[Federal Register Volume 80, Number 51 (Tuesday, March 17, 2015)]
[Notices]
[Pages 13938-13940]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-06009]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74478; File No. SR-MIAX-2015-16]


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

March 11, 2015
    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 February 27, 2015, 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.
    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 its Fee Schedule to: (i) Increase 
the transaction fees for Public Customers

[[Page 13939]]

that are not a Priority Customer and Firms; and (ii) modify the 
transaction fees for non-Priority Customers and Firms for achieving 
certain Priority Customer Rebate Program volume tiers. The proposed 
changes are based on the similar fees of other competing options 
exchange.\3\
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    \3\ See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; NYSE 
Amex Options Fee Schedule, p. 6; Chicago Board Options Exchange, 
Incorporated, Fee Schedule, p.1. See also Securities Exchange Act 
Release No. 68556 (January 2, 2013), 78 FR 1293 (January 8, 2013) 
(SR-BX-2012-074).
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    The Exchange proposes to increase the transaction fees for Public 
Customers that are not a Priority Customer and Firms. Specifically, the 
Exchange proposes to assess the following fees for transactions for 
Public Customers that are not a Priority Customer: (i) $0.47 per 
contract for standard options and $0.05 per contract for mini options 
in Penny Pilot options classes; and (ii) $0.62 per contract for 
standard options and $0.06 per contract for mini options in non-Penny 
Pilot options classes. In addition, the Exchange proposes to assess the 
following fees for transactions for Firms: (i) $0.37 per contract for 
standard options and $0.04 per contract for mini options in Penny Pilot 
options classes; and (ii) $0.42 per contract for standard options and 
$0.04 per contract for mini options in non-Penny Pilot options classes.
    The Exchange proposes to continue to offer Public Customers that 
are not a Priority Customer and Firms the opportunity to reduce 
transaction fees by $0.02 per contract in standard options in both 
Penny Pilot and non-Penny Pilot options classes.\4\ Specifically, any 
Member or its affiliates of at least 75% common ownership between the 
firms as reflected on each firm's Form BD, Schedule A, that qualifies 
for Priority Customer Rebate Program volume tiers 3, 4, or 5 and is a 
Public Customer that are not a Priority Customer will be assessed $0.45 
per contract for standard options in Penny Pilot options classes and 
$0.60 per contract for standard options in non-Penny Pilot options 
classes. Further, any Member or its affiliates of at least 75% common 
ownership between the firms as reflected on each firm's Form BD, 
Schedule A, that qualifies for Priority Customer Rebate Program volume 
tiers 3, 4, or 5 and is a Firm will be assessed $0.35 per contract for 
standard options in Penny Pilot options classes and $0.40 per contract 
in non-Penny Pilot options classes. The Exchange believes that these 
incentives will encourage Public Customers that are not a Priority 
Customer and Firms to transact a greater number of orders on the 
Exchange.
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    \4\ See Securities Exchange Release Nos. 72988 (September 4, 
2014), 79 FR 53808 (September 10, 2014) (SR-MIAX-2014-46); 72989 
(September 4, 2014), 79 FR 53792 (September 10, 2014) (SR-MIAX-2014-
47).
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    The Exchange proposes to implement the new transaction fees 
beginning March 1, 2015.
2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \5\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act \6\ in particular, in that it 
is an equitable allocation of reasonable fees and other charges among 
Exchange members.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange's proposal to increase the transaction fees for Public 
Customers that are not a Priority Customer and Firms is reasonable 
because the Exchange's fees will remain competitive with fees at other 
options exchanges.\7\ The Exchange's proposal to increase the 
transaction fees for Public Customers that are not a Priority Customer 
and Firms is equitable and not unfairly discriminatory because the 
increase applies equally to all such market participants. The Exchange 
does not assess Priority Customers transactions fees because Priority 
Customer order flow enhances liquidity on the Exchange for the benefit 
of all market participants. Priority Customer liquidity benefits all 
market participants by providing more trading opportunities, which 
attracts Market Makers and other market participants. An increase in 
the activity of these market participants in turn facilitates tighter 
spreads, which may cause an additional corresponding increase in order 
flow from other market participants. Market Makers are assessed lower 
transaction fees as compared to Public Customers that are not a 
Priority Customer, Non-MIAX Market Makers, Non-Member Broker-Dealers, 
and Firms because they have obligations to the market and regulatory 
requirements, which normally do not apply to other market 
participants.\8\ They have obligations to make continuous markets, 
engage in a course of dealings reasonably calculated to contribute to 
the maintenance of a fair and orderly market, and not make bids or 
offers or enter into transactions that are inconsistent with a course 
of dealings. In addition, 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. The proposed differentiation as 
between Public Customer that is not a Priority Customer, Firms, and 
other market participants recognizes the differing contributions made 
to the liquidity and trading environment on the Exchange by these 
market participants.
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    \7\ See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; NASDAQ 
Options Market LLC's Pricing Schedule, Chapter XV.
    \8\ See Exchange Rules 603 and 604.
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    The Exchange's proposal to offer Public Customers that are not a 
Priority Customer and Firms the opportunity to reduce transaction fees 
by $0.02 per contract in standard options, provided certain criteria 
are met, is reasonable because the Exchange desires to offer all such 
market participants an opportunity to lower their transaction fees. The 
Exchange's proposal to offer Public Customers that are not a Priority 
Customer and Firms the opportunity to reduce transaction fees by $0.02 
per contract in standard options, provided certain criteria are met, is 
equitable and not unfairly discriminatory because the Exchange will 
offer all market participants, excluding Priority Customers, a means to 
reduce transaction fees by qualifying for volume tiers in the Priority 
Customer Rebate Program. The Exchange believes that offering all such 
market participants the opportunity to lower transaction fees by 
incentivizing them to transact Priority Customer order flow in turn 
benefits all market participants.
    The Exchange believes that the proposal to allow the aggregation of 
trading activity of separate Members or its affiliates for purposes of 
the fee reduction is fair, equitable and not unreasonably 
discriminatory. The Exchange believes the proposed rule change is 
reasonable because it would allow aggregation of the trading activity 
of separate Members or its affiliates for purposes of the fee reduction 
only in very narrow circumstances, namely, where the firm is an 
affiliate, as defined herein. Furthermore, other exchanges, as well as 
MIAX, have rules that permit the aggregation of the trading activity of 
affiliated entities for the purposes of calculating and assessing 
certain fees. The Exchange believes that offering all such market 
participants the opportunity to lower transaction fees by incentivizing 
them to transact Priority Customer order flow in turn benefits all 
market participants.
    The Exchange believes that its proposal to assess transaction fees 
in non-Penny Pilot options classes, which differs from Penny Pilot 
options classes, is consistent with other options markets

