Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 22756-22759 [2015-09426]
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Federal Register / Vol. 80, No. 78 / Thursday, April 23, 2015 / Notices
control of the clearing agency or for
which it is responsible, and, in general,
to protect investors and the public
interest consistent with Section
17A(b)(3)(F) of the Exchange Act.8
Furthermore, the proposed changes
are limited to CME’s futures and swaps
clearing businesses, which mean they
are limited in their effect to products
that are under the exclusive jurisdiction
of the CFTC. As such, the proposed
changes are limited to CME’s activities
as a DCO clearing futures that are not
security futures and swaps that are not
security-based swaps. CME notes that
the policies of the CFTC with respect to
administering the CEA are comparable
to a number of the policies underlying
the Exchange Act, such as promoting
market transparency for over-thecounter derivatives markets, promoting
the prompt and accurate clearance of
transactions and protecting investors
and the public interest.
Because the proposed changes are
limited in their effect to CME’s futures
and swaps clearing businesses, the
proposed changes are properly
classified as effecting a change in an
existing service of CME that:
(a) Primarily affects the clearing operations
of CME with respect to products that are not
securities, including futures that are not
security futures, swaps that are not securitybased swaps or mixed swaps; and forwards
that are not security forwards; and
(b) does not significantly affect any
securities clearing operations of CME or any
rights or obligations of CME with respect to
securities clearing or persons using such
securities-clearing service.
As such, the changes are therefore
consistent with the requirements of
Section 17A of the Exchange Act 9 and
are properly filed under Section
19(b)(3)(A) 10 and Rule 19b–4(f)(4)(ii) 11
thereunder.
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
CME does not believe that the
proposed rule change will have any
impact, or impose any burden, on
competition. The proposed rules merely
enhance CME’s existing liquidity
framework by providing additional
liquidity resources and a framework for
establishment of additional highly
reliable prearranged funding
arrangements. Further, the changes are
limited to CME’s futures and swaps
clearing businesses and, as such, do not
affect the security-based swap clearing
activities of CME in any way and
8 15
U.S.C. 78q–1(b)(3)(F).
U.S.C. 78q–1.
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(4)(ii).
therefore do not impose any burden on
competition that is inappropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
CME has not solicited, and does not
intend to solicit, comments regarding
this proposed rule change. CME has not
received any unsolicited written
comments from interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective upon filing pursuant to Section
19(b)(3)(A) 12 of the Act and Rule 19b–
4(f)(4)(ii) 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.
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–
CME–2015–013 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–CME–2015–013. 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
9 15
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18:53 Apr 22, 2015
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 CME and on CME’s Web site at
https://www.cmegroup.com/marketregulation/rule-filings.html.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–CME–2015–013 and should
be submitted on or before May 14, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Brent J. Fields,
Secretary.
[FR Doc. 2015–09429 Filed 4–22–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74758; File No. SR–MIAX–
2015–27]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Its Fee Schedule
April 17, 2015.
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 April 7,
2015, Miami International Securities
Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the 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.
14 17
12 15
U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(4)(ii).
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CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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Federal Register / Vol. 80, No. 78 / Thursday, April 23, 2015 / Notices
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 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
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 its
current Priority Customer Rebate
Program (the ‘‘Program’’) to modify the
volume thresholds of tiers 1–5.3 Under
the Program, the Exchange proposes to
credit each Member the per contract
amount set forth in the table below
resulting from each Priority Customer 4
order transmitted by that Member which
is executed on the Exchange in all
multiply-listed option classes
(excluding mini-options, Priority
Customer-to-Priority Customer Orders,
PRIME AOC Responses, PRIME Contraside Orders, PRIME Orders for which
both the Agency and Contra-side Order
are Priority Customers, and executions
Percentage thresholds of national customer volume in multiply-listed options classes listed on
MIAX
(Monthly)
related to contracts that are routed to
one or more exchanges in connection
with the Options Order Protection and
Locked/Crossed Market Plan referenced
in MIAX Rule 1400), provided the
Member meets certain volume
thresholds in a month as described
below. For each Priority Customer order
transmitted by that Member which is
executed electronically on the Exchange
in MIAX Select Symbols, MIAX will
continue to credit each member at the
separate per contract rate for MIAX
Select Symbols.5 For each Priority
Customer order submitted into the
PRIME Auction as a PRIME Agency
Order, MIAX will continue to credit
each member at the separate per
contract rate for PRIME Agency Orders.6
The volume thresholds are calculated
based on the customer average daily
volume over the course of the month.
