Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX Options Fee Schedule, 4175-4180 [2013-00967]
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Federal Register / Vol. 78, No. 13 / Friday, January 18, 2013 / Notices
4175
List. Documents are available at
www.prc.gov, Docket Nos. MC2013–32,
CP2013–41.
SECURITIES AND EXCHANGE
COMMISSION
SECURITIES AND EXCHANGE
COMMISSION
Stanley F. Mires,
Attorney, Legal Policy & Legislative Advice.
[File No. 500–1]
[Release No. 34–68645; File No. SR–MIAX–
2012–05]
Eco Global Corporation, Execute
Sports, Inc., FacePrint Global
Solutions, Inc., FinancialContent, Inc.,
and Firstgold Corp.; Order of
Suspension of Trading
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the MIAX Options
Fee Schedule
[FR Doc. 2013–00962 Filed 1–17–13; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
January 16, 2013.
Product Change—Priority Mail
Negotiated Service Agreement
AGENCY:
ACTION:
Postal ServiceTM.
Notice.
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
SUMMARY:
DATES:
Effective date: January 18, 2013.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on January 11,
2013, it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail Contract 51 to Competitive Product
List. Documents are available at
www.prc.gov, Docket Nos. MC2013–31,
CP2013–40.
SUPPLEMENTARY INFORMATION:
Stanley F. Mires,
Attorney, Legal Policy & Legislative Advice.
[FR Doc. 2013–00958 Filed 1–17–13; 8:45 am]
BILLING CODE 7710–12–P
RECOVERY ACCOUNTABILITY AND
TRANSPARENCY BOARD
Agency Information Collection
Activities: Renewal of Currently
Approved Collection; Comment
Request
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Correction
In notice document 2012–30952,
appearing on page 76097, in the issue of
Wednesday, December 26, 2012, make
the following correction:
In the first column, under the heading
DATES, in the second and third lines,
‘‘February 22, 2013’’ should read
‘‘February 25, 2013’’.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Eco Global
Corporation because it has not filed any
periodic reports since the period ended
September 30, 2009.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Execute
Sports, Inc. because it has not filed any
periodic reports since the period ended
September 30, 2008.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of FacePrint
Global Solutions, Inc. because it has not
filed any periodic reports since the
period ended June 30, 2007.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of
FinancialContent, Inc. because it has not
filed any periodic reports since the
period ended December 31, 2008.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Firstgold
Corp. because it has not filed any
periodic reports since the period ended
October 31, 2009.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
companies. Therefore, it is ordered,
pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that
trading in the securities of the abovelisted companies is suspended for the
period from 9:30 a.m. EST on January
16, 2013 through 11:59 p.m. EST on
January 30, 2013.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
January 14, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
31, 2012, Miami International Securities
Exchange LLC (‘‘Exchange’’ or ‘‘MIAX’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
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 establish
membership and system connectivity
fees applicable to Members and nonMembers using services provided by
MIAX. While changes to the Exchange’s
Fee Schedule pursuant to this proposal
are effective upon filing, the Exchange
has designated that the proposed
monthly Port Fees and the proposed
monthly Member Participant Identifier
Fee be implemented beginning January
1, 2013.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://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
[FR Doc. C1–2012–30952 Filed 1–17–13; 8:45 am]
[FR Doc. 2013–01151 Filed 1–16–13; 4:15 pm]
1 15
BILLING CODE 1505–01–D
BILLING CODE 8011–01–P
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 78, No. 13 / Friday, January 18, 2013 / Notices
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 purpose of the proposed rule
change is to establish membership and
system connectivity fees applicable to
Members and non-Members using
services provided by MIAX.
Membership Fees:
MIAX will assess Membership fees for
Applications and Trading Permits.
a. Application for MIAX Membership
A one-time application fee based
upon the applicant’s status as either an
Electronic Exchange Member (‘‘EEM’’)
or as a Market Maker will be assessed
by MIAX. Applicants for MIAX
Membership as an EEM will be assessed
a one-time Application Fee of $2,500.00.
Applicants for MIAX Membership as a
Market Maker will be assessed a onetime Application Fee of $3,000.00. The
difference in the fee charged to EEMs
and Market Makers reflects the
additional review and processing effort
needed for Market Maker applications.
MIAX’s one-time application fees are
similar to and generally lower than one
time application fees in place at the
Chicago Board Options Exchange,
Incorporated (‘‘CBOE’’) ($3,000 for an
individual applicant and $5,000 for an
applicant organization) and at the
International Securities Exchange, LLC
(‘‘ISE’’) ($7,500 for a Primary Market
Maker, $5,500 for a Competitive Market
Maker and $3,500 for an Electronic
Access Member).
Applicants for MIAX membership
that apply for membership on or before
January 31, 2013 will not be assessed a
fee for such application. MIAX believes
that this will provide incentive for
potential applicants to submit early
applications, which should result in
maximizing potential order flow and
liquidity as MIAX begins trading, all to
the benefit of the investing public.
Applicants for MIAX membership that
apply for membership on or after
February 1, 2013 will be subject to the
Membership Application Fees described
above.
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b. Trading Permits
MIAX will issue Trading Permits that
confer the ability to transact on MIAX.
There is no limit on the number of
Trading Permits that may be issued by
MIAX; however MIAX has the authority
to limit or decrease the number of
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Trading Permits it has determined to
issue provided it complies with the
provisions set forth in Rule 200(a) and
Section 6(c)(4) of the Exchange Act.3
MIAX will assess monthly fees for
Trading Permits depending upon the
category of Member that is issued a
particular trading permit. EEMs will be
assessed a monthly fee of $1,000 for a
Trading Permit. Registered Market
Makers (‘‘RMMs’’) will be assessed
$3,000.00 per month for a Trading
Permit for an RMM assignment in up to
100 option classes, $4,500.00 per month
for a Trading Permit for an RMM
assignment in up to 250 option classes,
or $6,000.00 per month for a Trading
Permit for an RMM assignment in all
option classes listed on MIAX.
For the calculation of the monthly
RMM Trading Permit Fees, the number
of classes is defined as the greatest
number of classes the RMM was
assigned to quote in on any given day
within the calendar month.
Primary Lead Market Makers
(‘‘PLMMs’’) and Lead Market Makers
(‘‘LMMs’’) will be assessed the same
monthly Trading Permit fees applicable
to RMMs described above. In addition to
the RMM Trading Permit fees, PLMMs
and LMMs will be assessed an
additional $1,000.00 per month for a
Trading Permit. Thus, an LMM or
PLMM will be assessed $4,000.00 per
month for a Trading Permit for an LMM
or PLMM assignment in up to 100
option classes, $5,500.00 per month for
a Trading Permit for an LMM or PLMM
assignment in up to 250 option classes,
or $7,000.00 per month for a Trading
Permit for an LMM or PLMM
assignment in all option classes listed
on MIAX.
