[Federal Register Volume 89, Number 147 (Wednesday, July 31, 2024)]
[Notices]
[Pages 61554-61557]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16795]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100588; File No. SR-SAPPHIRE-2024-01]


Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Establish Proprietary Market Data Products

July 25, 2024.
    Pursuant to 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 July 19, 2024, MIAX Sapphire, LLC (``MIAX Sapphire'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II, 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 proposes to establish proprietary market data 
products. The text of the proposed rule change is available on the 
Exchange's website at https://www.miaxglobal.com/markets/us-options/miax-sapphire/rule-filings, at the Exchange'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 establish the MIAX Sapphire Top of Market 
(``ToM'') data feed, MIAX Sapphire Complex Top of Market (``cToM'') 
data

[[Page 61555]]

feed, and MIAX Sapphire Liquidity Feed (``SLF'').
    The proposed ToM data feed will provide market participants with a 
direct data feed that includes the Exchange's best bid \3\ and 
offer,\4\ with aggregate size, and last sale information, based on 
displayable order and quoting interest on the Exchange. The proposed 
ToM data feed will include data that is identical to the data sent to 
the processor for the Options Price Reporting Authority (``OPRA''). The 
ToM and OPRA data will leave the MIAX Sapphire System \5\ at the same 
time, as required under Section 5.2(c)(iii)(B) of the Limited Liability 
Company Agreement of the Options Price Reporting Authority LLC (the 
``OPRA Plan''), which prohibits the dissemination of proprietary 
information on any more timely basis than the same information is 
furnished to the OPRA system for inclusion in OPRA's consolidated 
dissemination of options information. ToM will also contain a feature 
that provides the number of Priority Customer \6\ contracts that are 
included in the size associated with the Exchange's best bid and offer.
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    \3\ The term ``bid'' means a limit order to buy one or more 
options contracts. See Exchange Rule 100.
    \4\ The term ``offer'' means a limit order to sell one or more 
options contracts. See id.
    \5\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See id.
    \6\ The term ``Priority Customer'' means a person or entity that 
(i) is not a broker or dealer in securities, and (ii) does not place 
more than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s). The number of 
orders shall be counted in accordance with Interpretation and Policy 
.01. See id.
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    The proposed cToM data feed will provide subscribers with the same 
information as the ToM data product as it relates to complex orders \7\ 
on the Strategy Book,\8\ i.e., the Exchange's best bid and offer for a 
complex strategy, with aggregate size, based on displayable order and 
quoting interest in the complex strategy on the Exchange. The proposed 
cToM data feed will also provide subscribers with the identification of 
the complex strategies currently trading on MIAX Sapphire; complex 
strategy last sale information; and the status of securities underlying 
the complex strategy (e.g., halted, open, or resumed). cToM will be 
distinct from ToM, and any firm that would like to receive cToM data 
must subscribe to cToM regardless of whether they are a current ToM 
subscriber. ToM subscribers will not be required to subscribe to cToM, 
and cToM subscribers will not be required to subscribe to ToM.
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    \7\ A ``complex order'' is ``any order involving the concurrent 
purchase and/or sale of two or more different options in the same 
underlying security (the `legs' or `components' of the complex 
order), for the same account, in a conforming or non-conforming 
ratio. . . .'' See Exchange Rule 518(a).
    \8\ The term ``complex strategy'' means a particular combination 
of components and their ratios to one another. New complex 
strategies can be created as the result of the receipt of a complex 
order or by the Exchange for a complex strategy that is not 
currently in the System. The Exchange may limit the number of new 
complex strategies that may be in the System at a particular time 
and will communicate this limitation to Members via Regulatory 
Circular. See Exchange Rule 518(a). The ``Strategy Book'' is the 
Exchange's electronic book of complex orders. See Exchange Rule 100. 
The Strategy Book is organized by complex strategy in that 
