                                   --Tape A: $0.0025.
                                                   Non-displayed liquidity:
                                                   --Tapes B and C: $0.0025.
                                                   --Tape A: $0.0027.
                                                   BBO Setting:
                                                   --Tapes B and C: $0.0021.
                                                   --Tape A: $0.0023.
                                                   MPL:
                                                   --All Tapes: $0.0005.
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                                              Step Up Adding Tier 1
----------------------------------------------------------------------------------------------------------------
0.07% or more Adding ADV as a % of US CADV over    Displayed liquidity:
 the ETP Holder's Adding ADV as a % of US CADV in  --Tapes B and C: $0.0012.
 November 2018.                                    --Tape A: $0.0015.
                                                   Non-displayed liquidity:
                                                   --Tapes B and C: $0.0014.
                                                   --Tape A: $0.0017.
                                                   BBO Setting:
                                                   --Tape B and C: $0.0012.
                                                   --Tape A: $0.0015.
                                                   MPL:
                                                   --All Tapes: $0.0005.
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                                              Step Up Adding Tier 2
----------------------------------------------------------------------------------------------------------------
0.04% or more Adding ADV as a % of US CADV over    Displayed liquidity:
 the ETP Holder's Adding ADV as a % of US CADV in  --Tape B and C: $0.0015.
 November 2018.                                    --Tape A: $0.0018.
                                                   Non-displayed liquidity:
                                                   --Tapes B and C: $0.0017.
                                                   --Tape A: $0.0020.
                                                   BBO Setting:
                                                   --Tapes B and C: $0.0015.
                                                   --Tape A: $0.0018.
                                                   MPL:
                                                   --All Tapes: $0.0005.
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    The Exchange believes the proposed change will add clarity to the
Exchange's rules by making the Fee Schedule easier to read. Other than
the changes to the Adding Tier quoting qualifications described above,
the Exchange proposes no other substantive changes to the Adding Tiers.
    The proposed changes are not otherwise intended to address any
other issues, and the Exchange is not aware of any problems that ETP
Holders would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\13\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\14\ 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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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(4) & (5).
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    The Exchange believes that lowering the number of securities in
which ETP Holders are required to quote at least 5% of the time at the
NBBO on an average daily basis, calculated monthly, for Adding Tiers 1-
3 provides for the equitable allocation of reasonable dues and fees and
is not unfairly discriminatory for the following reasons.
    As noted above, the Exchange operates in a highly competitive
market. The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. Specifically, 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.'' \15\
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    \15\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
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    As the Commission itself recognized, the market for trading
services in NMS stocks has become ``more fragmented and competitive.''
\16\ Indeed, equity trading is currently dispersed across 13
exchanges,\17\ 32 alternative trading systems,\18\ and numerous broker-
dealer

internalizers and wholesalers. Based on publicly-available information,
no single exchange has more than 18% of the market share of executed
volume of equity trades (whether including or excluding auction
volume).\19\ Therefore, no exchange possesses significant pricing power
in the execution of equity order flow. More specifically, in May 2019,
the Exchange had 1.3% market share of executed volume of equity trades
(excluding auction volume).\20\ The Exchange believes that the ever-
shifting market share among the exchanges from month to month
demonstrates that market participants can shift order flow, or
discontinue or reduce use of certain categories of products, in
response to fee changes. Accordingly, competitive forces constrain
exchange transaction fees.
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    \16\ See Transaction Fee Pilot, 84 FR at 5253.
    \17\ See Cboe Global Markets, U.S. Equities Market Volume
Summary (May 31, 2019), available at http://markets.cboe.com/us/equities/market_share/. See generally https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml.html.
    \18\ See FINRA ATS Transparency Data (May 6, 2019), available at
https://otctransparency.finra.org/otctransparency/AtsIssueData.
Although 54 alternative trading systems were registered with the
Commission as of April 30, 2019, only 32 are currently trading. A
list of alternative trading systems registered with the Commission
is available at https://www.sec.gov/files/data/alternative-trading-system-ats-list/atslist043019.pdf.
    \19\ See Cboe Global Markets U.S. Equities Market Volume Summary
(May 31, 2019), available at http://markets.cboe.com/us/equities/market_share/.
    \20\ See id.
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    The Exchange believes the proposed change is equitable and not
unfairly discriminatory because it would continue to encourage ETP
Holders to send orders to the Exchange, thereby contributing to robust
levels of liquidity, which benefits all market participants. Further,
the Exchange believes that, for the reasons discussed above, lowering
the quoting requirement would make it easier for liquidity providers to
qualify for the fees, thereby encouraging submission of additional
liquidity to the Exchange. The proposed change will thereby encourage
the submission of additional liquidity to a national securities
exchange, thus promoting price discovery and transparency and enhancing
order execution opportunities for ETP Holders from the substantial
amounts of liquidity present on the Exchange. All ETP Holders would
benefit from the greater amounts of liquidity that will be present on
the Exchange, which would provide greater execution opportunities.
    The Exchange notes that there are currently four (4) firms
qualifying for the combined Adding Tiers 1-4 and that, based on current
participation on the Exchange, no additional firms would initially
qualify with the lower requirements. Without having a view of an ETP
Holder's activity on other markets and off-exchange venues, the
Exchange believes the proposed lower quoting requirement would provide
an incentive for market participants to increase their quoting to meet
the new lower requirement and submit additional adding liquidity to the
Exchange. In addition, based on the profile of liquidity-providing
firms generally, the Exchange believes that more than twelve (12) firms
could qualify for these tiers if they choose to direct order flow to,
and increase quoting on, the Exchange.
    Moreover, the proposed change is equitable and not unfairly
discriminatory because all qualifying ETP Holders that add liquidity to
the Exchange and quote at the NBBO in each tier would be eligible for
the fee by satisfying the lowered quoting thresholds, and because the
lower thresholds would apply equally to all similarly situated ETP
Holders. The Exchange further believes that the proposed changes would
not permit unfair discrimination among ETP Holders because the
different tiered rates are available equally to all ETP Holders. As
described above, in today's competitive marketplace, order flow
providers have a choice of where to direct liquidity-providing order
flow, and while only four ETP Holders have qualified to date for these
rates, the Exchange believes there are additional ETP Holders that
could qualify if they chose to direct their order flow to the Exchange.
    The Exchange also believes that the proposed non-substantive
changes to the Adding Tier presentation would not be inconsistent with
the public interest and the protection of investors because investors
will not be harmed and in fact would benefit from increased clarity and
transparency, thereby reducing potential confusion.
    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 the foregoing 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,\21\ the Exchange
believes that the proposed rule change would not 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 changes would encourage the submission of additional
liquidity to a public exchange by making it easier for liquidity
providers to qualify for the Adding Tier 1-3 fees, thereby increasing
the likelihood that market participants will send orders to the
Exchange to trade with the liquidity providers' orders and thus
promoting market depth, price discovery and transparency and enhancing
order execution opportunities for ETP Holders. As a result, the
Exchange believes that the proposed change furthers the Commission's
goal in adopting Regulation NMS of fostering competition among orders,
which promotes ``more efficient pricing of individual stocks for all
types of orders, large and small.'' \22\
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    \21\ 15 U.S.C. 78f(b)(8).
    \22\ Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
---------------------------------------------------------------------------

