
[Federal Register Volume 76, Number 202 (Wednesday, October 19, 2011)]
[Notices]
[Pages 64983-64984]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-26991]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65549; File No. SR-NYSEAmex-2011-77]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Regarding 
Amendments to the NYSE Amex Options Fee Schedule Relating to Electronic 
Complex Orders

October 13, 2011.
    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 October 5, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE Amex'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 the NYSE Amex Options Fee Schedule 
(``Fee Schedule'') with respect to Electronic Complex Order executions. 
The proposed change will be operative on October 5, 2011. The text of 
the proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and http://www.nyse.com.

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

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

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

1. Purpose
    The Exchange proposes to amend the Fee Schedule with respect to 
Electronic Complex Order \3\ executions and to make other technical 
changes.
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    \3\ Under NYSE Amex Option Rule 980NY, an ``Electronic Complex 
Order'' is any Complex Order as defined in NYSE Amex Options Rule 
900.3NY(e) or any Stock/option Order or Stock/Complex Order as 
defined in NYSE Amex Options Rule 900.3NY(h) that is entered into 
the NYSE Amex System.
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    The current Fee Schedule sets forth a separate list of charges for 
Electronic Complex Orders. Under the Fee Schedule, when an Electronic 
Complex Order trades against another Electronic Complex Order, there is 
a charge of $.05 per contract side, including where the same firm 
represents both sides. Customers (excluding Professional Customers) are 
not charged. If an Electronic Complex Order trades against an 
individual order in the Consolidated Book, it is subject to standard 
trade-related charges in the Fee Schedule. Under endnote 5 of the Fee 
Schedule, Specialist, e-Specialist, and Market Maker (both Directed and 
non-Directed) fees are aggregated and capped at $350,000 per month plus 
an incremental service fee of $.01 per contract for all Specialist, e-
Specialist and Market Maker volume executed in excess of 3,500,000 
contracts per month. Electronic Complex Order fees currently count 
toward both the $350,000 cap and the 3,500,000 thresholds, but are not 
themselves capped.
    The Exchange proposes to eliminate the separate list of charges for 
Electronic Complex Orders and instead impose the standard per contract 
fees set forth in the Fee Schedule. Each market participant will pay 
the applicable rate per contract set forth in the Fee Schedule, ranging 
from $.10 to $.40, that applies for all other transactions; Customers 
(excluding Professional Customers) will continue to trade for free.\4\
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    \4\ The Exchange notes that a complex order executed as part of 
a Qualified Contingent Cross (``QCC'') trade will never interact 
with the Electronic Complex Order Book. As such, a complex order 
executed as part of a QCC will be subject to the fees applicable to 
QCCs. If a single leg order, complex order, or Strategy Trade is 
marked QCC, it receives QCC billing treatment.
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    The Exchange also proposes to amend endnote 5 with respect to the 
fee caps. Under the amendment, Electronic Complex Order fees will be 
subject to the $350,000 per month fee cap plus an incremental service 
fee of $.05 per contract for all Specialist, e-Specialist and Market 
Maker volume executed in excess of 3,500,000 contracts per month.\5\
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    \5\ The Exchange further notes that, like all transactions 
subject to the standard trade-related charges in the Fee Schedule, 
Marketing Charges will continue to apply to Electronic Complex 
Orders. The only transactions to which Marketing Charges do not 
apply are expressly excluded in endnote 10 of the Fee Schedule.
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    The proposed changes will be operative on October 5, 2011.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) \6\ of the Securities Exchange Act 
of 1934 (the ``Act''), in general, and Section 6(b)(4) \7\ of the Act, 
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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that adopting the proposed amendments will 
make its Fee Schedule simpler and easier for market participants to 
understand. In addition, the Exchange believes that the proposed 
Electronic Complex Orders

[[Page 64984]]

fees are fair and reasonable, equitably allocated, and not unfairly 
discriminatory because they generally will be the same as the currently 
applicable standard fee schedule, with the exception of transactions 
that exceed the fee cap threshold for Specialists, e-Specialists, and 
Market Makers (both Directed and non-Directed).\8\
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    \8\ NYSE Amex notes that at least one other exchange generally 
applies its standard transaction fees to Electronic Complex Orders 
too. See Chicago Board Options Exchange, Incorporated Fees Schedule, 
dated September 1, 2011, available at http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf.
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    The Exchange also believes that with the proposed transition to the 
standard fee schedule, it is reasonable and not unfairly discriminatory 
to include Electronic Complex Orders in the fee cap for Specialists, e-
Specialists, and Market Makers. These market participants incur permit 
fees and are obligated to provide liquidity; the Exchange believes that 
it is appropriate to reduce their fees once they have provided the 
threshold level of liquidity to the market. The Exchange believes that 
the fee cap, along with the reduced fee, will encourage these dedicated 
liquidity providers to continue to provide liquidity on a non-
discriminatory basis to all market participants.
    The proposal to charge $.05 per contract for those transactions 
that exceed the fee cap threshold also is reasonable, equitable and not 
unfairly discriminatory because it is the same fee that such a 
participant would pay today under the under the current Fee Schedule 
for Electronic Complex Orders. In addition, the Exchange incurred costs 
to build the Electronic Complex Order book and the marginally higher 
fee ($.05 versus $.01) for transactions in excess of the fee cap will 
assist the Exchange in recouping such costs from the market 
participants that derive benefits from the Electronic Complex Order 
book.

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 the Exchange. 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.
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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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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 rule-comments@sec.gov. Please include 
File Number SR-NYSEAmex-2011-77 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAmex-2011-77. 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, NW., Washington, DC 20549, on official business days between 
the hours of 10 a.m. and 3 p.m. The text of the proposed rule change is 
available on the Commission's Web site at http://www.sec.gov. Copies of 
such filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSEAmex-2011-77 and should be submitted on or before 
November 9, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Elizabeth M. Murphy,
Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2011-26991 Filed 10-18-11; 8:45 am]
BILLING CODE 8011-01-P


