[Federal Register Volume 90, Number 239 (Tuesday, December 16, 2025)]
[Notices]
[Pages 58341-58343]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-22865]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104370; File No. SR-SAPPHIRE-2025-43]
Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the MIAX Sapphire Fee Schedule To Modify Certain Connection Fees for
Stock-Option Order Functionality
December 11, 2025.
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 November 28, 2025, MIAX Sapphire, LLC (``MIAX Sapphire'' 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 proposes to amend the MIAX Sapphire Options Exchange
Fee Schedule (``Fee Schedule'') to amend the MIAX Sapphire Options
Exchange Fee Schedule (the ``Fee Schedule'') to provide that Members
\3\ and non-Members may receive up to two (2) 1 gigabit (``Gb'')
connections for no charge when those connections are used solely to
route the stock portion of a Stock-Option Order \4\ to an away Trading
Center \5\ for execution on behalf of the Exchange.
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\3\ See Exchange Rule 100.
\4\ See Exchange Rule 518(a).
\5\ See 17 CFR 242.600(b)(106).
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The text of the proposed rule change is available on the Exchange's
website at https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings, and at MIAX Sapphire's principal office.
[[Page 58342]]
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 the Fee Schedule so that Members and
non-Members may receive up to two (2) 1 Gb connections for no charge
when those connections are used solely to route the stock portion of a
Stock-Option Order to an away Trading Center for execution on behalf of
the Exchange.
In sum, Exchange Rule 518(a) provides that ``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 as defined below for the purposes of
executing a particular investment strategy.'' Exchange Rule 518(a)
further provides that a complex order can also be a ``stock-option
order'', which is an ``order to buy or sell a stated number of units of
an underlying security (stock or Exchange Traded Fund Share (``ETF''))
. . . coupled with the purchase or sale of options contract(s) on the
opposite side of the market representing either (i) the same number of
units of the underlying security, or (ii) the number of units of the
underlying stock necessary to create a delta neutral position where the
ratio represents the total number of units of the underlying security .
. . in the option leg to the total number of units of the underlying
security . . . in the stock leg . . .'' (referred to herein as a
``Stock-Option Order'').
To facilitate the stock leg of a Stock-Option Order, the Exchange
relies on certain Members and non-Members on the Exchange to route the
stock portion of a Stock-Option Order to an away equities Trading
Center for execution on behalf of the Exchange. These Members or non-
Members aid the Exchange in providing Stock-Option Order functionality.
Today, such Members and non-Members must purchase at least a single 1
Gb connection to route such stock order to an away equities Trading
Center and pay the applicable $1,400 per 1 Gb connection.\6\
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\6\ See Fee Schedule, Sections 5)a)-b). The Exchange assesses a
different fee for 10 Gb ULL connectivity to the primary/secondary
facility, as well as different 1 Gb and 10 Gb connectivity fees to
the disaster recovery facility. These connections and the amount the
Exchange assesses per connection are not subject to this proposal.
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To encourage participants to provide or continue to provide for the
routing of the stock leg of a Stock-Option Order, the Exchange proposes
to provide that such participants may receive up to two 1 Gb
connections for no charge when those connections are used solely to
route the stock portion of a Stock-Option Order to an away equities
Trading Center for execution on behalf of the Exchange. As such the
Exchange proposes to amend both Sections 5)a)-b) of the Fee Schedule to
provide that ``Members [or non-Members] will not be assessed the
monthly network connectivity fee for up to two (2) 1 Gb connections so
long as the 1 Gb connection is used solely to route the stock portion
of Stock-Option Order (as defined in Exchange Rule 518(a)) to an away
Trading Center, as defined under the Exchange Act, for execution on
behalf of the Exchange.''
Implementation
The proposed fee change is effective beginning December 1, 2025.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\7\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\8\ in particular, in that it
is not designed to permit unfair discrimination among customers,
brokers, or dealers. The Exchange also believes that its proposal is
consistent with Section 6(b)(4) of the Act \9\ because it represents an
equitable allocation of reasonable dues, fees and other charges among
market participants using any facility or system which the Exchange
operates or controls.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ 15 U.S.C. 78f(b)(4).