    Intramarket Competition. The proposed change is designed to attract
additional order flow to the Exchange by reducing the number of
securities that an ETP Permit holder is required to quote for Adding
Tiers 1-3. Greater liquidity benefits all market participants on the
Exchange by providing more trading opportunities and encourages ETP
Holders to send orders, thereby contributing to robust levels of
liquidity, which benefits all market participants. The proposed reduced
quoting requirement would be available to all similarly-situated market
participants, and, as such, the proposed change would not impose a
disparate burden on competition among market participants on the
Exchange.
    Intermarket Competition. The Exchange operates in a highly
competitive market in which market participants can readily choose to
send their orders to other exchange and off-exchange venues if they
deem fee levels at those other venues to be more favorable. The
Exchange notes that Exchange's market share of intraday trading
(excluding auctions) declined from 1.5% for the month of March 2019 to
1.3% for the month of May 2019.\23\ In such an environment, the
Exchange must continually adjust its fees and rebates to remain
competitive with other exchanges and with off-exchange venues. Because
competitors are free to modify their own fees and credits in response,
and because market participants may readily adjust their order routing
practices, the Exchange does not believe its proposed fee change can
impose any burden on competition.
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    \23\ See note 9, supra.
---------------------------------------------------------------------------

    The Exchange believes that the proposed change could promote
competition between the Exchange and other execution venues, including
those that currently offer similar order types and comparable
transaction pricing, by encouraging additional orders to be sent to the
Exchange for execution.

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) \24\ of the Act and subparagraph (f)(2) of Rule
19b-4 \25\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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    \24\ 15 U.S.C. 78s(b)(3)(A).
    \25\ 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) \26\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \26\ 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-NYSENAT-2019-14 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-NYSENAT-2019-14. 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 (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 website 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 offices of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSENAT-2019-14, and should be submitted
on or before July 12, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
---------------------------------------------------------------------------

    \27\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019-13115 Filed 6-20-19; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 31 (Wednesday, February 14, 2018)]
[Notices]
[Pages 6673-6674]
[FR Doc No: 2018-03070]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2014-0104; FMCSA-2012-0322; FMCSA-2012-0154; FMCSA-
2015-0326; FMCSA-2013-0122; FMCSA-2013-0123; FMCSA-2015-0329]

Qualification of Drivers; Exemption Applications; Hearing

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of renewal of exemptions; request for comments.

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SUMMARY: FMCSA announces its decision to renew exemptions for 11
individuals from the hearing requirement in the Federal Motor Carrier
Safety Regulations (FMCSRs) for interstate commercial motor vehicle
(CMV) drivers. The exemptions enable these hard of hearing and deaf
individuals to continue to operate CMVs in interstate commerce.

DATES: Each group of renewed exemptions were applicable on the dates
stated in the discussions below and will expire on the dates stated in
the discussions below. Comments must be received on or before March 16,
2018.

FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief,
Medical Programs Division,<PHONE_NUMBER>, [email protected], FMCSA,
Department of Transportation, 1200 New Jersey Avenue SE, Room W64-224,
Washington, DC 20590-0001. Office hours are from 8:30 a.m. to 5 p.m.,
e.t., Monday through Friday, except Federal holidays. If you have
questions regarding viewing or submitting material to the docket,
contact Docket Services, telephone<PHONE_NUMBER>.

