Notice2025-10449
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the NYSE American Options Fee Schedule To Increase the Amount of Certain CUBE Auction Credits
Primary source
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Published
June 10, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 110 (Tuesday, June 10, 2025)</title>
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[Federal Register Volume 90, Number 110 (Tuesday, June 10, 2025)]
[Notices]
[Pages 24450-24453]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-10449]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103193; File No. SR-NYSEAMER-2025-29]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the NYSE American Options Fee Schedule To Increase the Amount of
Certain CUBE Auction Credits
June 4, 2025.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on June 2, 2025, NYSE American LLC (``NYSE American'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
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\ 15 U.S.C. 78a.
\3\ 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 American Options Fee
Schedule (``Fee Schedule'') to modify pricing for the Single-Leg and
Complex Customer Best Execution (``CUBE'') Auction. The Exchange
proposes to implement the fee change effective June 2, 2025. The
proposed rule change is available on the Exchange's website at
<a href="http://www.nyse.com">www.nyse.com</a>, at the principal office of the Exchange, and at the
Commission's Public Reference Room.
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to modify the Fee Schedule to modify
pricing for Single-Leg and Complex CUBE Auctions as set forth in
Section I.G (CUBE Auction Fees & Credits).\4\
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\4\ See generally Rules 971.1NYP and 971.2NYP (describing the
Single-Leg and Complex CUBE Auction, which is the Exchange's
electronic crossing mechanism with a price improvement auction).
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The Exchange offers ``Initiating Participant'' credits and rebates
to ATP Holders that submit ``CUBE Orders'' to its CUBE Auctions that
are designed to encourage participation in the Auction.\5\ In
particular, the Exchange offers certain Initiating Participant Rebates,
including (but not limited to) the American Customer Engagement
(``ACE'') Initiating Participant Rebates (each an ``ACE Rebate''),
which are available to ACE participants that initiate a Single-Leg or
Complex CUBE Auction \6\ and the
[[Page 24451]]
Alternative Initiating Participant Rebate (the ``Alternative Rebate''),
which is available to all ATP Holders that initiate a Complex CUBE
Auction.
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\5\ See Fee Schedule Section I.G (CUBE Auction Fees & Credits)
(describing pricing and incentives for CUBE Auctions).
\6\ The ACE Program has five tiers and offers increasing per
contract credits based on, and applied to, certain Electronic
Customer volume executed on the Exchange. See Fee Schedule Sections
I.E. (American Customer Engagement (``ACE'') Program).
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For the Single-Leg CUBE Auction, the Exchange offers two ACE
Rebates (tied to the ACE tier achieved) that are applied to the first
5,000 contracts executed in a CUBE Auction. The Exchange offers a
($0.05) per contract for ATP Holders that achieve ACE Tiers 1,2, or 3
and a ($0.12) per contract for those that achieve ACE Tiers 4 or 5.\7\
For the Complex CUBE Auction, the Exchange offers a ($0.10) per
contract ACE Rebate (regardless of ACE tier achieved) and a ($0.10) per
contract Alternative Rebate, each of which are applied to the first
1,000 contracts per leg of a Complex CUBE Order executed in a Complex
CUBE Auction.\8\
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\7\ See Fee Schedule Section I.G (CUBE Auction Fees & Credits,
Single-Leg CUBE Auction), n. 2.
\8\ See Fee Schedule Section I.G (CUBE Auction Fees & Credits,
Complex CUBE Auction), n. 2. To be eligible for the Alternative
Rebate, ATP Holders must [sic] certain monthly volume
qualifications. See id.
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The Exchange proposes to increase certain of these Initiating
Participant rebates to encourage ATP Holders to direct additional CUBE
volume to the Exchange. For the Single-Leg CUBE Auction, the Exchange
proposes to increase the ACE Rebate for participants that achieve ACE
Tier 1, 2, or 3 from ($0.05) to ($0.12) per contract.\9\ For the
Complex CUBE Auction, the Exchange proposes to increase both the ACE
Rebate and the Alternative Rebate from ($0.10) to ($0.12) per
contract.\10\ As is the case today, both the ACE Rebates and the
Alterative Rebate are payable in addition to any Initiating Participant
credits offered for participation in CUBE Auctions and ATP Holders that
qualify for more than one rebate would be entitled only to the greater
of the two rebates.\11\
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\9\ See proposed Fee Schedule Section I.G (CUBE Auction Fees &
Credits, Single-Leg CUBE Auction). The ACE Rebate for participants
that achieve ACE Tiers 4 or 5 is not being altered and will remain
at ($0.12) per contract. See id.
