[Federal Register Volume 89, Number 165 (Monday, August 26, 2024)]
[Notices]
[Pages 68486-68488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-19012]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100779; File No. SR-SAPPHIRE-2024-12]


Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Fee Schedule for a Sales Value Fee and Web CRD Fees

August 20, 2024.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on August 6, 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\ 15 U.S.C. 78a.
    \3\ 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 Sapphire 
Options Fee Schedule (the ``Fee Schedule'') to establish Section 2, 
Regulatory Fees. Specifically, Section 2 of the Fee Schedule will 
contain: a Sales Value Fee for MIAX Sapphire Members in Section 2) a); 
\4\ Section 2) b) which the Exchange is proposing to reserve to be 
amended by a later proposal; and Web Central Registration Depository 
(``Web CRD'') Fees in Section 2) c). MIAX Sapphire will commence 
operations as a national securities exchange registered under Section 6 
of the Act \5\ on August 12, 2024.\6\
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    \4\ The term ``Member'' means an individual or organization 
approved to exercise the trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100 and the Definitions section of the Fee Schedule.
    \5\ 15 U.S.C. 78f.
    \6\ See Securities Exchange Act Release No. 100539 (July 15, 
2024), 89 FR 58848 (July 19, 2024) (File No. 10-240) (order 
approving application of MIAX Sapphire, LLC for registration as a 
national securities exchange).
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    While changes to the Fee Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated these changes to be 
operative on August 12, 2024.
    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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to establish 
Section 2, Regulatory Fees. Specifically, Section 2 of the Fee Schedule 
will contain: Sales Value Fee for MIAX Sapphire Members in Section 2) 
a); Section 2) b) which the Exchange is proposing to reserve to be 
amended by a later proposal; and Web CRD Fees in Section 2) c).
    MIAX Sapphire will commence operations as a national securities 
exchange registered under Section 6 of the Act \7\ on August 12, 
2024.\8\
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    \7\ 15 U.S.C. 78f.
    \8\ See Securities Exchange Act Release No. 100539 (July 15, 
2024), 89 FR 58848 (July 19, 2024) (File No. 10-240) (order 
approving application of MIAX Sapphire, LLC for registration as a 
national securities exchange).
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Sales Value Fee
    The Exchange proposes to amend the Fee Schedule to adopt Section 2) 
a) Sales Value Fee.\9\ The Sales Value Fee is proposed to be assessed 
by the Exchange to each Member for sales on the Exchange with respect 
to which the Exchange is obligated to pay a fee to the Commission 
pursuant to Section 31 of the Exchange Act. The Sales Value Fee is 
equal to the Section 31 fee rate multiplied by the Member's aggregate 
dollar amount of covered sales resulting from options transactions 
occurring on the Exchange during any computational period. The Section 
31 fee rate is set annually by the United States Securities and 
Exchange Commission (``Commission''). To the extent that there may be 
any excess monies collected under this rule, the Exchange may retain 
those monies to help fund general operating expenses. The sales 
transactions to which the fee applies are sales of options (other than 
options on a security index) and the sales of securities resulting from 
the exercise of physical-delivery options. The fee is collected 
indirectly from Members through their clearing firms by the Options 
Clearing Corporation (``OCC'') on behalf of MIAX Sapphire with respect 
to option sales and options exercises. The Sales Value Fee proposed by 
the Exchange is identical to the fee assessed by other exchanges, 
including the Exchange's affiliates, Miami International Securities 
Exchange, LLC (``MIAX Options''),\10\ MIAX PEARL, LLC (``MIAX Pearl 
Options''),\11\ and MIAX Emerald, LLC (``MIAX Emerald'').\12\
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    \9\ See Exchange Rule 1207.
    \10\ See MIAX Options Exchange Fee Schedule at https://www.miaxglobal.com/markets/us-options/miax-options/fees.
    \11\ See MIAX Pearl Options Exchange Fee Schedule at https://www.miaxglobal.com/markets/us-options/pearl-options/fees.
    \12\ See MIAX Emerald Exchange Fee Schedule at https://www.miaxglobal.com/markets/us-options/emerald-options/fees.
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Web CRD Fees
    The Exchange also proposes to establish Section 2) c), Web CRD 
Fees, in the Exchange's Fee Schedule. The Financial Industry Regulatory 
Authority (``FINRA''), through the Web CRD registration system for the 
registration of associated persons of Electronic Exchange Member \13\ 
and Market Maker \14\ organizations that are not also FINRA members, 
collects from those MIAX Sapphire Members, general registration fees 
and fingerprint processing fees. The Exchange proposes to list these 
fees in its Fee Schedule for convenience. The Exchange does not