Volume will be recorded for and credits
will be delivered to the Member Firm
that submits the order to the Exchange.
Per contract
credit
0.00%–0.40% ...............................................................................................................................
Above 0.40%–0.75% ...................................................................................................................
Above 0.75%–1.75% ...................................................................................................................
Above 1.75%–2.40% ...................................................................................................................
Above 2.40% ...............................................................................................................................
$0.00
0.10
0.15
0.17
0.18
Per contract
credit in MIAX
select symbols
Per contract
credit for
PRIME agency
order
$0.00
0.10
0.20
0.20
0.20
$0.10
0.10
0.10
0.10
0.10
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Other aspects of the Program will
remain the same as before. Consistent
with the current Fee Schedule, the
Exchange will continue to aggregate the
contracts resulting from Priority
Customer orders transmitted and
executed electronically on the Exchange
from affiliated Members for purposes of
the thresholds above, provided there is
at least 75% common ownership
between the firms as reflected on each
firm’s Form BD, Schedule A. In the
event of a MIAX System outage or other
interruption of electronic trading on
MIAX, the Exchange will adjust the
national customer volume in multiplylisted options for the duration of the
outage. A Member may request to
receive its credit under the Priority
Customer Rebate Program as a separate
direct payment.
In addition, the rebate payments will
continue to be calculated from the first
executed contract at the applicable
threshold per contract credit with the
rebate payments made at the highest
achieved volume tier for each contract
traded in that month. For example, if
Member Firm XYZ, Inc. (‘‘XYZ’’) has
enough Priority Customer contracts to
achieve 3.25% of the national customer
volume in multiply-listed option
contracts during the month of April,
XYZ will receive a credit of $0.18 for
each Priority Customer contract
executed in the month of April.
The purpose of the Program is to
encourage Members to direct greater
Priority Customer trade volume to the
Exchange. Increased Priority Customer
volume will provide for greater
liquidity, which benefits all market
participants. The practice of
incentivizing increased retail customer
order flow in order to attract
professional liquidity providers
(Market-Makers) is, and has been,
commonly practiced in the options
markets. As such, marketing fee
programs,7 and customer posting
incentive programs,8 are based on
attracting public customer order flow.
The Program similarly intends to attract
Priority Customer order flow, which
will increase liquidity, thereby
providing greater trading opportunities
and tighter spreads for other market
3 See Securities Exchange Act Release Nos. 74007
(January 9, 2015), 80 FR 1537 (January 12, 2015)
(SR–MIAX–2014–69); 72799 (August 8, 2014), 79
FR 47698 (August 14, 2014) (SR–MIAX–2014–40);
72355 (June 10, 2014), 79 FR 34368 (June 16, 2014)
(SR–MIAX–2014–25); 71698 (March 12, 2014), 79
FR 15185 (March 18, 2014) (SR–MIAX–2014–12);
71283 (January 10, 2014), 79 FR 2914 (January 16,
2014) (SR–MIAX–2013–63); 71009 (December 6,
2013), 78 FR 75629 (December 12, 2013) (SR–
MIAX–2013–56).
4 The term ‘‘Priority Customer’’ means a person
or entity that (i) is not a broker or dealer in
securities, and (ii) does not place more than 390
orders in listed options per day on average during
a calendar month for its own beneficial accounts(s).
See MIAX Rule 100.
5 See Securities Exchange Release Nos. 74291
(February 18, 2015), 80 FR 9841 (February 24,
2015)(SR–MIAX–2015–09); 74288 (February 18,
2015), 80 FR 9837 (February 24, 2015) (SR–MIAX–
2015–08); 71700 (March 12, 2014), 79 FR 15188
(March 18, 2014) (SR–MIAX–2014–13); 72356 (June
10, 2014), 79 FR 34384 (June 16, 2014) (SR–MIAX–
2014–26); 72567 (July 8, 2014), 79 FR 40818 (July
14, 2014) (SR–MIAX–2014–34); 73328 (October 9,
2014), 79 FR 62230 (October 16, 2014) (SR–MIAX–
2014–50).
