[Federal Register Volume 75, Number 74 (Monday, April 19, 2010)]
[Notices]
[Pages 20413-20415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8948]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61894; File No. SR-NYSEArca-2010-24]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change, as Modified by
Amendment No. 1, Amending Its Fee Schedule
April 13, 2010.
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 April 1, 2010, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. On April 9, 2010, NYSE Arca
filed Amendment No. 1 to this filing. NYSE Arca has designated this
proposal as one establishing or changing a member due, fee, or other
charge imposed under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule
19b-4(f)(2) thereunder,\4\ which renders the proposal effective upon
filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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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 Charges for
Exchange Services (the ``Schedule''). While changes to the Schedule
pursuant to this proposal will be effective upon filing, the changes
will become operative on April 1, 2010. The amended section of the
Schedule is included as Exhibit 5 hereto. A copy of this filing is
available on the Exchange's Web site at http://www.nyse.com, at the
Exchange's principal office, at the Commission's Public Reference Room,
and on the Commission's Web site at http://www.sec.gov.
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 is proposing changes to certain fees to improve
competitiveness and encourage participation and liquidity by Customer,
Firms, Broker Dealers, and Market Makers.
Lead Market Maker Rights Fee
Presently, the Exchange charges Lead Market Makers (``LMMs'') a
monthly rights fee for each appointed issue. Effective April 1, 2010,
the Exchange will reduce the rights fee by 50% in each tier as shown
below.
------------------------------------------------------------------------
Average national daily customer
contracts per issue Monthly base rate
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0 to 2,000............................. [$150] $75
2,001 to 5,000......................... [$400] $200
5,001 to 15,000........................ [$750] $375
15,001 to 100,000...................... [$1,500] $750
Over 100,000........................... [$3,000] $1,500
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Transaction Fee Changes
The Exchange proposes to restructure certain trade related charges
for non-electronic trades. These trades are executed in the Firm range
(clearance account ``F'') and are currently billed either the Firm
Facilitation rate or the Broker Dealer & Firm rate. Under the current
rate schedule trades by a firm that facilitate a customer, or Firm
Facilitation trades, are subject to a $0.00 rate per contract. Firm
transactions not facilitating a customer are subject to a $0.25 Broker/
Dealer & Firm Manual rate. Under the revised rate schedule all manual
trades clearing in the Firm range will be subject to a rate of $0.18
per contract and further capped at $2,000 per issue per day, per
trading participant. Firm Proprietary electronic trades will continue
to be charged $0.50 per contract in non-Penny Pilot issues, $0.45 per
contract for taking liquidity in Penny Pilot issues, and receive a
credit of $0.25 per contract for posting liquidity in Penny Pilot
issues, consistent with the current rates, but now a separate line in
the Schedule.
The Exchange also proposes to introduce a Premium Tier for
electronic transactions in certain Penny Pilot Issues. Electronic
executions in options overlying SPY, C, BAC, QQQQ, AAPL, IWM, XLF, GLD,
EEM, GE, UNG, FAZ, DIA, GDX, and USO will qualify for the Premium Tier,
and will receive an additional $.05 per contract credit above the
stated Post Liquidity credit. This is consistent with similar billing
treatment of select symbols currently in place at Nasdaq OMX PHLX.\5\
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\5\ See Nasdaq OMX PHLX Fee Schedule dated March 26, 2010.
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NYSE Arca also proposes to introduce Tiered Pricing for certain
high monthly volume levels in non-Premium Tier Penny Pilot issues. This
new tiered pricing structure will replace the current Market Maker Post
Liquidity Incentive Credit that provided Market Makers with an
additional $0.01 credit
[[Page 20414]]
for posting liquidity of greater than 1,000,000 executed contracts per
month and $0.05 for posting liquidity greater than 5,000,000 executed
contracts per month. The Exchange also proposes to delete the
accompanying footnote eight in its entirety. For each Electronic
Transaction contract in these issues above 999,999 contracts per month
up to 1,999,999 per month, the Customer Take Fee will be reduced by
$0.05 per contract, and the Market Maker Credit will be increased by
$0.05 per contract. For each Electronic Transaction contract in these
issues above 1,999,999 contracts per month up to 2,999,999 per month,
the Customer Take Fee will be reduced by a total of $0.10 per contract,
and the Market Maker Credit will be increased by $0.10 per contract.
For each Electronic Transaction contract in these issues above
2,999,999 contracts per month, the Customer Take Fee will be reduced by
a total of $0.15 per contract, and the Market Maker Credit will be
increased by $0.15 per contract.
Limit of Fees on Strategy Executions
In addition, NYSE Arca also proposes to make permanent the pilot
program for a cap on transaction fees for Strategy Executions
associated with (a) Reversals and conversions, (b) dividend spreads,
(c) box spreads, (d) short stock interest spreads, (e) merger spreads,
and (f) jelly rolls. The Strategy Fee Cap pilot program expired on
March 1, 2010. Under the program, transactions fees were capped at $750
per transaction, and, in addition, such transaction fees for these
strategies are further capped at $25,000 per month per initiating firm.
This proposal is consistent with the Nasdaq OMX PHLX filing to make
permanent a similar Strategy fee cap pilot program.\6\ The Exchange
proposes to make the pilot permanent, effective upon filing of this
proposed rule change.
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\6\ See Securities Exchange Act Release No. 59566 (March 12,
2009), 74 FR 11793 (March 19, 2009) (SR-PHLX-2009-18).
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The Exchange also proposes, effective April 1, 2010, that Manual
Broker Dealer and Firm Strategy Trades that do not reach the $750 cap
be billed at a rate of $0.25 per contract. Further, the Exchange
proposes to clarify that FLEX Option executions are not considered
Strategy executions.
Report Fees
Finally, the Exchange proposes to reduce the fee for User Activity
extracts from $0.0075 per trade to $0.002 per trade, plus development
and set-up costs.
The changes are part of the Exchange's continued effort to attract
and enhance participation on the NYSE Arca options marketplace. The
Exchange believes these proposed fee changes are reasonable and
equitable in that they apply uniformly to all similarly situated
participants on the NYSE Arca options marketplace.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Securities Exchange Act of 1934
(the ``Act''),\7\ in general, and Section 6(b)(4) of the Act,\8\ in
particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities. The proposed changes to
the Schedule are part of the Exchange's continued effort to attract and
enhance participation on the Exchange, by offering attractive rates for
removing liquidity and rebates for providing liquidity to the Exchange.
The proposed changes to the Schedule are equitable in that they apply
uniformly to all similarly situated OTP Holders.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
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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 that is not necessary or appropriate
in furtherance of the purposes of the Act.
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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge
imposed by NYSE Arca on its members.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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.
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 e-mail to [email protected]. Please include
File Number SR-NYSEArca-2010-24 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, Station Place, 100 F Street, NE., Washington,
DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2010-24. This
file number should be included on the subject line if e-mail 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 a.m. and 3 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
publicly available. All submissions should refer to File Number SR-
NYSEArca-2010-24 and should be submitted on or before May 10, 2010.
[[Page 20415]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8948 Filed 4-16-10; 8:45 am]
BILLING CODE 8011-01-P