MIAX monthly Trading Permit Fees
are generally lower than monthly
trading permit fees in place at CBOE
and the NASDAQ OMX PHLX LLC
(‘‘PHLX’’). The $1,000 monthly Trading
Permit fee assessed to EEMs is lower
than the CBOE’s monthly electronic
access trading permit fee ($1,600) and
the PHLX’s monthly permit fee for
members ($2,000). The Monthly Trading
Permit Fees assessed to MIAX Market
Makers is readily comparable to and
lower than the monthly fees in place at
PHLX for Remote Streaming Quote
Traders ($5,000 per month for less than
100 classes, $8,000 per month for more
than 100 classes and less than 999
classes, and $11,000 per month for
1,000 or more classes).
Members receiving Trading Permits
during the month will be assessed
3 For a complete description of MIAX Trading
Permits, see MIAX Rule 200. See also 15 U.S.C.
78(f)(c)(4).
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Trading Permit Fees according to the
above schedule, except that the
calculation of the Trading Permit fee for
the first month in which the Trading
Permit is issued will be pro-rated based
on the number of trading days occurring
after the date on which the Trading
Permit was in effect during that first
month divided by the total number of
trading days in such month multiplied
by the monthly rate.
Testing and Certification Fees:
a. API Testing and Certification Fee
Members
MIAX will assess a one-time
Application Programming Interface
(‘‘API’’) testing and certification fee on
EEMs and Market Makers. An API
makes it possible for Member software
to communicate with MIAX software
applications, and is subject to Member
testing with, and certification by, MIAX.
API testing and certification includes for
EEMs testing all available order types,
new order entry, order management,
order throughput and mass order
cancellation. For Market Makers, API
testing and certification also includes
testing of all available quote types,
quote throughput, quote management
and cancellation, Aggregate Risk
Manager settings and triggers, and
confirmation of quotes within the
trading engines.
The one-time MIAX API Testing and
Certification fees are based upon the
category of Member being tested and
certified. EEMs will be assessed a onetime API Testing and Certification fee of
$1,000.00. Market Makers will be
assessed a one-time API Testing and
Certification fee of $2,500.00. The fee
represents costs incurred by the
Exchange as it works with each Member
while testing and certifying that the
Member’s software systems
communicate properly with MIAX.
MIAX has set a one-time fee rather than
an hourly rate used by some of the other
exchanges so MIAX Members will know
the full cost for the service prior to
beginning to use such services. Until
recently, PHLX charged hourly fees for
use of its testing facility—a fee of $285
per hour for active connection testing
during normal operating hours and $333
per hour for testing after normal hours.4
MIAX’s one-time fees are comparable
and more cost effective to the Members
than hourly rates at other exchanges.
In order to provide an incentive to
prospective Members to apply early for
4 See Securities Exchange Act Release No. 63257
(November 5, 2010) 75 FR 69493 (November 12,
2010) (SR–PHLX 2010–155) Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
to Amend Fees Assessed for Use of the Testing
Facility.
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membership and to engage in API
testing and certification such that they
will be able to trade options on MIAX
as soon as possible, API Testing and
Certification fees will be waived for all
EEMs and Market Makers that apply for
MIAX membership and complete API
testing and certification on or before
January 31, 2013. EEMs and Market
Makers that apply for MIAX
membership or complete API testing
and certification on or after February 1,
2013 are subject to the Member API
Testing and Certification Fees as
described above.
Non-Members
MIAX will assess a one-time API
Testing and Certification fee of
$5,000.00 on third party vendors 5 and
Service Bureaus 6 whose software
interfaces with MIAX software. As with
Members, an API makes it possible for
third party vendors’ and Service
Bureaus’ software to communicate with
MIAX software applications, and is
subject to testing with, and certification
by, MIAX. The higher fee charged to
such non-Members reflects the greater
amount of time spent by MIAX
employees testing and certifying nonMembers. It has been MIAX’s
experience that Member testing takes
less time than non-Member testing
because Members have more experience
testing these systems with exchanges;
generally fewer questions and issues
arise during the testing and certification
process. Also, because third party
vendors and Service Bureaus are
redistributing data and reselling services
to other Members and market
participants the number and types of
scenarios that need to be tested are more
numerous and complex than those
tested and certified for a single Member.
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b. Member Network Testing and
Certification Fee
As described below under
Connectivity Fees, MIAX will establish
electronic communication connections
with Members and will assess Members
a one-time Testing and Certification Fee
of $1,000.00 per Member for a one
Gigabit connection, and $4,000.00 per
Member for a ten Gigabit connection.
5 Third party vendors are subscribers of MIAX’s
market and other data feeds, which they in turn use
for redistribution purposes. Third party vendors do
not provide connectivity and therefore are not
subject to Network testing and certification.
6 A Service Bureau is a technology provider that
offers and supplies technology and technology
services to a trading firm that does not have its own
proprietary system. The technology and technology
services supplied by Service Bureaus includes both
software applications and connectivity, thus
Service Bureaus are subject to both API testing and
certification and Network testing and certification.
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Members will not be charged a Testing
and Certification Fee for any additional
connections they obtain since the
additional connections will be from the
same source and will have the same
internal technology.
c. Non-Member Network Testing and
Certification Fee
MIAX will establish electronic
connections with and will assess
Service Bureaus and Extranet
Providers 7 a one-time Testing and
Certification Fee of $2,000.00 for the
initial one Gigabit connection and
$1,000 for each additional one Gigabit
connection. In addition, MIAX will
assess Service Bureaus and Extranet
Providers a Testing and Certification
Fee of $6,000.00 for the initial ten
Gigabit connection and $4,000.00 for
each additional ten Gigabit connection.
The Member and non-Member
Network Testing and Certification fees
represent installation and support costs
incurred by the Exchange as it works
with each Member and non-Member to
make sure there are appropriate
electronic connections with MIAX.
MIAX has set a one-time fee for testing
so MIAX Members and non-Members
will know the full cost for the service
prior to beginning to use such services.
The higher fee charged to non-Members
reflects the greater amount of time spent
by MIAX employees testing and
certifying non-Members. It has been
MIAX’s experience that Member
network connectivity testing takes less
time than non-Member network
connectivity testing because Members
have more experience testing these
systems with exchanges; generally fewer
questions and issues arise during the
testing and certification process. In
addition, non-Members are charged a
discounted Network Testing and
Certification Fee for additional
connections because each connection
will be used by different customers of
the non-Member Service Bureaus and
Extranet Providers and will need to be
individually tested requiring more
Exchange resources for testing and
certification.
Connectivity Fees:
MIAX will assess fees to Members,
Service Bureaus, and Extranet Providers
for electronic connections 8 between
7 An Extranet Provider is a technology provider
that connects with MIAX systems and in turn
provides such connectivity to MIAX participants
that do not connect directly with MIAX. Extranet
Providers do not provide software interfaces with
MIAX software applications, thus Extranet
Providers are not subject to API testing and
certification.
8 For purposes of this proposed rule change, the
terms ‘‘connectivity’’ and ‘‘connections’’ refer to the
physical connections between Member and non-
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4177
those entities and MIAX. The
Connectivity fees are based upon the
amount of bandwidth that will be used
by the Member, Service Bureau, or
Extranet Provider. MIAX currently
offers connectivity with one (1) Gigabit,
which connects the Member, Service
Bureau, or Extranet Provider to MIAX
using a copper cable, and ten (10)
Gigabits, using fiber optic connections.
a. Member Network Connectivity Fee
MIAX will assess a monthly Member
Network Connectivity fee of $1,000 for
a one Gigabit connection, and $5,000 for
a ten Gigabit connection. MIAX charges
a higher fee for a ten Gigabit connection
due the higher costs of the fiber optic
connection. MIAX’s monthly Member
Network Connectivity fee is comparable
to monthly fees charged for similar
connectivity at CBOE ($1,250 for a one
Gigabit connection and $4,500 for a ten
Gigabit connection) and PHLX ($2,100
for a one Gigabit connection and $5,000
for a ten Gigabit connection).
