Daily Rules, Proposed Rules, and Notices of the Federal Government
The Exchange proposes to amend the NYSE Amex Options Fee Schedule (the "Fee Schedule") to amend the fees for Specialists and eSpecialists relating to Qualified Contingent Cross ("QCC") orders. The text of the proposed rule change is available on the Exchange's Web site at
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.
The Exchange proposes to amend the Fee Schedule to amend the fees for Specialists and eSpecialists relating to QCC orders.
Currently, the Exchange does not charge an order fee for Customer orders that comprise all or part of a QCC order. The Exchange charges $0.20 per contract for non-Customer orders for all other participants.
For a Specialist or eSpecialist executing a QCC order that has not reached its fee cap for the month under the Fee Schedule, the Exchange proposes to charge $0.13 per contract if the Specialist or eSpecialist executes an average daily volume ("ADV") of fewer than 50,000 contracts during the month, and $0.10 per contract if the Specialist or eSpecialist executes an ADV of 50,000 or more contracts during the month. In calculating the threshold of 50,000 contracts, the Exchange will exclude both Strategy Trades
The Exchange is proposing the fee reduction because Specialists and eSpecialists that are solicited to take part in a trade do not know, and have no control over, whether the trade is going to be executed as a QCC trade or through some other means.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the "Act"),
The Exchange believes that reducing the QCC non-Customer order fee for non-capped Specialists and eSpecialists is reasonable because Specialists and eSpecialists that are solicited to take part in a trade do not know in advance whether the trade is going to be executed as a QCC trade or through some other means and may incur a transaction fee that is more per contract than they would pay if the trade were executed as a non-QCC trade, which the Exchange does not believe is warranted. For these reasons, the Exchange believes that it is reasonable to charge Specialists and eSpecialists the same transaction fee for QCC or non-QCC transactions.
In addition, the Exchange believes that lowering the fee for Specialists and eSpecialists is equitable and not unfairly discriminatory because under the current Fee Schedule, other participants, including non-NYSE Amex Options Market Makers, Professional Customers, Broker Dealers, and Firms, may trade at a discount to their regular transaction fees when they execute QCC trades. As such, the proposed rule change would put Specialists and eSpecialists on more equal footing with other participants.
However, the Exchange notes that non-Directed NYSE Amex Options Market Maker orders are currently charged $0.20 per contract and $0.17 per contract if the NYSE Amex Options Market Maker executes 50,000 or more contracts ADV each day in a month. Therefore, NYSE Amex Options Market Makers pay an amount equal to or greater than their regular transaction fee when they execute QCC trades.
In addition, the Exchange believes that the proposed fee change is equitable and not unfairly discriminator [sic] because it would make Specialists and eSpecialists more likely to continue to respond to solicitations to trade, thereby attracting additional order flow to the Exchange, which can help price discovery, transparency, and liquidity, all of which are beneficial to Exchange participants.
For these reasons, the Exchange believes that the entire proposal is reasonable, equitable and not unfairly discriminatory. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually review, and consider adjusting, its fees and credits to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment.
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.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
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.
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:
* Use the Commission's Internet comment form (
* Send an email to
* Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.