Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule To Eliminate Customer and Professional Customer Fees and Introduce a Floor Broker Incentive for Trading in Certain MSCI Related Index Options

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<title>Federal Register, Volume 91 Issue 162 (Monday, August 24, 2026)</title>
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[Federal Register Volume 91, Number 162 (Monday, August 24, 2026)]
[Notices]
[Pages 54780-54782]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17204]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106162; File No. SR-NYSEARCA-2026-85]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Modify the 
NYSE Arca Options Fee Schedule To Eliminate Customer and Professional 
Customer Fees and Introduce a Floor Broker Incentive for Trading in 
Certain MSCI Related Index Options

August 19, 2026.
    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 August 11, 2026, 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 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 modify the NYSE Arca Options Fee Schedule 
(``Fee Schedule'') to eliminate Customer and Professional Customer fees 
and introduce a Floor Broker incentive for trading in certain MSCI 
related Index Options. The Exchange proposes to implement the fee 
changes effective August 11, 2026. The proposed rule change is 
available on the Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a> and at the 
principal office of the Exchange.

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 Exchange lists a number of index options for which an MSCI 
index is the underlying security (i.e., MSCI EAFE Index (MXEA), MSCI 
Emerging Markets Index (MXEF), MSCI World Index (MXWLD), MSCI ACWI 
Index (MXACW) and MSCI USA Index (MXUSA)) (collectively the ``MSCI 
Index Options''). The Exchange proposes to modify the Fee Schedule to 
eliminate Customer and Professional Customer fees for manual executions 
in all MSCI Index Options and introduce a Floor Broker incentive for 
trading in MXEA and MXEF. The Exchange proposes to implement the fee 
changes effective August 11, 2026.\4\
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    \4\ The Exchange originally filed to amend the Fee Schedule on 
July 31, 2026 (SR-NYSEARCA-2026-82). SR-NYSEARCA-2026-82 was 
withdrawn on August 11, 2026, and replaced by this filing.
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    Currently, the Exchange imposes a fee of $0.25 per contract for 
Customer and Professional Customer manual executions in MXEA and 
MXEF.\5\ The Exchange also imposes a $0.05 per contract fee for 
Customer and Professional Customer manual executions in MXUSA, MXWLD 
and MXACW.\6\
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    \5\ See Fee Schedule ``NYSE Arca OPTIONS: TRADE-RELATED CHARGES 
FOR STANDARD OPTIONS, TRANSACTION FEE FOR MANUAL EXCUTIONS PER 
CONTRACT.''
    \6\ Id.
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    The Exchange proposes to lower these fees to $0.00.\7\ In addition, 
the Exchange proposes to amend Endnote 19 to adopt a $0.25 per contract 
rebate to Participants in the Floor Broker Prepayment Incentive Program 
on all non-Strategy trading executions in MXEA and MXEF.\8\ However, 
the rebate will not apply to any trades that are included in in the 
Limit of Fees On Options Strategy Executions.\9\
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    \7\ See proposed Fee Schedule ``NYSE Arca OPTIONS: TRADE-RELATED 
CHARGES FOR STANDARD OPTIONS.''
    \8\ See proposed Fee Schedule amended Endnote 19.
    \9\ Id. The Limit Of Fees On Options Executions applies to 
Strategy Executions involving (a) reversals and conversions, (b) box 
spreads, (c) short stock interest spreads, (d) merger spreads, and 
(e) jelly rolls, and (f) dividends.
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    The elimination of the fees related to Customer and Professional 
Customer manual transactions in MSCI Options

[[Page 54781]]