The first monthly Member Network
Connectivity fee for all Members will be
assessed on a pro-rata basis, which is
the number of trading days remaining in
the month divided by the total number
of trading days in the first month in
which the fee was in effect multiplied
by the monthly rate. Thereafter, the
Member Network Connectivity fee will
be pro-rated for new Members based on
the number of trading days on which
the Member used the connectivity in its
first month of trading on MIAX, divided
by the total number of trading days in
such month multiplied by the monthly
rate.
b. Non-Member Network Connectivity
Fee
MIAX will assess a monthly nonMember Network Connectivity fee to
Service Bureaus and Extranet Providers
of $2,000.00 for a one Gigabit
connection, and $10,000.00 for a ten
Gigabit connection. MIAX’s monthly
Non-Member Network Connectivity fee
is comparable to monthly fees charged
for similar connectivity at CBOE ($2,500
for a one Gigabit connection and $7,500
for a ten Gigabit connection). MIAX
assesses a higher fee to Service Bureaus
and Extranet Providers than to Members
to reflect the fact that Service Bureaus
and Extranet Providers serve as conduits
to MIAX Members and non-Members
that do not have their own proprietary
systems or do not directly connect to
MIAX. The Service Bureaus and
Extranet Providers recover the cost of
the MIAX Network Connectivity fee
Member electronic networks and the MIAX
systems.
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from their customers, resulting in a
lower overall fee to Members and nonMembers using the services of such
third party providers.
The non-Member Network
Connectivity fee for the first month of
trading on MIAX will be assessed on a
pro-rata basis in the same manner as the
Member Network Connectivity fee
described above.
c. Pass-Through of External
Connectivity Fees
MIAX will assess External
Connectivity fees to Members and nonMembers that establish connections
with MIAX through a third-party. Fees
charged to MIAX by third-party external
vendors on behalf of a Member or nonMember connecting to MIAX (including
cross-connects),9 will be passed through
to the Member or non-Member. External
Connectivity fees include one-time setup fees and monthly charges charged to
MIAX by a third-party.
The purpose of the External
Connectivity fee is to recoup costs
incurred by MIAX in establishing
connectivity with external vendors
acting on behalf of a Member or nonMember. MIAX will only pass-through
the actual costs it is charged by the
third-party external vendors.
d. Port Fees
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Once network connectivity is
established, MIAX will assess fees for
access and services used by Members,
Service Bureaus and Extranet Providers.
Known as ‘‘Ports’’, MIAX provides two
types: a Financial Information Exchange
(‘‘FIX’’) Port,10 which allows Members
to electronically send orders in all
products traded on the Exchange and
the MIAX Express Interface (‘‘MEI’’) 11
Port, which allows Market Makers to
submit electronic quotes to the
Exchange. MIAX will assess monthly
MEI Port fees on Market Makers based
upon the number of MIAX matching
engines 12 used by the Market Maker.
9 A ‘‘cross-connect’’ occurs when the affected
third-party system is sited at the same data center
where MIAX systems are sited, and the third-party
connects to MIAX through the data center, rather
than connecting directly to MIAX outside of the
data center.
10 A FIX Port is an interface with MIAX systems
that enables the Port user (typically an EEM or a
Market Maker) to submit orders electronically to
MIAX.
11 MIAX Express Interface is a connection to
MIAX systems that enables Market Makers to
submit electronic quotes to MIAX.
12 A ‘‘matching engine’’ is a part of the MIAX
electronic system that processes options quotes and
trades on a symbol-by-symbol basis. Some matching
engines will process option classes with multiple
root symbols, and other matching engines will be
dedicated to one single option root symbol (for
example, options on SPY will be processed by one
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Each Market Maker will be allocated
two MEI quoting ports for each
matching engine they use. For example,
a Market Maker that wishes to make
markets in just one symbol would
require the two MEI quoting ports in a
single matching engine; a Market Maker
wishing to make markets in all symbols
traded on MIAX would require the two
MEI quoting ports in each of the
Exchange’s matching engines. The FIX
Port and the MEI Port each include
access to MIAX’s primary and
secondary data centers and its disaster
recovery center. The proposed monthly
Port Fees described below are scheduled
to be implemented beginning January 1,
2013.
FIX Port Fees
MIAX will assess monthly FIX Port
fees on Members based upon the
number of FIX Ports used by the
Member submitting orders to MIAX.
Although one FIX Port gives access to
all products traded on MIAX, some
Members may choose to use more than
one FIX Port. MIAX will assess a
monthly FIX Port fee of $250.00 for the
first FIX Port provided to the user,
$150.00 per FIX Port for the second
through fifth FIX Port provided to the
user (if applicable), and $50.00 per FIX
Port for the sixth FIX Port and any
additional FIX Ports provided to the
user (if applicable). MIAX’s monthly
FIX Port fees are comparable to the
Order Entry Port Fee charged by PHLX
($500 per month per mnemonic with no
discount for multiple Ports), which
includes a fee for assigning and
maintaining mnemonics. MIAX charges
a separate fee for assigning and
maintaining mnemonics (known as
Member Participant Identifier or
‘‘MPID’’). Taken together, the MIAX
monthly FIX Port and the MPID fees are
less than the PHLX’s monthly Order
Entry Port Fee.
MEI Port Fees
MIAX will assess a monthly MEI Port
fee of $1,000.00 for the first matching
engine on which the Market Maker has
the two ports, $500.00 each for the
second through fifth matching engines
on which the Market Maker has the two
ports (if applicable), and $250.00 each
for the sixth matching engine and any
additional matching engines on which
the Market Maker has the two ports (if
applicable).
MEI Port fees will be capped at $1,000
per month per Market Maker until the
single matching engine that is dedicated only to
SPY options). A particular root symbol may only be
assigned to a single designated matching engine. A
particular root symbol may not be assigned to
multiple matching engines.
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first full calendar month during which
MIAX lists and trades options overlying
at least 100 underlying securities. Once
MIAX begins listing and trading options
overlying at least 100 underlying
securities, MIAX will assess MEI Port
fees as described above. MEI Port fees
will be assessed for the entire month
during which MIAX begins trading,
regardless of the number of trading days
that have already occurred during such
month prior to the commencement of
trading on MIAX. MEI Port fees will be
assessed on a month-by-month basis.
e. MPID Fees
MIAX will assess monthly Member
Participant Identifier (‘‘MPID’’) 13 fees
on EEMs, based upon the number of
MPIDs assigned to a particular EEM in
a given month. EEMs will be assessed a
monthly MPID fee of $200.00 for the
first MPID assigned, $100.00 each for
the second through fifth MPID assigned,
and $50.00 each for the sixth MPID and
any additional MPIDs assigned. MIAX
assess MPID fees to cover the
administrative costs it incurs in
assigning and managing these identifiers
for each EEM. As discussed above,
MIAX’s monthly MPID fee together with
its FIX Port fee are similar to and lower
than the PHLX’s monthly Order Entry
Port fee. The proposed monthly MPID
Fees described above are scheduled to
be implemented beginning January 1,
2013.