ADDRESSES: You may submit comments bearing the Federal Docket
Management System (FDMS) Docket No. FMCSA-2014-0104; FMCSA-2012-0322;
FMCSA-2012-0154; FMCSA-2015-0326; FMCSA-2013-0122; FMCSA-2013-0123;
FMCSA-2015-0329. using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
     Mail: Docket Management Facility; U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery: West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m.,
e.t., Monday through Friday, except Federal Holidays.
     Fax: 1-202-493-2251.
    Instructions: Each submission must include the Agency name and the
docket number(s) for this notice. Note that all comments received will
be posted without change to http://www.regulations.gov, including any
personal information provided. Please see the Privacy Act heading below
for further information.
    Docket: For access to the docket to read background documents or
comments, go to http://www.regulations.gov at any time or Room W12-140
on the ground level of the West Building, 1200 New Jersey Avenue SE,
Washington, DC, between 9 a.m. and 5 p.m., e.t., Monday through Friday,
except Federal holidays. The FDMS is available 24 hours each day, 365
days each year. If you want acknowledgment that we received your
comments, please include a self-addressed, stamped envelope or postcard
or print the acknowledgement page that appears after submitting
comments online.
    Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits
comments from the public to better inform its rulemaking process. DOT
posts these comments, without edit, including any personal information
the commenter provides, to http://www.regulations.gov, as described in
the system of records notice (DOT/ALL-14 FDMS), which can be reviewed
at http://www.dot.gov/privacy.

I. Background

    Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption
for five years if it finds ``such exemption would likely achieve a
level of safety that is equivalent to or greater than the level that
would be achieved absent such exemption.'' The statute also allows the
Agency to renew exemptions at the end of the five-year period. FMCSA
grants exemptions from the FMCSRs for a two-year period to align with
the maximum duration of a driver's medical certification.
    The physical qualification standard for drivers regarding hearing
found in 49 CFR 391.41(b)(11) states that a person is physically
qualified to driver a CMV if that person first perceives a forced
whispered voice in the better ear at not less than 5 feet with or
without the use of a hearing aid or, if tested by use of an audiometric
device, does not have an average hearing loss in the better ear greater
than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a
hearing aid when the audiometric device is calibrated to American
National Standard (formerly ASA Standard) Z24.5--1951.
    49 CFR 391.41(b)(11) was adopted in 1970, with a revision in 1971
to allow drivers to be qualified under this standard while wearing a
hearing aid, 35 FR 6458, 6463 (April 22, 1970) and 36 FR 12857 (July 3,
1971).
    The 11 individuals listed in this notice have requested renewal of
their exemptions from the hearing standard in 49 CFR 391.41(b)(11), in
accordance with FMCSA procedures. Accordingly, FMCSA has evaluated
these applications for renewal on their merits and decided to extend
each exemption for a renewable two-year period.

II. Request for Comments

    Interested parties or organizations possessing information that
would otherwise show that any, or all, of these drivers are not
currently achieving the statutory level of safety should immediately
notify FMCSA. The Agency will evaluate any adverse evidence submitted
and, if safety is being compromised or if continuation of the exemption
would not be consistent with the goals and objectives of 49 U.S.C.
31136(e) and 31315, FMCSA will take immediate steps to revoke the
exemption of a driver.

III. Basis for Renewing Exemptions

    In accordance with 49 U.S.C. 31136(e) and 31315, each of the 11
applicants has satisfied the renewal conditions for obtaining an
exemption from the hearing requirement. The 11 drivers in this notice
remain in good standing with the Agency. In addition, for Commercial
Driver's License (CDL) holders, the Commercial Driver's License
Information System (CDLIS) and the Motor Carrier Management Information
System (MCMIS) are searched for crash and violation data. For non-CDL
holders, the Agency reviews the driving records from the State Driver's
Licensing Agency (SDLA). These factors provide an adequate basis for
predicting each driver's ability to continue to safely operate a CMV in
interstate commerce. Therefore, FMCSA concludes that extending the
exemption for each of these drivers for a period of two years is likely
to achieve a level of safety equal to that existing without the
exemption.
    In accordance with 49 U.S.C. 31136(e) and 31315, the following
groups of drivers received renewed exemptions in the month of January
and are discussed below.
    As of January 6, 2018, and in accordance with 49 U.S.C. 31136(e)
and 31315, the following 3 individuals have satisfied the renewal
conditions for obtaining an exemption from the hearing requirement in
the FMCSRs for

interstate CMV drivers: John Brown (MN), Jerry Doose (MN); and Donald
Howton (WI).
    The drivers were included in docket numbers FMCSA-2015-0326; and
FMCSA-2015-0329. Their exemptions are applicable as of January 6, 2018,
and will expire on January 6, 2020.
    As of January 14, 2018, and in accordance with 49 U.S.C. 31136(e)
and 31315, the following 8 individuals have satisfied the renewal
conditions for obtaining an exemption from the hearing requirement in
the FMCSRs for interstate CMV drivers:

Canoyer, Geoffery (MN)
Nelson DeLeon (FL)
Jerry Ferguson (TX)
Sue Gregory (UT)
William Larson (NC)
James Queen (TX)
Morris Townsend (NC)
Charles Wirick (MD)

    The drivers were included in docket numbers FMCSA-2014-0104; FMCSA-
2012-0322; FMCSA-2012-0154; FMCSA-2013-0122; FMCSA-2013-0123. Their
exemptions are applicable as of January 14, 2018, and will expire on
January 14, 2020.