[[Page 68487]]

collect or retain these fees. The Web CRD Fees that are proposed by the 
Exchange are identical to the fees posted by the Exchange's affiliates, 
MIAX Options,\15\ MIAX Pearl Options,\16\ and MIAX Emerald.\17\
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    \13\ The term ``Electronic Exchange Member'' or ``EEM'' means 
the holder of a Trading Permit who is a Member representing as agent 
Public Customer Orders or Non-Customer Orders on the Exchange and 
those non-Market Maker Members conducting proprietary trading. 
Electronic Exchange Members are deemed ``members'' under the 
Exchange Act. See Exchange Rule 100.
    \14\ The term ``Market Maker'' or ``MM'' means a Member 
registered with the Exchange for the purpose of making markets in 
options contracts traded on the Exchange and that is vested with the 
rights and responsibilities specified in Chapter VI of the MIAX 
Sapphire Rulebook. See Exchange Rule 100.
    \15\ See supra note 9.
    \16\ See supra note 10.
    \17\ See supra note 11.
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2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \18\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \19\ in 
particular, 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. The Exchange also believes the proposal furthers 
the objectives of Section 6(b)(5) of the Act in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest and is not designed to permit unfair discrimination between 
customers, issuers, brokers and dealers.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(4) and (5).
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Sales Value Fee
    The assessment by the Exchange of the proposed Sales Value Fee is 
reasonable, equitable and not unfairly discriminatory since it allows 
the Exchange to offset the cost it incurs in payment to the Commission 
of a transaction fee that is designed to recover the costs related to 
the government's supervision and regulation of the securities markets 
and securities professionals. The amount of the fee is the same amount 
assessed to the Exchange pursuant to Section 31 of the Exchange Act. 
The Exchange believes it is reasonable to recover the actual costs 
associated with the payment of Section 31 fees and other exchanges, 
including MIAX Options, MIAX Pearl Options, and MIAX Emerald, charge 
the same fee to their market participants.
Web CRD Fees
    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory for the proposed FINRA fees to be included on the Fee 
Schedule because these fees are not being assessed or set by MIAX 
Sapphire but rather by FINRA, and these fees will be assessed to 
broker-dealers that register associated persons through FINRA's Web CRD 
system, and other exchanges, including MIAX Options, MIAX Pearl 
Options, and MIAX Emerald, charge the same fees to their market 
participants. Moreover, the Exchange believes including these fees in 
the Fee Schedule is equitable and not unfairly discriminatory because 
the Exchange will not be collecting or retaining the fees, and 
therefore, the Exchange will not be in a position to apply them in an 
inequitable or unfairly discriminatory manner.

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 Exchange believes that the 
Sales Value Fee does not impose an undue burden on competition as this 
fee is set by the Securities and Exchange Commission and is similarly 
assessed by all options exchanges.\20\ Additionally, the Web CRD Fees 
do not impose an undue burden on competition because the Exchange will 
not be collecting or retaining these fees, and therefore, the Exchange 
will not be in a position to apply them in an inequitable or unfairly 
discriminatory manner.
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    \20\ See e.g., BOX Exchange Rule 29000(b) and MEMX Exchange Rule 
15.1(b).
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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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\21\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i) 
necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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.

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-2024-12 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-2024-12. 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-2024-12 and should 
be submitted on or before September 16, 2024.


[[Page 68488]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-19012 Filed 8-23-24; 8:45 am]
BILLING CODE 8011-01-P