[Federal Register Volume 79, Number 134 (Monday, July 14, 2014)]
[Notices]
[Pages 40820-40822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-16372]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72566; File No. SR-MIAX-2014-32]


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

July 8, 2014.
    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 June 25, 2014, 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 its 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.

[[Page 40821]]

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

1. Purpose
    The Exchange proposes to establish a $0.45 transaction fee for 
executions in standard option contracts and $0.045 transaction fee for 
Mini Option contracts for non-member broker-dealers on the Exchange.
    The current transaction fees for non-member broker-dealers on the 
Exchange are $0.30 per contract for standard options or $0.03 for Mini 
Options.\3\ In February 2014, the Exchange lowered the transaction fees 
for non-member broker-dealers from $0.45 per contract for standard 
options or $0.045 for Mini Options to the current rates.\4\ The 
Exchange lowered the non-member broker-dealer fees in order to enhance 
the Exchange's competitiveness with other option exchanges and to 
strengthen its market quality. The Exchange believed that the 
transaction fees would increase both intermarket and intramarket 
competition by incenting broker-dealers on other exchanges to direct 
additional orders to the Exchange to allow the Exchange to compete more 
effectively with other options exchanges for such transactions. 
However, after several months experience with the lower transaction fee 
rate for non-member broker-dealers, the Exchange has noticed a limited 
impact on the Exchange's competitiveness for non-member broker-dealer 
transactions. The Exchange now proposes increasing the non-member 
broker-dealer transaction fees in order to bring the fee rates back in 
line with the current non-MIAX market maker fee rates and to generate 
additional revenue. As proposed, both non-member broker-dealers and 
non-MIAX market makers would be charged $0.45 transaction fee for 
executions in standard option contracts and $0.045 transaction fee for 
Mini Option contracts. The proposal will also bring the non-member 
broker-dealer transaction fee rates back in line with the same fee rate 
available on other options exchanges.\5\
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    \3\ See MIAX Options Fee Schedule, Section 1(a)(ii)--Other 
Market Participant Transaction Fees.
    \4\ See Securities Exchange Act Release No. 71502 (February 6, 
2014), 79 FR 8519 (February 12, 2014) (SR-MIAX-2014-06).
    \5\ See Chicago Board Options Exchange, Incorporated, Fees 
Schedule, p. 1; International Securities Exchange, LLC, Schedule of 
Fees, p. 6.
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    The Exchange proposes to implement the new transaction fees 
beginning July 1, 2014.
2. Statutory Basis
    The Exchange believes that its proposal to amend its fee schedule 
is consistent with Section 6(b) of the Act \6\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \7\ in particular, in that 
it is an equitable allocation of reasonable fees and other charges 
among Exchange members.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposal is fair, equitable and not 
unreasonably discriminatory [sic]. The proposal is reasonable because 
it results in an increase in non-member broker-dealer transactions fees 
for all non-member broker-dealers on the Exchange and results in a 
transaction fee rate that is identical to the similar transaction fees 
on other competing options exchanges. The proposed fees are fair and 
equitable and not unreasonably discriminatory [sic] because they will 
apply equally to all non-member broker-dealers. All non-member broker-
dealers will be subject to the same transaction fee, and access to the 
Exchange is offered on terms that are not unfairly discriminatory. The 
proposed fees are equitable and not unreasonably discriminatory [sic] 
because it eliminates the previous disparate treatment in transaction 
fees between non-member broker-dealers and non-MIAX market makers by 
increasing the non-member broker-dealer transaction fees to bring the 
fee rates back in line with the current non-MIAX market maker fee 
rates.
    In addition, the Exchange believes that increasing the non-member 
broker-dealer transaction fees which results in charging non-member 
broker-dealers more for transactions than for Members, is a fair and 
equitable allocation of reasonable fees, and not unreasonably 
discriminatory [sic]. Charging non-members higher transaction fees is a 
common practice amongst exchanges because Members are subject to other 
fees and dues associated with their membership to the Exchange that do 
not apply to non-members. To the extent that there is additional 
competitive burden on non-member broker-dealers, the Exchange believes 
that this is appropriate because the proposal could incent non-member 
broker-dealers to apply to be Members of the exchange, which is open to 
all market participants equally on terms that are not unfairly 
discriminatory.

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

    The Exchange 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. The proposed fee will allow the 
Exchange to increase revenue while remaining competitive with other 
exchanges by changing its rate to the same level. The Exchange believes 
that the proposal should promote competition between non-member broker-
dealers and non-MIAX market makers by eliminating the previous 
disparate treatment in transaction fees between non-member brokers and 
non-MIAX market makers by increasing the non-member broker-dealer 
transaction fees to bring the fee rates back in line with the current 
non-MIAX market maker fee rates. To the extent that there is additional 
competitive burden on non-member broker dealers, the Exchange believes 
that this is appropriate because the proposal could incent non-member 
broker-dealers to apply to be Members of the exchange, which is open to 
all market participants equally on non-discriminatory terms. The 
Exchange notes that it operates in a highly competitive market in which 
market participants can readily favor competing venues 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. The Exchange believes 
that the proposal reflects this competitive environment.

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.\8\ 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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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).

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[[Page 40822]]

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-2014-32 on the subject line.
    Paper Comments
     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-MIAX-2014-32. 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-2014-32 and should be 
submitted on or before August 4, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-16372 Filed 7-11-14; 8:45 am]
BILLING CODE 8011-01-P