Conditions and Requirements

    The exemptions are extended subject to the following conditions:
(1) Each driver must report any crashes or accidents as defined in 49
CFR 390.5; and (2) report all citations and convictions for
disqualifying offenses under 49 CFR part 383 and 49 CFR 391 to FMCSA;
and (3) each driver prohibited from operating a motorcoach or bus with
passengers in interstate commerce. The driver must also have a copy of
the exemption when driving, for presentation to a duly authorized
Federal, State, or local enforcement official. In addition, the
exemption does not exempt the individual from meeting the applicable
CDL testing requirements. Each exemption will be valid for two years
unless rescinded earlier by FMCSA. The exemption will be rescinded if:
(1) The person fails to comply with the terms and conditions of the
exemption; (2) the exemption has resulted in a lower level of safety
than was maintained before it was granted; or (3) continuation of the
exemption would not be consistent with the goals and objectives of 49
U.S.C. 31136(e) and 31315.

IV. Preemption

    During the period the exemption is in effect, no State shall
enforce any law or regulation that conflicts with this exemption with
respect to a person operating under the exemption.

V. Conclusion

    Based upon its evaluation of the 11 exemption applications, FMCSA
renews the exemptions of the aforementioned drivers from the hearing
requirement in 49 CFR 391.41 (b)(11). In accordance with 49 U.S.C.
31136(e) and 31315, each exemption will be valid for two years unless
revoked earlier by FMCSA.

    Issued on: February 7, 2018.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2018-03070 Filed 2-13-18; 8:45 am]
 BILLING CODE 4910-EX-P


[Federal Register Volume 87, Number 67 (Thursday, April 7, 2022)]
[Notices]
[Pages 20475-20479]
[FR Doc No: 2022-07340]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94573; File No. SR-Phlx-2022-14]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 7,
Section 4 of the Pricing Schedule

April 1, 2022.
    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 March 22, 2022, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78a.
    \2\ 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 amend Phlx's Pricing Schedule at Options
7, Section 4, ``Multiply Listed Options Fees (Includes options
overlying equities, ETFs, ETNs and indexes which are Multiply Listed)
(Excludes SPY).''
    Additionally, the Exchange proposes to make a technical amendment
and add descriptions of three additional terms within Options 7,
Section 1, General Provisions.
    The Exchange originally filed SR-Phlx-2022-08 on March 1, 2022. On
March 10, 2022, the Exchange withdrew SR-Phlx-2022-08 and submitted SR-
Phlx-2022-12. On March 22, 2022, the Exchange withdrew SR-Phlx-2022-12
and submitted this filing.
    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/phlx/rules, 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 Exchange 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 Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    Phlx proposes to amend its Pricing Schedule within Options 7,
Section 4, ``Multiply Listed Options Fees (Includes options overlying
equities, ETFs, ETNs and indexes which are Multiply Listed) (Excludes
SPY).'' Specifically, Phlx proposes to decrease the Professional \3\
Floor \4\ Options Transaction Charges \5\ in multiply-listed Penny and
non-Penny Symbols. Additionally, the Exchange proposes amendments to
Options 7, Section 1, General Provisions. Each change is described
below.
---------------------------------------------------------------------------

    \3\ The term ``Professional'' applies to transactions for the
accounts of Professionals, as defined in Options 1, Section 1(b)(45)
means any person or entity that (i) is not a broker or dealer in
securities, and (ii) places more than 390 orders in listed options
per day on average during a calendar month for its own beneficial
account(s). See Phlx's Pricing Schedule at Options 7, Section 1(c).
    \4\ The term ``floor transaction'' is a transaction that is
effected in open outcry on the Exchange's Trading Floor. See Phlx's
Pricing Schedule at Options 7, Section 1(c).
    \5\ Floor transaction fees apply to any ``as of'' or
``reversal'' adjustments for manually processed trades originally
submitted electronically or through FBMS. See Phlx's Pricing
Schedule at Options 7, Section 4, footnote 8.
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Options 7, Section 4
    Today, the Exchange assesses Options Transaction Charges in
Multiply Listed options, including options overlying equities, ETFs,
ETNs and indexes and excluding options in SPY. The Exchange currently
assesses the following Floor Options Transaction Charges in multiply-
listed Penny and non-Penny Symbols: $0.25 per contract for a
Professional, $0.35 per contract for a Floor Lead Market Maker \6\ and
Floor Market Maker,\7\ and $0.25 per contract for a Broker-Dealer \8\
and Firm.\9\ Customers \10\ are not assessed an Options Transaction
Charge in multiply-listed Penny or non-Penny Symbols.
---------------------------------------------------------------------------

