[Federal Register Volume 78, Number 26 (Thursday, February 7, 2013)]
[Notices]
[Pages 9098-9100]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02747]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68817; File No. SR-MIAX-2013-03]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Amend the MIAX Options Fee Schedule

February 1, 2013.
    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on January 29, 2013, Miami International 
Securities Exchange LLC (``MIAX'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by the Exchange. 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\ 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 is filing a proposal to amend the MIAX Options Fee 
Schedule (``Fee Schedule'') to establish fees for the MIAX Clearing 
Trade Drop Port, a connection to a messaging interface that will 
provide real-time trade clearing information to the participants to a 
trade on MIAX and to the participants' respective clearing firms.
    While changes to the Fee Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated these changes to be 
operative on February 1, 2013.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.miaxoptions.com/filter/wotitle/rule_filing, at 
MIAX's principal office, 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 Exchange 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 these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set

[[Page 9099]]

forth in sections A, B, and C below, of the most significant aspects of 
such statements.

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

1. Purpose
    The purpose of the proposed rule change is to establish a single 
monthly port fee of $0.0030 per executed contract for the MIAX Clearing 
Trade Drop (``CTD''), a messaging interface that will provide real-time 
trade clearing information to the participants to a trade on MIAX and 
to the participants' respective clearing firms. The Exchange proposes 
to assess a single per-contract monthly fee to entitled users of the 
ports, regardless of the number of ports used by a Member or member 
organization, their clearing firms, and other third-party entities as 
requested by the Member.
    The Exchange originally filed SR-MIAX-2013-03 on January 17, 2013. 
The instant proposal replaces that filing in its entirety.
    MIAX currently assesses fees for Exchange access and services used 
by Members, Service Bureaus \3\ and Extranet Providers.\4\ Such 
Exchange access is gained through ``Ports.'' MIAX currently assesses 
monthly Port Fees for the Financial Information Exchange (``FIX'') \5\ 
on Electronic Exchange Members (``EEMs''),\6\ based upon the number of 
FIX Ports used by the EEM submitting orders to MIAX. MIAX also 
currently assesses monthly Port Fees for the MIAX Express Interface 
(``MEI'') \7\ on Market Makers, based upon the number of MIAX matching 
engines \8\ used by the Market Maker, which allows Market Makers to 
submit electronic quotes to the Exchange.
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    \3\ A Service Bureau is a technology provider that offers and 
supplies technology and technology services to a trading firm that 
does not have its own proprietary system. The technology and 
technology services supplied by Service Bureaus includes both 
software applications and connectivity, thus Service Bureaus are 
subject to both API testing and certification and Network testing 
and certification.
    \4\ An Extranet Provider is a technology provider that connects 
with MIAX systems and in turn provides such connectivity to MIAX 
participants that do not connect directly with MIAX. Extranet 
Providers do not provide software interfaces with MIAX software 
applications, thus Extranet Providers are not subject to API testing 
and certification.
    \5\ A FIX Port allows EEMs Members to electronically send orders 
in all products traded on the Exchange.
    \6\ The term ``Electronic Exchange Member'' means the holder of 
a Trading Permit who is not a Market Maker. Electronic Exchange 
Members are deemed ``members'' under the Act. See Exchange Rule 100.
    \7\ MEI is a connection to MIAX systems that enables Market 
Makers to submit electronic quotes to MIAX.
    \8\ A ``matching engine'' is a part of the MIAX electronic 
system that processes options quotes and trades on a symbol-by-
symbol basis. Some matching engines will process option classes with 
multiple root symbols, and other matching engines will be dedicated 
to one single option root symbol (for example, options on SPY will 
be processed by one single matching engine that is dedicated only to 
SPY options). A particular root symbol may only be assigned to a 
single designated matching engine. A particular root symbol may not 
be assigned to multiple matching engines.
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    MIAX proposes to establish a new Port Fee for the MIAX CTD. CTD 
provides Exchange Members, their clearing firms, and other third-party 
entities as requested by the Member with real-time clearing trade 
updates. The updates contain the Member's clearing trade messages on a 
low latency, real-time basis. The trade messages are routed to a CTD 
connection containing certain information. The information includes, 
among other things, the following: (i) Trade date and time; (ii) symbol 
information; (iii) trade price/size information; (iv) member type (for 
example, and without limitation, Market Maker, Electronic Exchange 
Member, Broker-Dealer); and (v) Exchange Member Participant Identifier 
(``MPID'') for each side of the transaction, including clearing member 
MPID.
    MIAX will assess a CTD fee of $0.0030 per executed contract side 
for real-time clearing information that is transmitted to one or more 
CTD ports to which users of such CTD ports are entitled. The executing 
Member or member organization, their clearing firms, and other third-
party entities as requested by the Member are entitled to the use of 
the CTD port(s) by way of using the executing or clearing member's 
MPID, OCC Numbers, and/or CMTA Number.
    Unlike FIX and MEI Port Fees, the CTD Port Fee will not be based on 
the number of Ports or connections a Member or member organization has; 
instead, the CTD Port Fee will be assessed monthly, based upon the 
number of contracts executed and cleared in the affected month that are 
sent through the CTD port(s) used by the entitled executing or clearing 
Member or member organization, their clearing firms, and other third-
party entities as requested by the Member, regardless of the number of 
ports or connections used by the Member or member organization. The 
Exchange intends to assess the fee for the data and information used in 
trading options contracts and ongoing entitlement management and 
configuration, and not for the amount of connectivity to which the 
Member or member organization subscribes.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \9\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \10\ in particular, in 
that it is an equitable allocation of reasonable fees and other charges 
among Exchange members.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that this amendment is equitable and not 
unfairly discriminatory because the Exchange is uniformly assessing the 
CTD fees on all members and member organizations that wish to subscribe 
to it.
    The Exchange believes that the proposed CTD Port Fee is reasonable 
because it is within the range of similar fees charged by other 
exchanges, as cited below, and because the CTD data is offered as an 
optional service for members and member organizations who wish to 
obtain the data on a real-time basis.