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The Exchange believes the proposed fee waiver is reasonable. By
reducing the cost associated with providing routing services for Stock-
Option Orders, Members and non-Members will be encouraged to provide or
continue to provide such routing services for the stock portion of such
orders. The Exchange believes that this will benefit the Exchange's
Stock-Option Order functionality by improved routing flexibility and
enhanced competition among exchanges that offer similar functionality,
which will also benefit other Members on the Exchange, and, more
broadly, investors through enhanced market quality and liquidity for
such orders.
The Exchange believes the proposed fee waiver is equitable and not
unfairly discriminatory. The Exchange believes that the proposal
represents an equitable allocation of reasonable dues, fees, and other
charges and is not unfairly discriminatory in that it applies uniformly
to all similarly situated Members and non-Members. Any Member or non-
Member that wishes to provide such routing functionality will be
eligible for such waiver. Meanwhile, Members and non-Members that are
already provide such routing functionality will also be eligible and
this proposal will serve as a means to encourage those Members and non-
Members to continue to provide stock routing services to other Exchange
participants. Further, the proposal will result in reduced fees for
Members and non-Members that choose to route the stock portion of a
Stock-Option Order to an away equities Trading Center for execution on
behalf of the Exchange.
The Exchange also believes that the proposal represents an
equitable allocation of reasonable dues, fees, and other charges and is
not unfairly discriminatory as such Members and non-Members play an
important role in supporting the Exchange's Stock-Option Order
functionality. These Members and non-Members fulfill a very specific
function for the benefit of all Exchange participants. The Exchange
proposes to waive the fees for up to two 1 Gb connections for Members
and non-Members that use the connection solely to route the stock
portion of a Stock-Option Order to an away equities Trading Center for
execution on behalf of the Exchange. There are a number of costs
associated with providing such routing services and the Exchange
believes that this proposal to reduce the overall burden to provide
Stock-Option Order routing services to retain or attract more Members
and non-Members to do so.
The proposal is equitable and reasonable because it is intended to
incentivize participants to provide or continue to provide routing
services to the Exchange so that it may offer Stock-Option Order
routing functionality to all market participants. The proposed change
is designed to encourage participants to provide or continue to
[[Page 58343]]
provide routing services for Stock-Option Orders by providing them up
to two 1 Gb connections for no charge when those connections are used
solely to route the stock portion of a Stock-Option Order to an away
equities Trading Center for execution on behalf of the Exchange.
Lastly, offering a limited number of connections for no charge as
proposed herein is not new or novel. Other exchanges provide a certain
number of connections for no charge when those connections are used
solely for a specific purpose.\10\
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\10\ See, e.g., The Nasdaq Stock Market LLC, General 8:
Connectivity, Section 2(b) (providing two connections for free for
Third Party Services Direct Connection per client to UTP SIP feeds
only); and Cboe BZX Exchange, Inc. Fee Schedule, Physical
Connectivity Fees section (providing that ``[a] Member that is a
registered Lead Market Maker shall have Physical Connectivity Fees
waive connected solely to the BZX Equities Disaster Recovery data
center for the first twelve month physical connectivity.'').
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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.
The Exchange does not believe that the proposed rule change will
result in any burden on inter-market competition for the following
reasons. A number of other exchanges offer similar stock-option order
functionality \11\ and the proposal would help to provide for robust
routing capabilities for the stock portion of such orders. There is
significant competition for this order flow among options exchanges to
attract, retain, and incentivize this order flow. The Exchange believes
that this proposal will enhance the Exchange's ability to compete for
such order flow by incentivizing Members and non-Members to route the
stock portion of a Stock-Option Order, resulting in additional
competition among exchanges to the benefit of the markets.
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\11\ See, e.g., Cboe EDGX Exchange, Inc. Rule 21.20(b)
(describing Stock-Option Orders); and Nasdaq Phlx LLC Options 3,
Section 14(a)(i).
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The Exchange does not believe that the proposed rule change will
result in any burden on intra-market competition because any Member or
non-Member that wishes to provide such routing functionality will be
eligible for such waiver. Meanwhile, Members and non-Members that are
already provide such routing functionality will also be eligible and
this proposal will serve as a means to encourage those Members and non-
Members to continue to do so. The Exchange does not believe that the
proposed changes represent a significant departure from pricing offered
by the Exchange's competitors.
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,\12\ and Rule 19b-4(f)(2) \13\ 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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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 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-SAPPHIRE-2025-43 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-2025-43. 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 filing 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-2025-43 and
should be submitted on or before January 6, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-22865 Filed 12-15-25; 8:45 am]
BILLING CODE 8011-01-P