[Federal Register Volume 78, Number 228 (Tuesday, November 26, 2013)]
[Notices]
[Pages 70615-70616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-28271]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70903; File No. SR-MIAX-2013-52]


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

November 20, 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 November 12, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 (the ``Fee Schedule'').
    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 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 Exchange proposes to amend the MIAX Options Fee Schedule (the 
``Fee Schedule'') to offer additional Limited Service MEI Ports to 
Market Makers.
    Currently, MIAX assesses monthly MEI Port Fees on Market Makers 
based upon the number of MIAX matching engines \3\ used by the Market 
Maker. MEI Port users are allocated two Full Service MEI Ports \4\ and 
two Limited Service MEI Ports \5\ per matching engine to which they 
connect. The Exchange currently assesses a fee of $1,000 per month on 
Market Makers for the first matching engine they use; $500 per month 
for each of matching engines 2 through 5; and $250 per month for each 
of matching engines 6 and above. For example, a Market Maker that 
wishes to make markets in just one symbol would require the two MEI 
Ports in a single matching engine; a Market Maker wishing to make 
markets in all symbols traded on MIAX would require the two MEI Ports 
in each of the Exchange's matching engines. The MEI Port includes 
access to MIAX's primary and secondary data centers and its disaster 
recovery center.
---------------------------------------------------------------------------

    \3\ 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). 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.
    \4\ Full Service MEI Ports provide Market Makers with the 
ability to send Market Maker quotes, eQuotes, and quote purge 
messages to the MIAX System. Full Service MEI Ports are also capable 
of receiving administrative information. Market Makers are limited 
to two Full Service MEI Ports per matching engine.
    \5\ Limited Service MEI Ports provide Market Makers with the 
ability to send eQuotes and quote purge messages only, but not 
Market Maker Quotes, to the MIAX System. Limited Service MEI Ports 
are also capable of receiving administrative information. Market 
Makers initially receive two Limited Service MEI Ports per matching 
engine.
---------------------------------------------------------------------------

    The Exchange recently added the Limited Service MEI Ports to 
enhance the MEI Port connectivity made available to Market Makers.\6\ 
Limited Service MEI Ports have been well received by Market Makers thus 
far. The Exchange now proposes to make

[[Page 70616]]

available to Market Makers additional Limited Service MEI Ports per 
matching engine in addition to the current two Limited Service MEI 
Ports per matching engine. The Exchange proposes to charge $10 per 
month for each additional Limited Service MEI Port per matching engine. 
Market Makers will be limited to two additional Limited Service MEI 
Ports per matching engine, for a total of four per matching engine. The 
Exchange proposes making a corresponding change to specify that Market 
Makers initially receive two Limited Service Ports per engine, and that 
they will be limited to two additional Limited Service MEI Ports per 
matching engine, for a total of four per matching engine. As with the 
existing Full Service MEI Ports and Limited Service MEI Ports, the 
additional Limited Service MEI Port includes access to MIAX's primary 
and secondary data centers and its disaster recovery center.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 70137 (August 8, 
2013), 78 FR 49586 (August 14, 2013) (SR-MIAX-2013-39).
---------------------------------------------------------------------------

    The purpose of this amendment to the Fee Schedule is to provide 
Market Makers with the technical flexibility to connect additional 
Limited Service Ports to independent servers that host their eQuote and 
purge functionality. The Exchange believes that the additional ports 
will help Market Makers mitigate the risk of using the same server for 
all of their Market Maker quoting activity. By using the Limited 
Service MEI Ports for risk purposes, Market Makers can place purge 
functionality on a different server than the Market Maker quoting 
server (via the Limited Service MEI Ports), which provides them a 
failsafe for getting out of the market in case they have an issue with 
the quote server. Additionally, Market Makers may opt to use the 
Limited Service MEI Ports to submit eQuotes. Because eQuotes are 
frequently generated by a different algorithm that determines when to 
respond to an auction message, the additional ports enable Market 
Makers to connect to a different server that processes auctions and 
eQuotes rather than forcing them to use their Market Maker Standard 
quote server as a gateway for communicating eQuotes to MIAX.
2. Statutory Basis
    The Exchange believes that its proposal to amend its fee schedule 
is consistent with Section 6(b) of the Act \7\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \8\ in particular, in that 
it is an equitable allocation of reasonable fees and other charges.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that the proposal is reasonable and not 
unfairly discriminatory because only Market Makers that decide that 
they need additional Limited Service MEI Ports will be charged the 
additional fee. The Exchange further believes that the availability of 
the additional Limited Service MEI Ports is equitable and not unfairly 
discriminatory because it enhances the MIAX System and marketplace by 
helping Market Makers to better manage risk, thus preserving the 
integrity of the MIAX markets, all to the benefit of and protection of 
investors and the public as a whole.

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.
    On the contrary, MIAX believes that the additional protection 
provided to Market Makers and the investing public should enhance 
competition by attracting liquidity and order flow to the Exchange.

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

    Written comments were neither solicited nor 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.\9\ 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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-2013-52 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-2013-52. 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 the filing also will be available 
for inspection and copying at the principal office 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-2013-52 and should be 
submitted on or before December 17, 2013.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-28271 Filed 11-25-13; 8:45 am]
BILLING CODE 8011-01-P