[[Page 13940]]

that also assess different transaction fees for non-Penny Pilot options 
classes as compared to Penny Pilot options classes. The Exchange 
believes that establishing different pricing for non-Penny Pilot 
options and Penny Pilot options is reasonable, equitable, and not 
unfairly discriminatory because Penny Pilot options are more liquid 
options as compared to non-Penny Pilot options. Additionally, other 
competing options exchanges differentiate pricing in the similar manner 
today.\9\
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    \9\ See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; NYSE 
Amex Options Fee Schedule, p. 6; Chicago Board Options Exchange, 
Incorporated, Fee Schedule, p. 1. See also Securities Exchange Act 
Release No. 68556 (January 2, 2013), 78 FR 1293 (January 8, 2013) 
(SR-BX-2012-074).
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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 proposal is similar to the 
transaction fees found on other options exchanges; therefore, the 
Exchange believes the proposal is consistent with robust competition by 
increasing the intermarket competition for order flow from market 
participants. The proposal more closely aligns the fees for Public 
Customers that is not a Priority Customer and Firms to those of non-
MIAX Market Makers and non-Member Broker-dealers. To the extent that 
there is additional competitive burden on non-member market 
participants, the Exchange believes that this is appropriate because 
charging non-members higher transaction fees is a common practice 
amongst exchanges and 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 market participants that are Public Customer not Priority Customers 
or Firms, the Exchange believes that this is appropriate because the 
proposal should incent Members to direct additional order flow to the 
Exchange and thus provide additional liquidity that enhances the 
quality of its markets and increases the volume of contracts traded 
here. To the extent that this purpose is achieved, all the Exchange's 
market participants should benefit from the improved market liquidity. 
Enhanced market quality and increased transaction volume that results 
from the anticipated increase in order flow directed to the Exchange 
will benefit all market participants and improve competition on the 
Exchange. 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.\10\ 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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    \10\ 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-2015-16 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549.

All submissions should refer to File Number SR-MIAX-2015-16. 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 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-2015-16 and should be 
submitted on or before April 7, 2015.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Brent J. Fields,
Secretary.
[FR Doc. 2015-06009 Filed 3-16-15; 8:45 am]
BILLING CODE 8011-01-P