\10\ See proposed Fee Schedule Section I.G (CUBE Auction Fees &
Credits, Single-Leg CUBE Auction).
\11\ See Fee Schedule Section I.G (CUBE Auction Fees & Credits,
Single-Leg CUBE Auction, at n. 3 [sic] and Complex CUBE Auction, at
n. 2).
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Although the Exchange cannot predict with certainty whether the
proposed Rebates will continue to encourage ATP Holders to initiate
CUBE Auctions (or participate in the ACE Program), all market
participants stand to benefit from increased liquidity and
opportunities for price improvement. Increased order flow promotes
market depth, facilitates tighter spreads and enhances price discovery,
which enhances market quality for all participants.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\13\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4) and (5).
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In particular, the proposed rebates are reasonable, equitable, and
not unfairly discriminatory. As a threshold matter, the Exchange is
subject to significant competitive forces in the market for options
securities transaction services that constrain its pricing
determinations in that market. 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.'' \14\
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\14\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (S7-10-04) (``Reg NMS
Adopting Release'').
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There are currently 18 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.\15\ Therefore, currently no exchange possesses significant
pricing power in the execution of multiply-listed equity & ETF options
order flow. More specifically, in April 2025, the Exchange had 6.43%
market share of executed volume of multiply-listed equity & ETF options
trades.\16\ In such a low-concentrated and highly competitive market,
no single options exchange possesses significant pricing power in the
execution of options order flow. Within this environment, market
participants can freely and often do shift their order flow among the
Exchange and competing venues in response to changes in their
respective pricing schedules.
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\15\ The OCC publishes options and futures volume in a variety
of formats, including daily and monthly volume by exchange,
available here: <a href="https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics">https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics</a>.
\16\ Based on a compilation of OCC data for monthly volume of
equity-based options and monthly volume of equity-based ETF options,
see id., the Exchanges market share in equity-based options
decreased from 8.50% for the month of April 2024 to 6.43% for the
month of April 2025.
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In response to these competitive forces and as discussed herein,
the Exchange has established various pricing incentives regarding its
CUBE Auctions, including (but not limited to) the ACE Rebates and the
Alternative Rebate, to encourage ATP Holders to utilize the Auction and
to direct (increased) volume to the Exchange.
The Exchange believes the proposed rebates are reasonable,
equitable, and not unfairly discriminatory. First, the proposed changes
do not alter an ATP Holder's ability to qualify for existing Initiating
Participant credits or rebates that are not being altered by this
proposal. In addition, this proposal does not modify the qualification
basis to achieve any of the proposed rebates but instead increases the
per contract amount that an ATP Holder may achieve. Therefore, the
proposed rebates should not impact the ability of ATP Holders that
previously qualified for the ACE Rebates or the Alternative Rebate to
continue to do so. Furthermore, the proposed increases in the ACE
Rebates should incent ATP Holders that participate in the ACE Program
to continue to initiate CUBE Auctions. Similarly, for non-ACE
participants that qualify for the Alternative Rebate, the proposed
increase should continue to incent ATP Holders to (continue to)
initiate Complex CUBE Auctions. To the extent the proposed rebates
increase the amount of order flow directed to the Exchange, this
increased liquidity will promote market depth and enhance market
quality to the benefit of all market participants.
The Exchange believes that the proposed rebates represents [sic] an
equitable allocation of credits/rebates and are not unfairly
discriminatory because they are based on the amount and type of
business transacted on the Exchange. ATP Holders are not obligated to
participate in CUBE Auctions or the ACE Program. In addition, the
proposed rebates will apply equally to all similarly-situated ATP
Holders. Like other pricing incentives, the proposed rebates are
designed to encourage market participants to utilize the Exchange as a
primary trading venue (if they have not done so previously) and
increase volume sent to the Exchange, including CUBE Auction and
Customer volume.
[[Page 24452]]
To the extent that the proposed (increased) rebates attract more
CUBE volume to the Exchange, this increased order flow would continue
to make the Exchange a more competitive venue for order execution.