2. Statutory Basis
MIAX believes that its proposal to
amend its Fee Schedule is consistent
with Section 6(b) of the Act 14 in
general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act 15
in particular, in that it is an equitable
allocation of reasonable fees and other
charges.
The Exchange believes its one-time
Membership Application fees are
reasonable, equitable and not unfairly
discriminatory. As described in the
Purpose section, the one-time
application fees are comparable to
application fees in place at other
options exchanges and are designed to
recover costs associated with the
processing of such applications. Market
Maker applicants are charged slightly
more than EEM applicants because of
the additional work involved in
processing a Market Maker’s
application. MIAX believes it is
13 An MPID is a code used in the MIAX system
to identify the participant to MIAX and to the
participant’s Clearing Member respecting trades
executed on MIAX. Participants may use more than
one MPID.
14 15 U.S.C. 78f(b).
15 15 U.S.C. 78f(b)(4) and 78f(b)(5).
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Federal Register / Vol. 78, No. 13 / Friday, January 18, 2013 / Notices
reasonable and equitable to waive the
fee to applicants who apply for
membership on or before January 31,
2013. The waiver of such fees provides
incentives to interested applicants to
apply early for MIAX membership,
which provides MIAX with potential
order flow and liquidity providers as it
begins operations. The waiver will
apply equally to all applicants.
The Exchange believes its Trading
Permit fees are reasonable, equitable
and not unfairly discriminatory. The
Trading Permit fees are lower than
comparable fees at other exchanges as
described in the Purpose section above.
The differentiation between Trading
Permit fees charged to EEMs and Market
Makers reflects the additional Exchange
access provided to Market Makers and
the additional technical, regulatory and
administrative costs associated with
Market Makers’ use of the Exchange and
its services.
MIAX believes its API and Network
Testing and Certification fees are a
reasonable allocation of its costs and
expenses among its Members and other
persons using its facilities since it is
recovering the costs associated with
providing such infrastructure testing
and certification services. MIAX
believes it is reasonable, equitable and
not unfairly discriminatory to assess
different API and Network Testing and
Certification fees to EEMs and Market
Makers. The interface between Market
Maker quoting software and MIAX
systems is assessed higher API and
Network Testing and Certification fees
because the Market Maker software
interface is more complex and has more
functionality to validate than the EEM’s
software interface requiring an
increased level of support and expertise.
MIAX therefore believes that the higher
Member API and Network Testing and
Certification fees applicable to Market
Makers are not unfairly discriminatory.
Additionally, MIAX believes it is
reasonable, equitable and not unfairly
discriminatory to assess different API
and Network Testing and Certification
fees to Members and non-Members. The
higher fee charged to non-Members
reflects the greater amount of time spent
by MIAX employees testing and
certifying non-Members. It has been
MIAX’s experience that Member testing
takes less time than non-Member testing
because Members have more experience
testing these systems with exchanges;
generally fewer questions and issues
arise during the testing and certification
process. Also, with respect to API
testing and certification because third
party vendors and Service Bureaus are
redistributing data and reselling services
to other Members and market
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participants the number and types of
scenarios that need to be tested are more
numerous and complex than those
tested and certified for Members. In
addition, MIAX believes it is reasonable,
equitable and not unfairly
discriminatory to assess non-Members a
discounted Network Testing and
Certification Fee for additional
connections because each connection
will be used by different customers of
the non-Member Service Bureaus and
Extranet Providers and will need to be
individually tested requiring more
Exchange resources for testing and
certification. Members will not be
charged for additional connections
because additional network testing and
certification will generally not be
necessary since the additional
connections will be from the same
source and will have the same internal
technology.
The Exchange believes that the
proposed Connectivity Fees in general
constitute an equitable allocation of
fees, and are not unfairly
discriminatory, because they allow the
Exchange to recover costs associated
with offering access through the
network connections and access and
services through the Ports, responding
to customer requests, configuring MIAX
systems, programming API user
specifications and administering the
various services. Access to MIAX
market will be offered on fair and nondiscriminatory terms. The proposed
Connectivity Fees are also expected to
offset the costs MIAX incurs in
maintaining, and implementing ongoing
improvements to the trading systems,
including connectivity costs, costs
incurred on gateway software and
hardware enhancements and resources
dedicated to gateway development,
quality assurance, and technology
support. The Exchange believes that its
proposed fees are reasonable in that
they are competitive with those charged
by other exchanges. MIAX assesses a
higher fee to Service Bureaus and
Extranet Providers than to Members to
reflect the fact that Service Bureaus and
Extranet Providers serve as conduits to
MIAX Members and/or non-Members
that do not have their own proprietary
systems or do not directly connect to
MIAX. For the one monthly Network
Connectivity Fee charged by MIAX,
Service Bureaus and Extranet Provider
may in turn provide connectivity to a
number of Members and/or nonMembers. The Service Bureaus and
Extranet Providers recover the cost of
the MIAX Network Connectivity Fee,
plus a premium, from their customers,
which can still result in a lower overall
PO 00000
Frm 00060
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4179
fee to each Member and/or non-Member
using the services of such third party
providers. In allocating its costs among
Members and users of its services,
MIAX believes it is equitable to seek to
recover a greater portion of those costs
from Service Bureaus and Extranet
Providers who profit from the reselling
of those Network Connectivity services.
MIAX believes it is reasonable,
equitable and not unfairly
discriminatory to pass-through External
Connectivity fees to Members and nonMembers that establish connections
with MIAX through a third-party. MIAX
will only pass-through the actual costs
it is charged by third-party external
vendors. MIAX believes it is reasonable
and equitable to recover costs charged it
on behalf of a Member or non-Member
that establishes connections with MIAX
through a third party.
MIAX believes it is reasonable,
equitable and not unfairly
discriminatory to assess FIX and MEI
Port Fees on Members who use such
services—the FIX Port enables Members
to submit orders electronically to the
Exchange for processing and the MEI
Port enables Market Makers to submit
quotes to the Exchange for processing.
The amount charged for the MEI Port is
higher because it is more complex and
has more functionality than the FIX
Port. Therefore, MIAX believes the
higher fee for the MEI Port is not
unfairly discriminatory. The Exchange
believes that its proposed fees are
reasonable in that they are competitive
with those charged by other exchanges.
The Exchange believes its fees for
MPIDs are reasonable, equitable and not
unfairly discriminatory in that they
apply to all EEMs assigned MPID
equally and allow the Exchange to
recover operational and administrative
costs in assigning and maintaining such
services. The Exchange believes that its
proposed fees are reasonable in that
they are competitive with those charged
by other exchanges.
The Exchange believes that it is
appropriate to include in this fee filing
fees being assessed on non-Members
such as the Connectivity fees and the
API and Network Testing and
Certification fees described above.