individual orders for a defined complex strategy are organized 
together in a book that is separate from the orders for a different 
complex strategy.
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    The proposed SLF data product will provide market participants with 
a direct data feed that allows subscribers to receive real-time updates 
of options orders, products traded on MIAX Sapphire, MIAX Sapphire 
System status, and MIAX Sapphire underlying trading status. When an 
order is received or an order state changes, published order 
information will be transmitted over the SLF, including time stamp, 
action, product ID, order ID, order side, order type, order price, 
original order size, open order size, time in force, origin, open or 
close, and route instruction. For complex orders, complex strategy 
definition notification and complex order notice are also included. 
Subscribers to the SLF data feed will get a list of all options symbols 
and strategies that will be traded and sourced on that feed at the 
start of every session.
    The proposed data products provide valuable information that can 
help subscribers make informed investment decisions, and operate in the 
same manner as similar data products offered by the Exchange's 
affiliate, including Miami International Securities Exchange, LLC 
(``MIAX''), namely the MIAX Top of Market data feed (``MIAX ToM''),\9\ 
MIAX Complex Top of Market data feed (``MIAX cToM''),\10\ and the MIAX 
Order Feed (``MIAX MOR'').\11\ The proposed data products also operate 
in the same manner as similar data products offered by the Exchange's 
affiliate, MIAX Emerald, LLC (``MIAX Emerald''), namely the MIAX 
Emerald Top of Market data feed (``Emerald ToM''), MIAX Emerald Complex 
Top of Market data feed (``Emerald cToM''), and the MIAX Emerald Order 
Feed (``Emerald MOR'').\12\
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    \9\ See Securities Exchange Act Release Nos. 69007 (February 28, 
2013), 78 FR 14617 (March 6, 2013) (SR-MIAX-2013-05); 69518 (May 6, 
2013), 78 FR 27462 (May 10, 2013) (SR-MIAX-2013-18); 73395 (October 
21, 2014), 79 FR 63979 (October 27, 2014) (SR-MIAX-2014-53).
    \10\ See Securities Exchange Act Release No. 79146 (October 24, 
2016), 81 FR 75171 (October 28, 2016) (SR-MIAX-2016-36).
    \11\ See Securities Exchange Act Release No. 74759 (April 17, 
2015), 80 FR 22749 (April 23, 2015) (SR-MIAX-2015-28).
    \12\ See Securities Exchange Act Release No. 85207 (February 27, 
2019), 84 FR 7963 (March 5, 2019) (SR-EMERALD-2019-09).
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    The Exchange represents that it will make ToM, cToM, and SLF 
equally available to any market participant that wishes to subscribe to 
any of those products. The Exchange will submit a separate proposed 
rule change for immediate effectiveness pursuant to Section 19(b)(3)(A) 
of the Act \13\ and Rule 19b-4(f)(2) \14\ thereunder to establish fees 
for the ToM, cToM and SLF data feeds. The Exchange notes that its 
affiliate, MIAX Emerald, filed a substantively similar proposal to 
adopt its own market data products--Emerald ToM, Emerald cToM and 
Emerald MOR--prior to offering such products to market participants 
prior to launching operations as a national securities exchange.\15\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(2).
    \15\ See supra note 12.
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2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) \16\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) \17\ of the Act in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
promote just and equitable principles of trade, foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, remove impediments to and perfect the mechanisms of a free 
and open market and a national market system and, in general, protect 
investors and the public interest.
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    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
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    The ToM market data product is designed to promote just and 
equitable principles of trade by providing all subscribers with top of 
market data that includes the Exchange's best bid and offer, with 
aggregate size, and last sale information, based on order and quoting 
interest on the Exchange that should enable them to make informed 
decisions on trading on MIAX Sapphire by using the ToM data to assess 
current market conditions that directly affect such decisions.
    The cToM market data product is designed to promote just and 
equitable principles of trade by providing all subscribers with top of 
market data that includes similar information provided via ToM but for 
the Exchange's complex