Thus, the Exchange believes the proposed rebates will improve market
quality for all market participants on the Exchange and attract more
order flow to the Exchange thereby improving market-wide quality and
price discovery. The resulting increased volume and liquidity would
provide more trading opportunities and tighter spreads to all market
participants and thus would promote just and equitable principles of
trade, remove impediments to and perfect the mechanism of a free and
open market and a national market system and, in general, to protect
investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act, the Exchange does
not believe that the proposed rule change would impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, as discussed above, the Exchange believes
that the proposed changes would continue to encourage the submission of
additional liquidity to a public exchange, thereby promoting market
depth, price discovery and transparency and enhancing order execution
opportunities for all market participants. As a result, the Exchange
believes that the proposed changes further the Commission's goal in
adopting Regulation NMS of fostering integrated competition among
orders, which promotes ``more efficient pricing of individual stocks
for all types of orders, large and small.'' \17\
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\17\ See Reg NMS Adopting Release, supra note 13, at 37499.
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Intramarket Competition
The Exchange believes that the proposed rebates do not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act as they will apply equally to
all similarly-situated ATP Holders and be based on the amount and type
of business transacted on the Exchange. ATP Holders are not obligated
to participate in CUBE Auctions or to avail themselves of the proposed
rebates. The proposed rebates will not adversely impact any ATP
Holder's ability to qualify for existing pricing incentives related to
initiating CUBE Auctions as this proposal does not alter (nor impact
the availability of) existing Initiating Participant credits and
rebates. Further, the qualification bases to achieve the increased
rebates will remain the same.
This proposal is designed to encourage participants to utilize the
Exchange as a primary trading venue (if they have not done so
previously), particularly to initiate CUBE Auctions. As such, the
Exchange believes this proposal will help promote competition by
providing incentives for market participants to continue to submit CUBE
Orders (i.e., Customer order flow) to the Exchange and thus, create a
greater opportunity for Customers to receive additional price
improvement and access greater liquidity.
Intermarket Competition
The Exchange operates in a highly competitive market in which
market participants can readily favor one of the other 17 competing
option exchanges if they deem fee levels at a particular venue to be
excessive. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges and to attract
order flow to the Exchange. 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.\18\ Therefore, currently no exchange possesses
significant pricing power in the execution of multiply-listed equity
and ETF options order flow. More specifically, in April 2025, the
Exchange had 6.43% market share of executed volume of multiply-listed
equity & ETF options trades.\19\
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\18\ The OCC publishes options and futures volume in a variety
of formats, including daily and monthly volume by exchange,
available here: <a href="https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics">https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics</a>.
\19\ Based on a compilation of OCC data for monthly volume of
equity-based options and monthly volume of equity-based ETF options,
see id., the Exchanges market share in equity-based options
decreased from 8.50% for the month of April 2024 to 6.43% for the
month of April 2025.
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The Exchange believes that the proposed rule change reflects this
competitive environment as it designed to encourage ATP Holders to
direct trading interest to the Exchange, to provide liquidity and to
attract order flow. To the extent that this purpose is achieved, all
the Exchange's market participants should benefit from the improved
market quality and increased opportunities for price improvement.
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) \20\ of the Act and subparagraph (f)(2) of Rule
19b-4 \21\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\20\ 15 U.S.C. 78s(b)(3)(A).
\21\ 17 CFR 240.19b-4(f)(2).
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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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \22\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\22\ 15 U.S.C. 78s(b)(2)(B).
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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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#b9cbccd5dc94dad6d4d4dcd7cdcaf9cadcda97ded6cf"><span class="__cf_email__" data-cfemail="1361667f763e707c7e7e767d6760536076703d747c65">[email protected]</span></a>. Please include
file number SR-NYSEAMER-2025-29 on the subject line.
Paper Comments
<bullet> 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-NYSEAMER-2025-29. 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 post all comments on
the Commission's
[[Page 24453]]
internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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 a.m. and 3
p.m. Copies of the filing also will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-NYSEAMER-2025-29 and should be submitted
on or before July 1, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Stephanie Fouse,
Assistant Secretary.
[FR Doc. 2025-10449 Filed 6-9-25; 8:45 am]
BILLING CODE 8011-01-P
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