Recent amendments to paragraph (A) of
Section 19(b)(3) 16 of the Exchange Act
now allow all self-regulatory
organization rule proposals establishing
or changing dues, fees or other charges
to become immediately effective upon
filing regardless of whether such dues,
fees or other charges are imposed on
16 15
E:\FR\FM\18JAN1.SGM
U.S.C. 78s(b)(3)(A).
18JAN1
4180
Federal Register / Vol. 78, No. 13 / Friday, January 18, 2013 / Notices
members of the self-regulatory
organization, non-members, or both.
Finally, the Exchange notes that it
operates in a highly competitive market
in which market participants can
readily favor competing venues. In such
an environment, the Exchange must
establish fees that are competitive with
other exchanges. For the reasons
described above, the Exchange believes
that the proposed amendments to the
MIAX Options Fee Schedule
appropriately reflect this competitive
environment.
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. Unilateral
action by MIAX in establishing fees for
services provided to its Members and
others using its facilities will not have
an impact on competition. As a new
entrant in the already highly
competitive environment for equity
options trading, MIAX does not have the
market power necessary to set prices for
services that are unreasonable or
unfairly discriminatory in violation of
the Exchange Act. MIAX’s proposed fees
for Membership and Systems
Connectivity, as described herein, are
comparable to and generally lower than
fees charged by other options exchanges
for the same or similar services.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited or received.
mstockstill on DSK4VPTVN1PROD with
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.17 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.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–00967 Filed 1–17–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–MIAX–2012–05 on the
subject line.
Paper Comments
[Release No. 34–68657; File No. SR–CHX–
2012–19]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Alter Fee
Schedule Relating to Port Charges
January 15, 2013.
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–MIAX–2012–05. 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 (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 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
publicly available. All submissions
should refer to File Number SR–MIAX–
2012–05 and should be submitted on or
before February 8, 2013.
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 December
31, 2012, the Chicago Stock Exchange,
Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CHX proposes to amend Exchange
Rules and its Schedule of Participant
Fees and Assessments (the ‘‘Fee
Schedule’’) to alter fees relating to port
charges. The Exchange proposes to
implement the fee change on January 1,
2013. The text of this proposed rule
change is available on the Exchange’s
Web site at https://www.chx.com/rules/
proposed_rules.htm, at the principal
office of the Exchange, 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
self-regulatory organization 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 those statements may be examined at
the places specified in Item IV below.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
17 15
U.S.C. 78s(b)(3)(A)(ii).
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]]>Agencies
[Federal Register Volume 78, Number 13 (Friday, January 18, 2013)]
[Notices]
[Pages 4175-4180]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00967]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68645; File No. SR-MIAX-2012-05]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the MIAX Options Fee Schedule
January 14, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 31, 2012, Miami International Securities Exchange LLC
(``Exchange'' or ``MIAX'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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 establish membership and system
connectivity fees applicable to Members and non-Members using services
provided by MIAX. While changes to the Exchange's Fee Schedule pursuant
to this proposal are effective upon filing, the Exchange has designated
that the proposed monthly Port Fees and the proposed monthly Member
Participant Identifier Fee be implemented beginning January 1, 2013.
The text of the proposed rule change is available on the Exchange's
Web site at https://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
[[Page 4176]]
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 purpose of the proposed rule change is to establish membership
and system connectivity fees applicable to Members and non-Members
using services provided by MIAX.
Membership Fees:
MIAX will assess Membership fees for Applications and Trading
Permits.
a. Application for MIAX Membership
A one-time application fee based upon the applicant's status as
either an Electronic Exchange Member (``EEM'') or as a Market Maker
will be assessed by MIAX. Applicants for MIAX Membership as an EEM will
be assessed a one-time Application Fee of $2,500.00. Applicants for
MIAX Membership as a Market Maker will be assessed a one-time
Application Fee of $3,000.00. The difference in the fee charged to EEMs
and Market Makers reflects the additional review and processing effort
needed for Market Maker applications. MIAX's one-time application fees
are similar to and generally lower than one time application fees in
place at the Chicago Board Options Exchange, Incorporated (``CBOE'')
($3,000 for an individual applicant and $5,000 for an applicant
organization) and at the International Securities Exchange, LLC
(``ISE'') ($7,500 for a Primary Market Maker, $5,500 for a Competitive
Market Maker and $3,500 for an Electronic Access Member).
Applicants for MIAX membership that apply for membership on or
before January 31, 2013 will not be assessed a fee for such
application. MIAX believes that this will provide incentive for
potential applicants to submit early applications, which should result
in maximizing potential order flow and liquidity as MIAX begins
trading, all to the benefit of the investing public. Applicants for
MIAX membership that apply for membership on or after February 1, 2013
will be subject to the Membership Application Fees described above.
b. Trading Permits
MIAX will issue Trading Permits that confer the ability to transact
on MIAX. There is no limit on the number of Trading Permits that may be
issued by MIAX; however MIAX has the authority to limit or decrease the
number of Trading Permits it has determined to issue provided it
complies with the provisions set forth in Rule 200(a) and Section
6(c)(4) of the Exchange Act.\3\
---------------------------------------------------------------------------
\3\ For a complete description of MIAX Trading Permits, see MIAX
Rule 200. See also 15 U.S.C. 78(f)(c)(4).
---------------------------------------------------------------------------
MIAX will assess monthly fees for Trading Permits depending upon
the category of Member that is issued a particular trading permit. EEMs
will be assessed a monthly fee of $1,000 for a Trading Permit.
Registered Market Makers (``RMMs'') will be assessed $3,000.00 per
month for a Trading Permit for an RMM assignment in up to 100 option
classes, $4,500.00 per month for a Trading Permit for an RMM assignment
in up to 250 option classes, or $6,000.00 per month for a Trading
Permit for an RMM assignment in all option classes listed on MIAX.
For the calculation of the monthly RMM Trading Permit Fees, the
number of classes is defined as the greatest number of classes the RMM
was assigned to quote in on any given day within the calendar month.
Primary Lead Market Makers (``PLMMs'') and Lead Market Makers
(``LMMs'') will be assessed the same monthly Trading Permit fees
applicable to RMMs described above. In addition to the RMM Trading
Permit fees, PLMMs and LMMs will be assessed an additional $1,000.00
per month for a Trading Permit. Thus, an LMM or PLMM will be assessed
$4,000.00 per month for a Trading Permit for an LMM or PLMM assignment
in up to 100 option classes, $5,500.00 per month for a Trading Permit
for an LMM or PLMM assignment in up to 250 option classes, or $7,000.00
per month for a Trading Permit for an LMM or PLMM assignment in all
option classes listed on MIAX.
MIAX monthly Trading Permit Fees are generally lower than monthly
trading permit fees in place at CBOE and the NASDAQ OMX PHLX LLC
(``PHLX''). The $1,000 monthly Trading Permit fee assessed to EEMs is
lower than the CBOE's monthly electronic access trading permit fee
($1,600) and the PHLX's monthly permit fee for members ($2,000). The
Monthly Trading Permit Fees assessed to MIAX Market Makers is readily
comparable to and lower than the monthly fees in place at PHLX for
Remote Streaming Quote Traders ($5,000 per month for less than 100
classes, $8,000 per month for more than 100 classes and less than 999
classes, and $11,000 per month for 1,000 or more classes).
