[Federal Register Volume 81, Number 218 (Thursday, November 10, 2016)]
[Notices]
[Pages 79079-79080]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27155]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79246; File No. SR-MIAX-2016-41]


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

November 4, 2016.
    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 October 27, 2016, 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 ``Fee Schedule'') to delete rule text concerning certain 
transaction fees of limited duration that expire on October 31, 2016.
    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 is proposing to delete rule text concerning certain 
transaction fees of limited duration that expire on October 31, 2016. 
Since the Exchange is not proposing to extend the duration of such 
fees, the fees automatically expire and the associated rule text 
becomes obsolete after October 31, 2016. There are three (3) limited 
duration transaction fees that are expiring on October 31, 2016. The 
first such fee is the $0.12 per contract Posted Liquidity Marketing Fee 
(described below) applicable to options overlying EEM, GLD, IWM, QQQ 
and SPY (the ``designated symbols''), as listed in the Fee Schedule. 
The second such fee is the $0.50 per contract transaction fee 
applicable to orders executed for the account of non-MIAX market makers 
in options overlying the designated symbols. The third such fee is the 
discounted $0.48 per contract transaction fee applicable to orders 
executed for the account of non-MIAX market makers in options overlying 
the designated symbols applicable to any Member or its Affiliate that 
qualifies for the Priority Customer Rebate Program (``PCRP'') Volume 
Tier 3 or Higher, as discussed below.
    First, Marketing Fees are currently assessed on certain 
transactions of all MIAX Market Makers.\3\ Currently, Section (1)(b) of 
the Fee Schedule provides that the Exchange will assess a Marketing Fee 
to all Market Makers for contracts, including mini options, they 
execute in their assigned classes in simple or complex order executions 
when the contra-party to the execution is a Priority Customer. The 
Marketing Fee in complex order executions will be assessed per contract 
(whether the transaction executes in a strategy match, complex auction, 
or by legging into the Book). MIAX does not assess a Marketing Fee to 
Market Makers for contracts executed as a PRIME Agency Order, Contra-
side Order, Qualified Contingent Cross Order, PRIME Participating Quote 
or Order, or a PRIME AOC Response in the PRIME Auction, unless it 
executes against an unrelated order.
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    \3\ See Fee Schedule, Section (1)(b), entitled ``Marketing Fee'' 
for more detail regarding the Marketing Fee.
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    The Exchange also currently assesses, for a limited duration (for 
transactions that occur on or after September 1, 2016 and extending 
through October 31, 2016), in simple order executions, an additional 
$0.12 per contract Posted Liquidity Marketing Fee to all Market Makers 
for any standard options overlying the designated symbols that Market 
Makers execute in their assigned class when the contra-party to the 
execution is a Priority Customer and the Priority Customer order was 
posted on the MIAX Book at the time of the execution.\4\ Since the 
Exchange is not proposing to extend the duration of the additional 
$0.12 per contract fee, such fee automatically expires and the 
associated rule text becomes obsolete after October 31, 2016. 
Accordingly, the Exchange is deleting the associated rule text 
regarding the Posted Liquidity Marketing Fee in Section (1)(b) and 
footnote 15. As a result of the deletion of footnote 15, all subsequent 
footnotes in Fee Schedule have been renumbered.
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    \4\ For a complete description of the Posted Liquidity Marketing 
Fee, see Securities Exchange Act Release No. 73848 (December 16, 
2014), 79 FR 76421 (December 22, 2014) (SR-MIAX-2014-62); see also 
Securities Exchange Act Release No. 78781 (September 7, 2016), 81 FR 
62942 (September 13, 2016) (SR-MIAX-2016-30).
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    Second, the Exchange currently assesses transaction fees on Members 
for orders that are executed for the account of non-MIAX market 
makers.\5\ Currently, Section (1)(a)(ii) of the Fee Schedule provides 
that the Exchange will assess a $0.47 per contract transaction fee for 
simple and complex order executions for the account of non-MIAX market 
makers in standard options that are in the Penny Pilot Program.\6\ 
However, for a limited duration (for transactions that occur on or 
after September 1, 2016 and extending through October 31, 2016), for 
any standard options overlying the designated symbols, the Exchange 
assesses a $0.50 per contract transaction fee (in lieu of the $0.47 per 
contract transaction fee) for simple order executions for the account 
of non-MIAX market makers in standard options that are in the Penny 
Pilot Program. Since the Exchange is not proposing to extend the 
duration of the $0.50 per contract transaction fee, such fee 
automatically expires and the associated rule text becomes obsolete 
after October 31, 2016. Accordingly, the Exchange is deleting the 
associated rule text in footnote 8 to the Fee Schedule. If, however, a 
Member or its Affiliate qualifies for the PCRP Volume Tier 3 or Higher, 
such Member is currently assessed a

