60 Day Notice

Federal Register / Vol. 84, No. 146 / Tuesday, July 30, 2019 / Notices
In sum, if the changes proposed
herein are unattractive to market
participants, it is likely that the
Exchange will lose market share as a
result. Accordingly, the Exchange does
not believe that the proposed changes
will impair the ability of members or
competing order execution venues to
maintain their competitive standing in
the financial markets.
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.16
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:

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Electronic Comments
• Use the Commission’s internet
comment form (http://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BX–2019–026 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–BX–2019–026. 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
16 15

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–BX–2019–026 and should
be submitted on or before August 20,
2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–16093 Filed 7–29–19; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–601, OMB Control No.
3235–0673]

Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Extension:
Rule 15c3–5

Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 15c3–5 (17 CFR
240.15c3–5) under the Securities

U.S.C. 78s(b)(3)(A)(ii).

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16:42 Jul 29, 2019

17 17

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Exchange Act of 1934 (15 U.S.C. 78a et
seq.) (‘‘Exchange Act’’). The
Commission plans to submit this
existing collection of information to the
Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Rule 15c3–5 under the Exchange Act
requires brokers or dealers with access
to trading directly on an exchange or
alternative trading system (‘‘ATS’’),
including those providing sponsored or
direct market access to customers or
other persons, to implement risk
management controls and supervisory
procedures reasonably designed to
manage the financial, regulatory, and
other risks of this business activity.
The rule requires brokers or dealers to
establish, document, and maintain
certain risk management controls and
supervisory procedures as well as
regularly review such controls and
procedures, and document the review,
and remediate issues discovered to
assure overall effectiveness of such
controls and procedures. Each such
broker or dealer is required to preserve
a copy of its supervisory procedures and
a written description of its risk
management controls as part of its books
and records in a manner consistent with
Rule 17a–4(e)(7) under the Exchange
Act. Such regular review is required to
be conducted in accordance with
written procedures and is required to be
documented. The broker or dealer is
required to preserve a copy of such
written procedures, and documentation
of each such review, as part of its books
and records in a manner consistent with
Rule 17a–4(e)(7) under the Exchange
Act, and Rule 17a–4(b) under the
Exchange Act, respectively.
In addition, the Chief Executive
Officer (or equivalent officer) is required
to certify annually that the broker or
dealer’s risk management controls and
supervisory procedures comply with the
rule, and that the broker-dealer
conducted such review. Such
certifications are required to be
preserved by the broker or dealer as part
of its books and records in a manner
consistent with Rule 17a–4(b) under the
Exchange Act. Compliance with Rule
15c3–5 is mandatory.
Respondents consist of broker-dealers
with access to trading directly on an
exchange or ATS. The Commission
estimates that there are currently 570
respondents. To comply with Rule
15c3–5, these respondents will spend a
total of approximately 91,200 hours per
year (160 hours per broker-dealer × 570
broker-dealers = 91,200 hours). At an
average internal cost per burden hour of
approximately $358.51, the resultant
total related internal cost of compliance
for these respondents is $32,696,340 per

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Federal Register / Vol. 84, No. 146 / Tuesday, July 30, 2019 / Notices

year (91,200 burden hours multiplied by
approximately $358.51/hour). In
addition, for hardware and software
expenses, the Commission estimates
that the average annual external cost
would be approximately $20,500 per
broker-dealer, or $11,685,000 in the
aggregate ($20,500 per broker-dealer ×
570 brokers and dealers = $11,685,000).
Written comments are invited on (a)
whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: Charles Riddle, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington,
DC 20549, or send an email to: PRA_
Mailbox@sec.gov.

2019, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.

Dated: July 24, 2019.
Jill M. Peterson,
Assistant Secretary.

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

[FR Doc. 2019–16089 Filed 7–29–19; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86458; File No. SR–
NYSEARCA–2019–52]

Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Modify the NYSE Arca
Options Fee Schedule
jspears on DSK3GMQ082PROD with NOTICES

July 24, 2019.

Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on July 11,
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.

16:42 Jul 29, 2019

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.

1. Purpose
The purpose of this filing is to amend
the Fee Schedule to modify the criteria
for Market Makers to qualify for
enhanced posting credits in Penny Pilot
issues and SPY (the ‘‘Penny Credit
Tiers’’). Specifically, to encourage
Market Makers and Lead Market Makers
(collectively, ‘‘Market Makers’’) to direct
orders and quotes to the Exchange, this
proposed rule change would lower the
minimum volume threshold that Market
Makers are required to trade in order to
receive the credits in the highest of the
Penny Credit Tiers (i.e., Super Tier II),
thus making it easier to qualify for these
credits. The associated per contract
credit remains the same. The Exchange
4 The Exchange filed to amend the Fee Schedule
for effectiveness on July 1, 2019, (SR–NYSEArca–
2019–48) and withdrew such filing on July 11,
2019.

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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to modify the
NYSE Arca Options Fee Schedule (‘‘Fee
Schedule’’). The Exchange proposes to
implement the fee change effective July
11, 2019.4 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.

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proposes to implement the fee changes
effective July 11, 2019.
Background
The Commission has repeatedly
expressed its preference for competition
over regulatory intervention in
determining prices, products, and
services in the securities markets. 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.’’ 5
There are currently 16 registered
options exchanges competing for order
flow. Based on publicly-available
information, and excluding index-based
options, no single exchange has more
than 16% of the market share of
executed volume of multiply-listed
equity and ETF options trades.6
Therefore, no exchange possesses
significant pricing power in the
execution of multiply-listed equity &
ETF options order flow. More
specifically, in the first quarter of 2019,
the Exchange had less than 10% market
share of executed volume of multiplylisted equity & ETF options trades.7
Similarly, the equities markets too face
stark competition, which is relevant
because the Exchange offers ‘‘cross-asset
pricing,’’ which is designed to
incentivize participants to execute a
certain amount of volume on both the
Exchange’s equities and options
platform. As the Commission itself
recognized, the market for trading
services in NMS stocks has become
‘‘more fragmented and competitive.’’
Indeed, equity trading is currently
dispersed across 13 exchanges, 32
alternative trading systems, and
numerous broker-dealer internalizers
and wholesalers, all competing for order
flow. Based on publicly-available
information, no single exchange has
more than 18% market share (whether
including or excluding auction volume).
Therefore, no exchange possesses
significant pricing power in the
execution of equity order flow. More
specifically, in the first quarter of 2019,
the Exchange averaged less than 9%
5 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
6 The Options Clearing Corporation (‘‘OCC’’)
publishes options and futures volume in a variety
of formats, including daily and monthly volume by
exchange, available here: https://www.theocc.com/
market-data/volume/default.jsp.
7 Based on OCC data, see id., the Exchange’s
market share in equity-based options declined from
9.57% for the month of January to 9.52% for the
month of April.

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