Members receiving Trading Permits during the month will be assessed
Trading Permit Fees according to the above schedule, except that the
calculation of the Trading Permit fee for the first month in which the
Trading Permit is issued will be pro-rated based on the number of
trading days occurring after the date on which the Trading Permit was
in effect during that first month divided by the total number of
trading days in such month multiplied by the monthly rate.
Testing and Certification Fees:
a. API Testing and Certification Fee
Members
MIAX will assess a one-time Application Programming Interface
(``API'') testing and certification fee on EEMs and Market Makers. An
API makes it possible for Member software to communicate with MIAX
software applications, and is subject to Member testing with, and
certification by, MIAX. API testing and certification includes for EEMs
testing all available order types, new order entry, order management,
order throughput and mass order cancellation. For Market Makers, API
testing and certification also includes testing of all available quote
types, quote throughput, quote management and cancellation, Aggregate
Risk Manager settings and triggers, and confirmation of quotes within
the trading engines.
The one-time MIAX API Testing and Certification fees are based upon
the category of Member being tested and certified. EEMs will be
assessed a one-time API Testing and Certification fee of $1,000.00.
Market Makers will be assessed a one-time API Testing and Certification
fee of $2,500.00. The fee represents costs incurred by the Exchange as
it works with each Member while testing and certifying that the
Member's software systems communicate properly with MIAX. MIAX has set
a one-time fee rather than an hourly rate used by some of the other
exchanges so MIAX Members will know the full cost for the service prior
to beginning to use such services. Until recently, PHLX charged hourly
fees for use of its testing facility--a fee of $285 per hour for active
connection testing during normal operating hours and $333 per hour for
testing after normal hours.\4\ MIAX's one-time fees are comparable and
more cost effective to the Members than hourly rates at other
exchanges.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 63257 (November 5,
2010) 75 FR 69493 (November 12, 2010) (SR-PHLX 2010-155) Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Amend
Fees Assessed for Use of the Testing Facility.
---------------------------------------------------------------------------
In order to provide an incentive to prospective Members to apply
early for
[[Page 4177]]
membership and to engage in API testing and certification such that
they will be able to trade options on MIAX as soon as possible, API
Testing and Certification fees will be waived for all EEMs and Market
Makers that apply for MIAX membership and complete API testing and
certification on or before January 31, 2013. EEMs and Market Makers
that apply for MIAX membership or complete API testing and
certification on or after February 1, 2013 are subject to the Member
API Testing and Certification Fees as described above.
Non-Members
MIAX will assess a one-time API Testing and Certification fee of
$5,000.00 on third party vendors \5\ and Service Bureaus \6\ whose
software interfaces with MIAX software. As with Members, an API makes
it possible for third party vendors' and Service Bureaus' software to
communicate with MIAX software applications, and is subject to testing
with, and certification by, MIAX. The higher fee charged to such non-
Members reflects the greater amount of time spent by MIAX employees
testing and certifying non-Members. It has been MIAX's experience that
Member testing takes less time than non-Member testing because Members
have more experience testing these systems with exchanges; generally
fewer questions and issues arise during the testing and certification
process. Also, because third party vendors and Service Bureaus are
redistributing data and reselling services to other Members and market
participants the number and types of scenarios that need to be tested
are more numerous and complex than those tested and certified for a
single Member.
---------------------------------------------------------------------------
\5\ Third party vendors are subscribers of MIAX's market and
other data feeds, which they in turn use for redistribution
purposes. Third party vendors do not provide connectivity and
therefore are not subject to Network testing and certification.
\6\ A Service Bureau is a technology provider that offers and
supplies technology and technology services to a trading firm that
does not have its own proprietary system. The technology and
technology services supplied by Service Bureaus includes both
software applications and connectivity, thus Service Bureaus are
subject to both API testing and certification and Network testing
and certification.
---------------------------------------------------------------------------
b. Member Network Testing and Certification Fee
As described below under Connectivity Fees, MIAX will establish
electronic communication connections with Members and will assess
Members a one-time Testing and Certification Fee of $1,000.00 per
Member for a one Gigabit connection, and $4,000.00 per Member for a ten
Gigabit connection. Members will not be charged a Testing and
Certification Fee for any additional connections they obtain since the
additional connections will be from the same source and will have the
same internal technology.
c. Non-Member Network Testing and Certification Fee
MIAX will establish electronic connections with and will assess
Service Bureaus and Extranet Providers \7\ a one-time Testing and
Certification Fee of $2,000.00 for the initial one Gigabit connection
and $1,000 for each additional one Gigabit connection. In addition,
MIAX will assess Service Bureaus and Extranet Providers a Testing and
Certification Fee of $6,000.00 for the initial ten Gigabit connection
and $4,000.00 for each additional ten Gigabit connection.
---------------------------------------------------------------------------
\7\ An Extranet Provider is a technology provider that connects
with MIAX systems and in turn provides such connectivity to MIAX
participants that do not connect directly with MIAX. Extranet
Providers do not provide software interfaces with MIAX software
applications, thus Extranet Providers are not subject to API testing
and certification.
---------------------------------------------------------------------------
The Member and non-Member Network Testing and Certification fees
represent installation and support costs incurred by the Exchange as it
works with each Member and non-Member to make sure there are
appropriate electronic connections with MIAX. MIAX has set a one-time
fee for testing so MIAX Members and non-Members will know the full cost
for the service prior to beginning to use such services. The higher fee
charged to non-Members reflects the greater amount of time spent by
MIAX employees testing and certifying non-Members. It has been MIAX's
experience that Member network connectivity testing takes less time
than non-Member network connectivity testing because Members have more
experience testing these systems with exchanges; generally fewer
questions and issues arise during the testing and certification
process. In addition, non-Members are charged a discounted Network
Testing and Certification Fee for additional connections because each
connection will be used by different customers of the non-Member
Service Bureaus and Extranet Providers and will need to be individually
tested requiring more Exchange resources for testing and certification.
Connectivity Fees:
MIAX will assess fees to Members, Service Bureaus, and Extranet
Providers for electronic connections \8\ between those entities and
MIAX. The Connectivity fees are based upon the amount of bandwidth that
will be used by the Member, Service Bureau, or Extranet Provider. MIAX
currently offers connectivity with one (1) Gigabit, which connects the
Member, Service Bureau, or Extranet Provider to MIAX using a copper
cable, and ten (10) Gigabits, using fiber optic connections.
---------------------------------------------------------------------------
\8\ For purposes of this proposed rule change, the terms
``connectivity'' and ``connections'' refer to the physical
connections between Member and non-Member electronic networks and
the MIAX systems.
---------------------------------------------------------------------------
a. Member Network Connectivity Fee
MIAX will assess a monthly Member Network Connectivity fee of
$1,000 for a one Gigabit connection, and $5,000 for a ten Gigabit
connection. MIAX charges a higher fee for a ten Gigabit connection due
the higher costs of the fiber optic connection. MIAX's monthly Member
Network Connectivity fee is comparable to monthly fees charged for
similar connectivity at CBOE ($1,250 for a one Gigabit connection and
$4,500 for a ten Gigabit connection) and PHLX ($2,100 for a one Gigabit
connection and $5,000 for a ten Gigabit connection).