[[Page 79080]]

discounted transaction fee. Pursuant to footnote 8 of the Fee Schedule, 
for a Member in the PCRP, the Exchange will assess a $0.45 per contract 
transaction fee for simple and complex order executions for the account 
of non-MIAX market makers in standard options that are in the Penny 
Pilot Program. However, for a limited duration (for transactions that 
occur on or after September 1, 2016 and extending through October 31, 
2016), for any standard options overlying the designated symbols, the 
Exchange assesses a $0.48 per contract transaction fee (in lieu of the 
$0.45 per contract transaction fee) for simple order executions for the 
account of non-MIAX market makers in standard options that are in the 
Penny Pilot Program. Since the Exchange is not proposing to extend the 
duration of the $0.48 per contract transaction fee, such fee 
automatically expires and the associated rule text becomes obsolete 
after October 31, 2016. Accordingly, the Exchange is deleting the 
associated rule text in footnote 8 to the Fee Schedule.
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    \5\ A non-MIAX market maker is a market maker registered as such 
on another options exchange. See the table under Section (1)(a)(ii) 
of the Fee Schedule.
    \6\ See Securities Exchange Act Release No. 72988 (September 4, 
2014), 79 FR 53808 (September 10, 2014) (SR-MIAX-2014-46).
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    The Exchange is proposing that this rule change become operative 
November 1, 2016.
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 that it is an 
equitable allocation of reasonable dues, fees, and other charges among 
its Members and issuers and other persons using its facilities, and 
6(b)(5) of the Act,\9\ in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, to remove 
impediments to and perfect the mechanisms of a free and open market and 
a national market system and, in general, to protect investors and the 
public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(1) and (b)(5).
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    The proposed deletions of all rule text regarding the three (3) 
limited duration transaction fees that are expiring on October 31, 2016 
(the $0.12 per contract Posted Liquidity Marketing Fee in the 
designated symbols; the $0.50 per contract transaction fee applicable 
to orders executed for the account of non-MIAX market makers in the 
designated symbols; and the discounted $0.48 per contract transaction 
fee applicable to orders executed for the account of non-MIAX market 
makers in options overlying in the designated symbols applicable to any 
Member or its Affiliate that qualifies for the PCRP Volume Tier 3 or 
Higher) are fair, equitable, and not unreasonably discriminatory 
because such fees are no longer in effect after October 31, 2016, and 
the corresponding rule text is therefore obsolete and unnecessary to 
remain in the Fee Schedule.

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

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.
    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 to the 
Exchange. The Exchange believes that the proposed rule change reflects 
this competitive environment because it applies equally to all 
similarly situated MIAX participants.

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\ and Rule 19b-4(f)(2)\11\ thereunder. 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).
    \11\ 17 CFR 240.19b-4(f)(2).
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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-2016-41 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 20549-1090.

All submissions should refer to File Number SR-MIAX-2016-41. 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-2016-41, and should be 
submitted on or before December 1, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-27155 Filed 11-9-16; 8:45 am]
 BILLING CODE 8011-01-P