    \6\ The term ``Floor Lead Market Maker'' is a member who is
registered as an options Lead Market Maker pursuant to Options 2,
Section 12(a) and has a physical presence on the Exchange's trading
floor. See Options 8, Section 2(a)(3).
    \7\ A Floor Market Maker is a Market Maker who is neither an SQT
or an RSQT. A Floor Market Maker may provide a quote in open outcry.
See Options 8, Section 2(a)(4).
    The term ``Streaming Quote Trader'' or ``SQT'' is defined in
Options 1, Section 1(b)(54) as a Market Maker who has received
permission from the Exchange to generate and submit option
quotations electronically in options to which such SQT is assigned.
See Phlx's Pricing Schedule at Options 7, Section 1(c). The term
``Remote Streaming Quote Trader'' or ``RSQT'' is defined in Options
1, Section 1(b)(49) as a Market Maker that is a member affiliated
with an RSQTO with no physical trading floor presence who has
received permission from the Exchange to generate and submit option
quotations electronically in options to which such RSQT has been
assigned. A Remote Streaming Quote Trader Organization or ``RSQTO,''
which may also be referred to as a Remote Market Making Organization
(``RMO''), is a member organization in good standing that satisfies
the RSQTO readiness requirements in Options 2, Section 1(a). See
Phlx's Pricing Schedule at Options 7, Section 1(c).
    \8\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category. See Phlx's Pricing Schedule at Options
7, Section 1(c).
    \9\ The term ``Firm'' applies to any transaction that is
identified by a member or member organization for clearing in the
Firm range at OCC. See Phlx's Pricing Schedule at Options 7, Section
1(c).
    \10\ The term ``Customer'' applies to any transaction that is
identified by a member or member organization for clearing in the
Customer range at The Options Clearing Corporation (``OCC'') which
is not for the account of a broker or dealer or for the account of a
``Professional'' (as that term is defined in Options 1, Section
1(b)(45)). See Phlx's Pricing Schedule at Options 7, Section 1(c).
---------------------------------------------------------------------------

    The Exchange proposes to decrease the Floor Options Transaction
Charges for Professionals in multiply-listed Penny and non-Penny
Symbols from $0.25 to $0.05 per contract. The Exchange believes the
decreased Options Transaction Charges will attract a greater amount of
Professional orders to Phlx's Trading Floor.
Options 7, Section 1
    The Exchange proposes to make a technical amendment within Options
7, Section 1, General Provisions. The Exchange proposes to remove the
words ``on and'' from description of ``Market Maker'' within Options 7,
Section 1(c). Those words are not necessary. The amended description of
Market Maker would state, ``The term `Market Maker' is defined in
Options 1, Section 1(b)(28) as a member of the Exchange who is
registered as an options Market Maker pursuant to Options 2, Section
12(a). A Market Maker includes SQTs and RSQTs as well as Floor Market
Makers.''
    The Exchange proposes to add three additional descriptions to
Options 7, Section 1(c). Specifically, the Exchange

proposes to define the terms ``Floor Broker,'' ``Floor Lead Market
Maker,'' and ``Floor Market Maker.'' These terms are currently defined
within Options 8, Section 2(a)(2)-(4). The Exchange proposes to add
these terms to Options 7, Section 1(c) for greater transparency when
referencing the Pricing Schedule.
     The Exchange proposes to define a ``Floor Broker'' to mean
an individual who is registered with the Exchange for the purpose,
while on the Options Floor, of accepting and handling options orders.
     The Exchange proposes to define a ``Floor Lead Market
Maker'' to mean a member who is registered as an options Lead Market
Maker pursuant to Options 2, Section 12(a) and has a physical presence
on the Exchange's Trading Floor.
     The Exchange propose to define a ``Floor Market Maker'' to
mean a Market Maker who is neither an SQT or an RSQT. A Floor Market
Maker may provide a quote in open outcry.

The Exchange believes that these amendments to Options 7, Section 1
will bring greater clarity to the Pricing Schedule.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, 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.'' \13\
---------------------------------------------------------------------------

    \13\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    Likewise, in NetCoalition v. Securities and Exchange Commission
\14\ (``NetCoalition'') the D.C. Circuit upheld the Commission's use of
a market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\15\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \16\
---------------------------------------------------------------------------

    \14\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \15\ See NetCoalition, at 534-535.
    \16\ Id. at 537.
---------------------------------------------------------------------------

    Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .'' \17\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
---------------------------------------------------------------------------

    \17\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
---------------------------------------------------------------------------

Options 7, Section 4
    The Exchange's proposal to decrease the Floor Options Transaction
Charges for Professionals in multiply-listed Penny and non-Penny
Symbols from $0.25 to $0.05 per contract is reasonable because the
decreased fee should attract a greater amount of Professional orders to
Phlx's Trading Floor. Today, BOX Exchange LLC (``BOX'') assesses a
Professional Customer Fee of $0.10 per contract in Penny and Non-Penny
Symbols for manual transactions.\18\ By decreasing its Professional
Floor Options Transaction Charge, the Exchange believes it will be able
to compete more effectively with BOX for options order flow because of
the lower Professional fee.
---------------------------------------------------------------------------

    \18\ In addition to the Professional fee of $0.10 per contract,
BOX assesses the following Penny and Non-Penny Interval Classes
manual transactions fees: $0.25 per contract to Broker Dealers and
$0.35 per contract to Market Makers. BOX does not assess Public
Customers or Broker Dealers facilitating a Public Customer a Penny
and Non-Penny Interval Classes manual transactions fee. See BOX's
Fee Schedule at Section II.
---------------------------------------------------------------------------