B. Self-Regulatory Organization's Statement on Burden on Competition

    MIAX does not believe that the proposed rule change will impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act. Unilateral action by MIAX in establishing fees 
for services provided to its Members and others using its facilities 
will not have an impact on competition. As a new entrant in the already 
highly competitive environment for equity options trading, MIAX does 
not have the market power necessary to set prices for services that are 
unreasonable or unfairly discriminatory in violation of the Act. MIAX's 
proposed CTD Port Fee, as described herein, is comparable to fees 
charged by other options exchanges for the same or similar 
services.\11\
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    \11\ For example, NASDAQ OMX PHLX LLC (``PHLX'') charges a Real-
time Risk Management Fee of $.0030 per contract for members and 
member organizations receiving information on a real-time basis up 
to a maximum of two ports. See PHLX Pricing Schedule, Section 
VII(B). The MIAX proposal is also to assess a $0.0030 per contract 
fee for real-time information to CTD users, regardless of, and with 
no limitation on, the number of CTD Ports used.
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    Additionally, the CTD Port is offered as an additional service for 
members and member organizations at a price that is equal to or within 
the range of prices for similar ports offered by other exchanges, and 
therefore the Exchange believes that the price of the port fee does not 
impose a burden on competition.

[[Page 9100]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants or Others

    Written comments were neither 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.\12\ 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 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 to determine whether the 
proposed rule should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MIAX-2013-03 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-MIAX-2013-03. 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 Web site (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 Web site 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 such filing also will be available 
for inspection and copying at the principal offices of the Exchange. 
All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-MIAX-2013-03, 
and should be submitted on or before February 28, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
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    \13\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2013-02747 Filed 2-6-13; 8:45 am]
BILLING CODE 8011-01-P