The first monthly Member Network Connectivity fee for all Members
will be assessed on a pro-rata basis, which is the number of trading
days remaining in the month divided by the total number of trading days
in the first month in which the fee was in effect multiplied by the
monthly rate. Thereafter, the Member Network Connectivity fee will be
pro-rated for new Members based on the number of trading days on which
the Member used the connectivity in its first month of trading on MIAX,
divided by the total number of trading days in such month multiplied by
the monthly rate.
b. Non-Member Network Connectivity Fee
MIAX will assess a monthly non-Member Network Connectivity fee to
Service Bureaus and Extranet Providers of $2,000.00 for a one Gigabit
connection, and $10,000.00 for a ten Gigabit connection. MIAX's monthly
Non-Member Network Connectivity fee is comparable to monthly fees
charged for similar connectivity at CBOE ($2,500 for a one Gigabit
connection and $7,500 for a ten Gigabit connection). MIAX assesses a
higher fee to Service Bureaus and Extranet Providers than to Members to
reflect the fact that Service Bureaus and Extranet Providers serve as
conduits to MIAX Members and non-Members that do not have their own
proprietary systems or do not directly connect to MIAX. The Service
Bureaus and Extranet Providers recover the cost of the MIAX Network
Connectivity fee
[[Page 4178]]
from their customers, resulting in a lower overall fee to Members and
non-Members using the services of such third party providers.
The non-Member Network Connectivity fee for the first month of
trading on MIAX will be assessed on a pro-rata basis in the same manner
as the Member Network Connectivity fee described above.
c. Pass-Through of External Connectivity Fees
MIAX will assess External Connectivity fees to Members and non-
Members that establish connections with MIAX through a third-party.
Fees charged to MIAX by third-party external vendors on behalf of a
Member or non-Member connecting to MIAX (including cross-connects),\9\
will be passed through to the Member or non-Member. External
Connectivity fees include one-time set-up fees and monthly charges
charged to MIAX by a third-party.
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\9\ A ``cross-connect'' occurs when the affected third-party
system is sited at the same data center where MIAX systems are
sited, and the third-party connects to MIAX through the data center,
rather than connecting directly to MIAX outside of the data center.
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The purpose of the External Connectivity fee is to recoup costs
incurred by MIAX in establishing connectivity with external vendors
acting on behalf of a Member or non-Member. MIAX will only pass-through
the actual costs it is charged by the third-party external vendors.
d. Port Fees
Once network connectivity is established, MIAX will assess fees for
access and services used by Members, Service Bureaus and Extranet
Providers. Known as ``Ports'', MIAX provides two types: a Financial
Information Exchange (``FIX'') Port,\10\ which allows Members to
electronically send orders in all products traded on the Exchange and
the MIAX Express Interface (``MEI'') \11\ Port, which allows Market
Makers to submit electronic quotes to the Exchange. MIAX will assess
monthly MEI Port fees on Market Makers based upon the number of MIAX
matching engines \12\ used by the Market Maker. Each Market Maker will
be allocated two MEI quoting ports for each matching engine they use.
For example, a Market Maker that wishes to make markets in just one
symbol would require the two MEI quoting ports in a single matching
engine; a Market Maker wishing to make markets in all symbols traded on
MIAX would require the two MEI quoting ports in each of the Exchange's
matching engines. The FIX Port and the MEI Port each include access to
MIAX's primary and secondary data centers and its disaster recovery
center. The proposed monthly Port Fees described below are scheduled to
be implemented beginning January 1, 2013.
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\10\ A FIX Port is an interface with MIAX systems that enables
the Port user (typically an EEM or a Market Maker) to submit orders
electronically to MIAX.
\11\ MIAX Express Interface is a connection to MIAX systems that
enables Market Makers to submit electronic quotes to MIAX.
\12\ A ``matching engine'' is a part of the MIAX electronic
system that processes options quotes and trades on a symbol-by-
symbol basis. Some matching engines will process option classes with
multiple root symbols, and other matching engines will be dedicated
to one single option root symbol (for example, options on SPY will
be processed by one single matching engine that is dedicated only to
SPY options). A particular root symbol may only be assigned to a
single designated matching engine. A particular root symbol may not
be assigned to multiple matching engines.
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FIX Port Fees
MIAX will assess monthly FIX Port fees on Members based upon the
number of FIX Ports used by the Member submitting orders to MIAX.
Although one FIX Port gives access to all products traded on MIAX, some
Members may choose to use more than one FIX Port. MIAX will assess a
monthly FIX Port fee of $250.00 for the first FIX Port provided to the
user, $150.00 per FIX Port for the second through fifth FIX Port
provided to the user (if applicable), and $50.00 per FIX Port for the
sixth FIX Port and any additional FIX Ports provided to the user (if
applicable). MIAX's monthly FIX Port fees are comparable to the Order
Entry Port Fee charged by PHLX ($500 per month per mnemonic with no
discount for multiple Ports), which includes a fee for assigning and
maintaining mnemonics. MIAX charges a separate fee for assigning and
maintaining mnemonics (known as Member Participant Identifier or
``MPID''). Taken together, the MIAX monthly FIX Port and the MPID fees
are less than the PHLX's monthly Order Entry Port Fee.
MEI Port Fees
MIAX will assess a monthly MEI Port fee of $1,000.00 for the first
matching engine on which the Market Maker has the two ports, $500.00
each for the second through fifth matching engines on which the Market
Maker has the two ports (if applicable), and $250.00 each for the sixth
matching engine and any additional matching engines on which the Market
Maker has the two ports (if applicable).
MEI Port fees will be capped at $1,000 per month per Market Maker
until the first full calendar month during which MIAX lists and trades
options overlying at least 100 underlying securities. Once MIAX begins
listing and trading options overlying at least 100 underlying
securities, MIAX will assess MEI Port fees as described above. MEI Port
fees will be assessed for the entire month during which MIAX begins
trading, regardless of the number of trading days that have already
occurred during such month prior to the commencement of trading on
MIAX. MEI Port fees will be assessed on a month-by-month basis.
e. MPID Fees
MIAX will assess monthly Member Participant Identifier (``MPID'')
\13\ fees on EEMs, based upon the number of MPIDs assigned to a
particular EEM in a given month. EEMs will be assessed a monthly MPID
fee of $200.00 for the first MPID assigned, $100.00 each for the second
through fifth MPID assigned, and $50.00 each for the sixth MPID and any
additional MPIDs assigned. MIAX assess MPID fees to cover the
administrative costs it incurs in assigning and managing these
identifiers for each EEM. As discussed above, MIAX's monthly MPID fee
together with its FIX Port fee are similar to and lower than the PHLX's
monthly Order Entry Port fee. The proposed monthly MPID Fees described
above are scheduled to be implemented beginning January 1, 2013.
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\13\ An MPID is a code used in the MIAX system to identify the
participant to MIAX and to the participant's Clearing Member
respecting trades executed on MIAX. Participants may use more than
one MPID.
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2. Statutory Basis
MIAX believes that its proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act \14\ in general, and furthers
the objectives of Sections 6(b)(4) and 6(b)(5) of the Act \15\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges.
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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4) and 78f(b)(5).