    The Exchange's proposal to decrease the current Floor Options
Transaction Charges for Professionals in multiply-listed Penny and non-
Penny Symbols from $0.25 to $0.05 per contract is equitable and not
unfairly discriminatory. Today, Customers are not assessed an Options
Transaction Charge in multiply-listed Penny or non-Penny Symbols
because Customer order flow is unique. Customer liquidity benefits all
market participants by providing more trading opportunities, which
attracts Floor Lead Marker Makers and Floor Market Makers. An increase
in the activity of these market participants in turn facilitates
tighter spreads, which may cause an additional corresponding increase
in order flow from other market participants. The Exchange believes
that lowering the Professional Floor Options Transaction Charges is
similarly beneficial as the lower fees may cause market participants to
select Phlx's Trading Floor as a venue to send Professional order flow,
which benefits all market participants by attracting valuable liquidity
to the market and thereby enhancing the trading quality and efficiency
for all market participants.
    Today, Floor Lead Market Makers and Floor Market Makers are
assessed the highest Penny and non-Penny Options Transaction Charges.
Customers are not assessed a Penny or non-Penny Options Transaction
Charge. Today, Professionals, Broker-Dealers and Firms pay a Floor
Options Transaction Charge of $0.25 per contract. With this proposal,
Professionals would continue to be assessed a lower Options Transaction
Charges in multiply-listed Penny and non-Penny Symbols as compared to
Floor Lead Market Makers and Floor Market Makers. Floor Lead Market
Makers and Floor Market Makers have a time and place advantage on the
Trading Floor with respect to orders, unlike other market participants.
A Professional, Broker-Dealer or a Firm would necessarily require a
Floor Broker to represent their trading interest on the Trading Floor
as compared to a Floor Lead Market Maker or Floor Market Maker that
could directly transact such orders on the Trading Floor. Further, the
Exchange believes that in order to attract orders from a Professionals,
Broker-Dealers or a Firm, via a Floor Broker, the rates must be
competitive with rates at other trading floors. With respect to Firms,
the Exchange notes that Firms are subject to a Monthly Firm Fee Cap of
$75,000. Firm Floor Option Transaction Charges along with Qualified
Contingent Cross Transaction Fees, in the aggregate, for one billing
month may not exceed the Monthly Firm Fee Cap per member organization
when such members are trading in their own proprietary

account.\19\ Finally, with respect to Broker-Dealers, today the
Exchange waives the Floor Options Transaction Charge for Broker-Dealers
executing facilitation orders pursuant to Options 8, Section 30 when
such members would otherwise incur this charge for trading in their own
proprietary account contra to a Customer (``BD-Customer
Facilitation''), if the member's BD-Customer Facilitation average daily
volume (including both FLEX and non-FLEX transactions) exceeds 10,000
contracts per day in a given month.\20\ The Exchange notes that both
Firms and Broker-Dealers have the ability to reduce their Options
Transaction Charges as compared to Professionals.
---------------------------------------------------------------------------

    \19\ See Options 7, Section 4, which states, ``Firms are subject
to a maximum fee of $75,000 (`Monthly Firm Fee Cap'). Firm Floor
Option Transaction Charges and QCC Transaction Fees, as defined in
this section above, in the aggregate, for one billing month will not
exceed the Monthly Firm Fee Cap per member organization when such
members are trading in their own proprietary account. All dividend,
merger, and short stock interest strategy executions (as defined in
this Options 7, Section 4) will be excluded from the Monthly Firm
Fee Cap. NDX, NDXP, and XND Options Transactions will be excluded
from the Monthly Firm Fee Cap. Reversal and conversion, jelly roll
and box spread strategy executions (as defined in this Options 7,
Section 4) will be included in the Monthly Firm Fee Cap. QCC
Transaction Fees are included in the calculation of the Monthly Firm
Fee Cap. Member organizations must notify the Exchange in writing of
all accounts in which the member is not trading in its own
proprietary account. The Exchange will not make adjustments to
billing invoices where transactions are commingled in accounts which
are not subject to the Monthly Firm Fee Cap.''
    \20\ See Options 7, Section 4, which states, ``. . . In
addition, the Broker-Dealer Floor Options Transaction Charge
(including Cabinet Options Transaction Charges) will be waived for
members executing facilitation orders pursuant to Options 8, Section
30 when such members would otherwise incur this charge for trading
in their own proprietary account contra to a Customer (`BD-Customer
Facilitation'), if the member's BD-Customer Facilitation average
daily volume (including both FLEX and non-FLEX transactions) exceeds
10,000 contracts per day in a given month. NDX, NDXP, and XND
Options Transactions will be excluded from each of the waivers set
forth in the above paragraph.''
---------------------------------------------------------------------------

