Daily Rules, Proposed Rules, and Notices of the Federal Government
The Exchange proposes to amend the NYSE Amex Options Fee Schedule ("Fee Schedule") to remove dividend spreads from the list of strategy executions for which fee caps apply. 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 its Fee Schedule to remove dividend spreads from the list of strategy executions for which fee caps apply. The proposed fee change will be operative on November 1, 2012.
Under the Exchange's current Fee Schedule, there is a $750 cap on transaction fees for strategy executions involving (a) reversals and conversions,
The Exchange proposes to remove dividend spreads from the list of Strategy Executions that are subject to the fee caps. The fee caps may provide an incentive to engage in the Strategy Executions. The Exchange has determined that it does not wish to continue to provide an incentive via its Fee Schedule to engage in dividend spread trading because this strategy may encourage high volumes of trading of certain securities near the ex-dividend date and present operational risks to market participants with respect to clearing, exercise, and assignment or other issues that may prevent the market participant from the timely exercise of call options and collecting the dividend owed. As such, the Exchange proposes to remove dividend spreads from the Strategy Executions fee caps.
The Exchange also proposes to specify that, as a result of removing dividend spreads from the list of Strategy Executions that are subject to the fee caps, the type of execution that the Exchange currently considers to be a dividend spread
The proposed change is not otherwise intended to address any other matter, and the Exchange is not aware of any significant problem that the affected
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 the proposed change is reasonable because the fee caps may provide an incentive to engage in dividend spreads and the Exchange has determined that it no longer wishes to offer any potential incentive via its Fee Schedule in light of the operational risks that dividend spreads may present. The Exchange also believes that the proposed change is equitable and not unfairly discriminatory because it would apply equally to all market participants and because the remaining Strategy Executions that would continue to be subject to the fee caps do not present the same type of potential operational risks.
Furthermore, it is reasonable to specify that the type of execution that the Exchange currently considers to be a dividend spread
The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues. 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.