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The Exchange believes its one-time Membership Application fees are
reasonable, equitable and not unfairly discriminatory. As described in
the Purpose section, the one-time application fees are comparable to
application fees in place at other options exchanges and are designed
to recover costs associated with the processing of such applications.
Market Maker applicants are charged slightly more than EEM applicants
because of the additional work involved in processing a Market Maker's
application. MIAX believes it is
[[Page 4179]]
reasonable and equitable to waive the fee to applicants who apply for
membership on or before January 31, 2013. The waiver of such fees
provides incentives to interested applicants to apply early for MIAX
membership, which provides MIAX with potential order flow and liquidity
providers as it begins operations. The waiver will apply equally to all
applicants.
The Exchange believes its Trading Permit fees are reasonable,
equitable and not unfairly discriminatory. The Trading Permit fees are
lower than comparable fees at other exchanges as described in the
Purpose section above. The differentiation between Trading Permit fees
charged to EEMs and Market Makers reflects the additional Exchange
access provided to Market Makers and the additional technical,
regulatory and administrative costs associated with Market Makers' use
of the Exchange and its services.
MIAX believes its API and Network Testing and Certification fees
are a reasonable allocation of its costs and expenses among its Members
and other persons using its facilities since it is recovering the costs
associated with providing such infrastructure testing and certification
services. MIAX believes it is reasonable, equitable and not unfairly
discriminatory to assess different API and Network Testing and
Certification fees to EEMs and Market Makers. The interface between
Market Maker quoting software and MIAX systems is assessed higher API
and Network Testing and Certification fees because the Market Maker
software interface is more complex and has more functionality to
validate than the EEM's software interface requiring an increased level
of support and expertise. MIAX therefore believes that the higher
Member API and Network Testing and Certification fees applicable to
Market Makers are not unfairly discriminatory.
Additionally, MIAX believes it is reasonable, equitable and not
unfairly discriminatory to assess different API and Network Testing and
Certification fees to Members and non-Members. The higher fee charged
to non-Members reflects the greater amount of time spent by MIAX
employees testing and certifying non-Members. It has been MIAX's
experience that Member testing takes less time than non-Member testing
because Members have more experience testing these systems with
exchanges; generally fewer questions and issues arise during the
testing and certification process. Also, with respect to API testing
and certification because third party vendors and Service Bureaus are
redistributing data and reselling services to other Members and market
participants the number and types of scenarios that need to be tested
are more numerous and complex than those tested and certified for
Members. In addition, MIAX believes it is reasonable, equitable and not
unfairly discriminatory to assess non-Members a discounted Network
Testing and Certification Fee for additional connections because each
connection will be used by different customers of the non-Member
Service Bureaus and Extranet Providers and will need to be individually
tested requiring more Exchange resources for testing and certification.
Members will not be charged for additional connections because
additional network testing and certification will generally not be
necessary since the additional connections will be from the same source
and will have the same internal technology.
The Exchange believes that the proposed Connectivity Fees in
general constitute an equitable allocation of fees, and are not
unfairly discriminatory, because they allow the Exchange to recover
costs associated with offering access through the network connections
and access and services through the Ports, responding to customer
requests, configuring MIAX systems, programming API user specifications
and administering the various services. Access to MIAX market will be
offered on fair and non-discriminatory terms. The proposed Connectivity
Fees are also expected to offset the costs MIAX incurs in maintaining,
and implementing ongoing improvements to the trading systems, including
connectivity costs, costs incurred on gateway software and hardware
enhancements and resources dedicated to gateway development, quality
assurance, and technology support. The Exchange believes that its
proposed fees are reasonable in that they are competitive with those
charged by other exchanges. MIAX assesses a higher fee to Service
Bureaus and Extranet Providers than to Members to reflect the fact that
Service Bureaus and Extranet Providers serve as conduits to MIAX
Members and/or non-Members that do not have their own proprietary
systems or do not directly connect to MIAX. For the one monthly Network
Connectivity Fee charged by MIAX, Service Bureaus and Extranet Provider
may in turn provide connectivity to a number of Members and/or non-
Members. The Service Bureaus and Extranet Providers recover the cost of
the MIAX Network Connectivity Fee, plus a premium, from their
customers, which can still result in a lower overall fee to each Member
and/or non-Member using the services of such third party providers. In
allocating its costs among Members and users of its services, MIAX
believes it is equitable to seek to recover a greater portion of those
costs from Service Bureaus and Extranet Providers who profit from the
reselling of those Network Connectivity services.
MIAX believes it is reasonable, equitable and not unfairly
discriminatory to pass-through External Connectivity fees to Members
and non-Members that establish connections with MIAX through a third-
party. MIAX will only pass-through the actual costs it is charged by
third-party external vendors. MIAX believes it is reasonable and
equitable to recover costs charged it on behalf of a Member or non-
Member that establishes connections with MIAX through a third party.
MIAX believes it is reasonable, equitable and not unfairly
discriminatory to assess FIX and MEI Port Fees on Members who use such
services--the FIX Port enables Members to submit orders electronically
to the Exchange for processing and the MEI Port enables Market Makers
to submit quotes to the Exchange for processing. The amount charged for
the MEI Port is higher because it is more complex and has more
functionality than the FIX Port. Therefore, MIAX believes the higher
fee for the MEI Port is not unfairly discriminatory. The Exchange
believes that its proposed fees are reasonable in that they are
competitive with those charged by other exchanges.
The Exchange believes its fees for MPIDs are reasonable, equitable
and not unfairly discriminatory in that they apply to all EEMs assigned
MPID equally and allow the Exchange to recover operational and
administrative costs in assigning and maintaining such services. The
Exchange believes that its proposed fees are reasonable in that they
are competitive with those charged by other exchanges.
The Exchange believes that it is appropriate to include in this fee
filing fees being assessed on non-Members such as the Connectivity fees
and the API and Network Testing and Certification fees described above.
Recent amendments to paragraph (A) of Section 19(b)(3) \16\ of the
Exchange Act now allow all self-regulatory organization rule proposals
establishing or changing dues, fees or other charges to become
immediately effective upon filing regardless of whether such dues, fees
or other charges are imposed on
[[Page 4180]]
members of the self-regulatory organization, non-members, or both.
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\16\ 15 U.S.C. 78s(b)(3)(A).
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Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. In such an environment, the Exchange must establish
fees that are competitive with other exchanges. For the reasons
described above, the Exchange believes that the proposed amendments to
the MIAX Options Fee Schedule appropriately reflect this competitive
environment.
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. Unilateral action by MIAX in
establishing fees for services provided to its Members and others using
its facilities will not have an impact on competition. As a new entrant
in the already highly competitive environment for equity options
trading, MIAX does not have the market power necessary to set prices
for services that are unreasonable or unfairly discriminatory in
violation of the Exchange Act. MIAX's proposed fees for Membership and
Systems Connectivity, as described herein, are comparable to and
generally lower than fees charged by other options exchanges for the
same or similar services.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited or 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.\17\ 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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\17\ 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-MIAX-2012-05 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-MIAX-2012-05. 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 (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 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 publicly available. All
submissions should refer to File Number SR-MIAX-2012-05 and should be
submitted on or before February 8, 2013.
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\18\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00967 Filed 1-17-13; 8:45 am]
BILLING CODE 8011-01-P