    The Exchange believes it is equitable and not unfairly
discriminatory to assess a Professional Floor Options Transaction
Charge that is less favorable than Customers but more favorable than
Firms, and Broker-Dealers and continue to assess a lower fee as
compared to Floor Lead Market Makers, Floor Market Makers.
Professionals have access to more information than Customers and
therefore are being assessed a less favorable Options Transaction
Charge \21\ as compared to Customers. While Professionals may have the
same technological and informational advantages as Broker-Dealers
trading for their own account,\22\ the Exchange believes that lowering
the current Professional Floor Options Transaction Charges to range
between that of a Customer and other non-Customer participants (Floor
Lead Market Makers, Floor Market Makers, Firms, and Broker-Dealers) is
equitable and not unfairly discriminatory because the potential
increased volume would create better trading opportunities that benefit
all market participants.\23\ Specifically, greater volume and liquidity
from increased order flow could create more trading opportunities and
tighter spreads. Finally, assessing lower fees for Professional
Customers compared to Floor Lead Market Makers, Floor Market Makers,
Firms, and Broker-Dealers is not novel as BOX currently assesses lower
fees for Professional Customers as compared to Broker Dealers and
Market Makers.\24\ Additionally, with respect to Qualified Contingent
Cross Fees, Phlx currently assesses Customers and Professional no fee,
while a Lead Market Maker, Market Maker, Firm and Broker-Dealer are
assessed $0.20 per contract.\25\
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    \21\ Customers are not assessed Options Transaction Charges for
multiply-listed options in Penny and non-Penny Symbols.
    \22\ A Professional by definition enters 390 orders per day on
average over a calendar month which the Exchange believes exceeds
the number of retail Customer orders in a single day.
    \23\ The Exchange notes that BOX assesses the same fees for
Professionals and Broker-Dealers for non-auction transactions within
Section I, A of BOX's Fee Schedule, PIP and COPIP transactions
within Section I, B of BOX's Fee Schedule, Facilitation and
Solicitation transactions within Section I, C of BOX's Fee Schedule,
and Complex Orders within Section III, A of BOX's Fee Schedule. See
BOX's Fee Schedule. BOX has stated in prior rule changes that,
``Professional Customers, while Public Customers by virtue of not
being Broker Dealers, generally engage in trading activity more
similar to Broker Dealer proprietary trading accounts (submitting
more than 390 standard orders per day on average).'' See Securities
Exchange Act Release No. 73547 (November 6, 2014), 79 FR 67520 at
67523 (November 13, 2014) (SR-BOX-2014-25) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule on the BOX Market LLC (``BOX'') Options Facility).
Notwithstanding this justification, BOX assesses lower Professional
manual transactions as compared to Broker-Dealers and Market Makers.
    \24\ BOX assess a Professional a manual fee of $0.10 per
contract in Penny and Non-Penny Interval Classes, while assessing
$0.25 per contract to Broker Dealers and $0.35 per contract to
Market Makers for manual transactions in Penny and Non-Penny
Interval Classes. See BOX's Fee Schedule at Section II.
    \25\ See Options 7, Section 4 which states, ``QCC Transaction
Fees for a Lead Market Maker, Market Maker, Firm and Broker-Dealer
are $0.20 per contract. Customers and Professionals are not assessed
a QCC Transaction Fee. QCC Transaction Fees apply to electronic QCC
Orders, as defined in Options 3, Section 12, and Floor QCC Orders,
as defined in Options 8, Section 30(e).''
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Options 7, Section 1
    The Exchange's proposal to amend the description of ``Market
Maker'' within Options 7, Section 1(c) is consistent with the Act. The
proposed non-substantive amendment removes unnecessary words.
    The Exchange's proposal to define the terms ``Floor Broker,''
``Floor Lead Market Maker,'' and ``Floor Market Maker'' within Options
7, Section 1(c) is consistent with the Act. The addition of these
terms, which are currently defined within Options 8, Section 2(a)(2)-
(4), will bring greater transparency to the Pricing Schedule.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
Inter-Market Competition
    The proposal does not impose an undue burden on inter-market
competition. The Exchange believes its proposal remains competitive
with other options markets and will offer market participants with
another choice of where to transact options. 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, or rebate opportunities available at
other venues to be more favorable. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
exchanges that have been exempted from compliance with the statutory
standards applicable to exchanges. Because competitors are free to
modify their own fees in response, and because market participants may
readily adjust their order routing practices, the Exchange believes
that the degree to which fee changes in this market may impose any
burden on competition is extremely limited.
    Moreover, the proposal is designed to encourage market participants
to execute a greater amount of Professional orders on Phlx's Trading
Floor. To the extent that the proposed change attracts additional
Professional orders to Phlx's Trading Floor, this increased order flow
would continue to make the Exchange a more competitive venue for order
execution.
Intra-Market Competition
    The proposed amendments do not impose an undue burden on intra-
market competition.
    The Exchange's proposal to decrease the Floor Options Transaction
Charges for Professionals in multiply-listed Penny and non-Penny
Symbols from