[[Page 61556]]

orders on the Strategy Book, including the Exchange's best bid and 
offer for a complex strategy, with aggregate size, based on displayable 
order and quoting interest in the complex strategy on the Exchange that 
should enable subscribers to make informed decisions on trading on MIAX 
Sapphire by using the cToM data to assess current market conditions 
that directly affect such decisions.
    The SLF market data product is designed to promote just and 
equitable principles of trade by providing all subscribers with limit 
order book data that should enable subscribers to make informed 
decisions on trading in MIAX Sapphire options by using the SLF data to 
assess current market conditions that directly affect such decisions. 
The proposed market data product facilitates transactions in 
securities, removes impediments to and perfect the mechanisms of a free 
and open market and a national market system by enhancing the 
subscribers' ability to make decisions on trading strategy, and by 
providing data that should help bring about such decisions in a timely 
manner to the protection of investors and the public interest. The 
market data provided by SLF removes impediments to, and is designed to 
further perfect, the mechanisms of a free and open market and a 
national market system by making the MIAX Sapphire market more 
transparent and accessible to market participants making routing 
decisions concerning their options orders. The SLF market data product 
is also designed to protect investors and the public interest by 
providing data to subscribers that is already currently available on 
other exchanges and will enable MIAX Sapphire to compete with such 
other exchanges, thereby offering market participants with additional 
data in order to seek the market center with the best price and the 
most liquidity on which to execute their transactions, all to the 
benefit of investors and the public interest, and to the marketplace as 
a whole.
    The proposed ToM, cToM, and SLF market data products facilitate 
transactions in securities, remove impediments to and perfect the 
mechanisms of a free and open market and a national market system by 
enhancing the subscriber's ability to make decisions on trading 
strategies and by providing data which should help bring about such 
decisions in a timely manner to benefit the protection of investors and 
the public interest. The market data provided by ToM, cToM, and SLF 
removes impediments to, and is designed to further perfect, the 
mechanisms of a free and open market and a national market system by 
making the MIAX Sapphire market more transparent and accessible to 
market participants making routing decisions concerning their options 
orders. The Exchange notes that these data products are similar to, and 
provide data that is equivalent to, the ToM, cToM, and MOR data 
products for MIAX and MIAX Emerald with respect to options traded on 
those exchanges.\18\ The Exchange believes that it is in the public 
interest to make similar information available with respect to options 
traded on MIAX Sapphire.
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    \18\ See supra notes 9, 10, 11, and 12.
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    The proposed ToM, cToM, and SLF market data products are also 
designed to protect investors and the public interest by providing data 
to subscribers that is already currently available on at least one 
other competing options exchange \19\ and will enable MIAX Sapphire to 
compete with such other exchanges, thereby offering market participants 
with additional data in order to seek the market center with the best 
price and the most liquidity on which to execute their transactions, 
all to the benefit of investors and the public interest, and to the 
marketplace as a whole.
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    \19\ For example, Nasdaq GEMX, LLC (``GEMX'') has similar data 
products to ToM and MOR available for purchase by GEMX users, 
including the Nasdaq GEMX Top Feed and Nasdaq GEMX Order Feed. See 
Nasdaq GEMX Options 7, Pricing Schedule, Section 7, Market Data.
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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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. On the contrary, 
the Exchange believes that the new market data products will enhance 
competition in the U.S. options markets by providing users of MIAX 
Sapphire market data products that are similar to that which are 
currently provided on other competing options exchanges.\20\
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    \20\ Id.
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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

    Because the foregoing proposed rule change does not: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative prior to 30 days from the date on which it was filed, 
or such shorter time as the Commission may designate, if consistent 
with the protection of investors and the public interest, the proposed 
rule change has become effective pursuant to Section 19(b)(3)(A)(iii) 
of the Act \21\ and Rule 19b-4(f)(6) thereunder.\22\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \22\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \23\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\24\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
waiver of the operative delay will enable the Exchange to make the ToM, 
cToM, and SLF market data products available to subscribers at the time 
of the launch of trading on the Exchange, which is scheduled for August 
12, 2024.\25\ The Exchange further states that the proposed rule change 
does not present any new or novel issues because the proposed market 
data products are substantially similar to market data products offered 
by the Exchange's affiliates, MIAX and MIAX Emerald, and by at least 
one other competing options exchange.\26\ For these reasons, and 
because the proposal does not raise any new or novel issues, the 
Commission believes that waiver of the operative delay is consistent 
with the protection of investors and the public interest. Accordingly, 
the Commission hereby waives the 30-day operative

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delay and designates the proposal operative upon filing.\27\
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    \23\ 17 CFR 240.19b-4(f)(6).
    \24\ 17 CFR 240.19b-4(f)(6)(iii).
    \25\ See MIAX Sapphire Options Exchange Trading Alert, 
Regulatory Alert, Technical Alert, dated July 15, 2024, available at 
https://www.miaxglobal.com/alert/2024/07/15/miax-sapphire-options-exchange-july-20th-mock-trading-test-plan-preparation; see also 
Securities Exchange Act Release No. 100539 (July 15, 2024) (File No. 
10-240) (In the Matter of the Application of MIAX Sapphire, LLC for 
Registration as a National Securities Exchange; Findings, Opinion, 
and Order of the Commission) (order approving MIAX Sapphire, LLC for 
registration as a national securities exchange).
    \26\ See supra notes 9, 10, 11, 12 and 19.
    \27\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 under 
Section 19(b)(2)(B) \28\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \28\ 15 U.S.C. 78s(b)(2)(B).
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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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-SAPPHIRE-2024-01 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-SAPPHIRE-2024-01. 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 website (https://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 website 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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-SAPPHIRE-2024-01 and should 
be submitted on or before August 21, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-16795 Filed 7-30-24; 8:45 am]
BILLING CODE 8011-01-P