reflects the Exchange's belief that these sources of order flow have 
been integral in attracting liquidity and trading interest in the MSCI 
Options. Moreover, their elimination will align the fees charged for 
Customer and Professional Customer manual executions in non-MSCI 
related options.\10\
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    \10\ See Fee Schedule ``NYSE Arca OPTIONS: TRADE-RELATED CHARGES 
FOR STANDARD OPTIONS, TRANSACTION FEE FOR MANUAL EXECUTIONS PER 
CONTRACT.''
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    The rebate reflects the fact that MXEA and MXEF are separate and 
distinct products from the remainder of the MSCI Index Options with 
unique characteristics, which, since their initial listing on February 
25, 2026, MXEA and MXEF have shown promising levels of interest and 
liquidity. The Exchange believes that a rebate focused on these two 
products will enhance that interest and provide for more robust 
liquidity.
    The Exchange believes that the elimination of the fees and the 
rebate will incentivize activity associated with the MSCI Options on 
the Exchange. Any increase in such activity would create more trading 
opportunities for all market participants and would, in turn, attract 
additional order flow to the Exchange, further contributing to a 
deeper, more liquid market to the benefit of all market participants.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\11\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\12\ 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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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4) and (5).
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    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.'' \13\
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    \13\ 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.\14\ Therefore, currently no exchange possesses significant 
pricing power in the execution of multiply-listed equity and ETF 
options order flow. More specifically, in June 2026, the Exchange had 
10.41% market share of executed volume of multiply-listed equity and 
ETF options order flow. In such a low concentrated and highly 
competitive market, no single options exchange possesses significant 
pricing power in the execution of option order flow.
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    \14\ The OCC publishes options and futures volume in a variety 
of formats, including daily and monthly volume by exchange, 
available at: <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>.
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    The Exchange believes that the ever-shifting market share among the 
exchanges from month to month demonstrates that market participants can 
shift order flow or discontinue or reduce use of certain categories of 
products, in response to fee changes. Accordingly, competitive forces 
constrain options exchange transaction fees. In response to this 
competitive marketplace, the Exchange proposes to eliminate fees 
charged for MSCI Index Options as an incentive to create more trading 
opportunities on the Exchange for all market participants in these 
products. Greater liquidity benefits all market participants on the 
Exchange and increased order flow would increase opportunities for 
execution of other trading interest.
    Similarly, the Exchange also believes the proposed rebate for Floor 
Broker activity in MXEA and MXEF is an equitable allocation of its fees 
and credits because the proposed rebate is equally available to all 
Floor Brokers which can try to earn the proposed rebate, or not. In 
addition, the rebate is intended to address the unique characteristics 
of MXEA and MXEF that, since their initial listing, have shown 
promising levels of interest and liquidity. The Exchange believes [sic] 
will be enhanced by the rebate, providing for more robust liquidity. As 
such, the rebate is intended to attract more activity to the Exchange. 
This increased order flow would continue to make the Exchange a more 
competitive venue. Thus, the Exchange believes the proposed rule change 
would improve market quality for all market participants on the 
Exchange and, accordingly, attract more order flow to the Exchange 
thereby improving market-wide quality and price discovery.
    Finally, the changes do not unfairly discriminate between market 
participants. Specifically, as it relates to the elimination of the 
fees related to all MSCI options, the Exchange believes that Customer 
and Professional Customer order flow has been integral in attracting 
liquidity and trading interest in the MSCI Options. Moreover, as noted 
above, the elimination of the relevant fees is consistent with the fees 
charged by the Exchange for manual transactions in non-MSCI related 
options. Similarly, the proposed rebate is available to all Floor 
Brokers and is intended to encourage the role performed by Floor 
Brokers in providing robust liquidity to the benefit of all market 
participants.
    Each proposed change takes into account that the Exchange operates 
in a highly competitive market and that it must, therefore, continually 
adjust its fees and rebates to remain competitive with other exchanges 
and to attract order flow to the Exchange. Accordingly, the Exchange 
believes that the proposed rule change reflects this competitive 
environment.

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.
    Intramarket Competition. The elimination of the fees and addition 
of a rebate are designed to attract order flow to the Exchange and 
would apply equally to all similarly situated market participants and 
encourage the important function that Floor Brokers serve in providing 
liquidity and price discovery for all market participants.
    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

[[Page 54782]]

the market share of executed volume of multiply listed equity and ETF 
options trades. Therefore, currently no exchange possesses significant 
pricing power in the execution of multiply listed equity and ETF 
options order flow. More specifically, in June 2026, the Exchange had 
10.41% market share of executed volume of multiply listed equity and 
ETF options order flow.
    The aim of the proposed changes is to attract more orders to the 
Exchange, which would continue to make the Exchange a more competitive 
venue for, among other things, order execution. Thus, the Exchange 
believes the proposed rule change would improve market quality for all 
market participants on the Exchange and, as a consequence, improve 
market-wide quality and price discovery.

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) \15\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \16\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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) \17\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \17\ 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#91e3e4fdf4bcf2fefcfcf4ffe5e2d1e2f4f2bff6fee7"><span class="__cf_email__" data-cfemail="a1d3d4cdc48cc2ceccccc4cfd5d2e1d2c4c28fc6ced7">[email&#160;protected]</span></a>. Please include 
file number SR-NYSEARCA-2026-85 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-NYSEARCA-2026-85. 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 internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing 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-NYSEARCA-2026-85 and should be submitted 
on or before September 14, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-17204 Filed 8-21-26; 8:45 am]
BILLING CODE 8011-01-P


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