$0.25 to $0.05 per contract does not create an undue burden on
competition. Today, Customers are not assessed an Options Transaction
Charge in multiply-listed Penny or non-Penny Symbols because Customer
order flow is unique. Customer liquidity benefits all market
participants by providing more trading opportunities, which attracts
Floor Lead Marker Makers and Floor Market Makers. An increase in the
activity of these market participants in turn facilitates tighter
spreads, which may cause an additional corresponding increase in order
flow from other market participants. The Exchange believes that
lowering the Professional Floor Options Transaction Charges is
similarly beneficial as the lower fees may cause market participants to
select Phlx's Trading Floor as a venue to send Professional order flow,
which benefits all market participants by attracting valuable liquidity
to the market and thereby enhancing the trading quality and efficiency
for all market participants.
    Today, Floor Lead Market Makers and Floor Market Makers are
assessed the highest Penny and non-Penny Options Transaction Charges.
Customers are not assessed a Penny or non-Penny Options Transaction
Charge. Today, Professionals, Broker-Dealers and Firms pay a Floor
Options Transaction Charge of $0.25 per contract. With this proposal,
Professionals would continue to be assessed a lower Options Transaction
Charges in multiply-listed Penny and non-Penny Symbols as compared to
Floor Lead Market Makers and Floor Market Makers. Floor Lead Market
Makers and Floor Market Makers have a time and place advantage on the
Trading Floor with respect to orders, unlike other market participants.
A Professional, Broker-Dealer or a Firm would necessarily require a
Floor Broker to represent their trading interest on the Trading Floor
as compared to a Floor Lead Market Maker or Floor Market Maker that
could directly transact such orders on the Trading Floor. Further, the
Exchange believes that in order to attract orders from a Professionals,
Broker-Dealers or a Firm, via a Floor Broker, the rates must be
competitive with rates at other trading floors. With respect to Firms,
the Exchange notes that Firms are subject to a Monthly Firm Fee Cap of
$75,000. Firm Floor Option Transaction Charges along with Qualified
Contingent Cross Transaction Fees, in the aggregate, for one billing
month may not exceed the Monthly Firm Fee Cap per member organization
when such members are trading in their own proprietary account.\26\
Finally, with respect to Broker-Dealers, today the Exchange waives the
Floor Options Transaction Charge for Broker-Dealers executing
facilitation orders pursuant to Options 8, Section 30 when such members
would otherwise incur this charge for trading in their own proprietary
account contra to a Customer (``BD-Customer Facilitation''), if the
member's BD-Customer Facilitation average daily volume (including both
FLEX and non-FLEX transactions) exceeds 10,000 contracts per day in a
given month.\27\ The Exchange notes that both Firms and Broker-Dealers
have the ability to reduce their Options Transaction Charges as
compared to Professionals.
---------------------------------------------------------------------------

    \26\ See note 20 above.
    \27\ See note 21 above.
---------------------------------------------------------------------------

    Assessing a Professional Floor Options Transaction Charge that is
less favorable than Customers but more favorable than Firms, and
Broker-Dealers and continuing to assess a lower fee as compared to
Floor Lead Market Makers, Floor Market Makers does not impose an undue
burden on competition. Professionals have access to more information
than Customers and therefore are being assessed a less favorable
Options Transaction Charge \28\ as compared to Customers. While
Professionals may have the similar technological and informational
advantages as Broker-Dealers trading for their own account,\29\ the
Exchange believes that lowering the current Professional Floor Options
Transaction Charges to range between that of a Customer and other non-
Customer participants (Floor Lead Market Makers, Floor Market Makers,
Firms, and Broker-Dealers) does not impose an undue burden on
competition because the potential increased volume would create better
trading opportunities that benefit all market participants.\30\
Specifically, greater volume and liquidity from increased order flow
could create more trading opportunities and tighter spreads. Finally,
assessing lower fees for Professional Customers compared to Floor Lead
Market Makers, Floor Market Makers, Firms, and Broker-Dealers is not
novel as BOX currently assesses lower fees for Professional Customers
as compared to Broker Dealers and Market Makers.\31\ Additionally, with
respect to Qualified Contingent Cross Fees, Phlx currently assesses
Customers and Professional no fee, while a Lead Market Maker, Market
Maker, Firm and Broker- Dealer are assessed $0.20 per contract.\32\
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    \28\ See note 22 above.
    \29\ See note 23 above.
    \30\ See note 24 above.
    \31\ See note 25 above.
    \32\ See note 26 above.
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Options 7, Section 1
    The Exchange's proposal to amend the description of ``Market
Maker'' within Options 7, Section 1 does not impose an undue burden on
competition. The proposed non-substantive amendment removes unnecessary
words.
    The Exchange's proposal to define the terms ``Floor Broker,''
``Floor Lead Market Maker,'' and ``Floor Market Maker'' within Options
7, Section 1(c) does not impose an undue burden on competition. The
addition of these terms, which are currently defined within Options 8,
Section 2(a)(2)-(4), will bring greater transparency to the Pricing
Schedule.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\33\
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or 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 protected]. Please include
File Number SR-Phlx-2022-14 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-Phlx-2022-14. 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 (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Phlx-2022-14, and should be submitted on
or before April 28, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
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    \34\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-07340 Filed 4-6-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: April 15, 2009 (Volume 74, Number 71)]
[Notices]
[Page 17475]
[DOCID:fr15ap09-67]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RD09-4-000]

North American Electric Reliability Corporation; Notice of Filing

April 8, 2009.
    Take notice that on October 24, 2008, pursuant to Section 215(d)(1)
of the Federal Power Act and Part 39.5 of the Federal Energy Regulatory
Commission's Regulations, The North American Electric Reliability
Corporation (NERC) filed a petition seeking approval for
interpretations of requirements in two of its Commission-approved NERC
Reliability Standards, TPL-002-0 System Performance Following Loss of a
Single Bulk Electric System Element (Category B), Requirements R1.2.3
and R1.2.12 and TPL-003-0--System Performance Following Loss of a Two
or More Bulk Electric System Elements (Category C), Requirements R1.3.2
and R1.3.12.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://
www.ferc.gov. Persons unable to file electronically should submit an
original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on May 8, 2009.

Kimberly D. Bose,
Secretary.
 [FR Doc. E9-8561 Filed 4-14-09; 8:45 am]

BILLING CODE 6717-01-P