6 See Securities Exchange Release No. 72943
(August 28, 2014), 79 FR 52785 (September 4, 2014)
(SR–MIAX–2014–45).
7 See MIAX Fee Schedule, Section 1(b).
8 See NYSE Arca, Inc. Fees Schedule, page 4
(section titled ‘‘Customer Monthly Posting Credit
Tiers and Qualifications for Executions in Penny
Pilot Issues’’).
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participants and causing a
corresponding increase in order flow
from such other market participants.
The specific volume thresholds of the
Program’s tiers were set based upon
business determinations and an analysis
of current volume levels. The volume
thresholds are intended to incentivize
firms that route some Priority Customer
orders to the Exchange to increase the
number of orders that are sent to the
Exchange to achieve the next threshold
and to incent new participants to send
Priority Customer orders as well.
Increasing the number of orders sent to
the Exchange will in turn provide
tighter and more liquid markets, and
therefore attract more business overall.
Similarly, the different credit rates at
the different tier levels were based on an
analysis of revenue and volume levels
and are intended to provide increasing
‘‘rewards’’ for increasing the volume of
trades sent to the Exchange. The specific
amounts of the tiers and rates were set
in order to encourage suppliers of
Priority Customer order flow to reach
for higher tiers.
The credits paid out as part of the
program will be drawn from the general
revenues of the Exchange.9 The
Exchange calculates volume thresholds
on a monthly basis.
2. Statutory Basis
The Exchange believes that its
proposal to amend its fee schedule is
consistent with Section 6(b) of the Act 10
in general, and furthers the objectives of
Section 6(b)(4) of the Act 11 in
particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members.
The Exchange believes that the
proposed Priority Customer Rebate
Program is fair, equitable and not
unreasonably discriminatory. The
Program is reasonably designed because
it will incent providers of Priority
Customer order flow to send that
Priority Customer order flow to the
Exchange in order to receive a credit in
a manner that enables the Exchange to
improve its overall competitiveness and
strengthen its market quality for all
market participants. The Program is also
reasonably designed because the
proposed credits are within the range of
credits assessed by other exchanges
employing similar rebate programs. The
proposed rebate program is fair and
9 Despite providing credits under the Program,
the Exchange represents that it will continue to
have adequate resources to fund its regulatory
program and fulfill its responsibilities as a selfregulatory organization while the Program will be
in effect.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(4).
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equitable and not unreasonably
discriminatory because it will apply
equally to all Priority Customer orders.
All similarly situated Priority Customer
orders are subject to the same rebate
schedule, and access to the Exchange is
offered on terms that are not unfairly
discriminatory. In addition, the Program
is equitable and not unfairly
discriminatory because, while only
Priority Customer order flow qualifies
for the Program, an increase in Priority
Customer order flow will bring greater
volume and liquidity, which benefit all
market participants by providing more
trading opportunities and tighter
spreads. Similarly, offering increasing
credits for executing higher percentages
of total national customer volume
(increased credit rates at increased
volume tiers) is equitable and not
unfairly discriminatory because such
increased rates and tiers encourage
Members to direct increased amounts of
Priority Customer contracts to the
Exchange. Market participants want to
trade with Priority Customer order flow.
To the extent Priority Customer order
flow is increased by the proposal,
market participants will increasingly
compete for the opportunity to trade on
the Exchange including sending more
orders and providing narrower and
larger sized quotations in the effort to
trade with such Priority Customer order
flow. The resulting increased volume
and liquidity will benefit those
Members who receive the lower tier
levels, or do not qualify for the Program
at all, by providing more trading
opportunities and tighter spreads.
Limiting the Program to multiplylisted options classes listed on MIAX is
reasonable because those parties trading
heavily in multiply-listed classes will
receive a credit for such trading, and is
equitable and not unfairly
discriminatory because the Exchange
does not trade any singly-listed
products at this time. If at such time the
Exchange develops proprietary
products, the Exchange anticipates
having to devote a lot of resources to
develop them, and therefore would need
to retain funds collected in order to
recoup those expenditures.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that the proposed
change would increase both intermarket
and intramarket competition by
incenting Members to direct their
Priority Customer orders to the
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Exchange, which will enhance the
quality of quoting and increase the
volume of contracts traded here. To the
extent that there is additional
competitive burden on non-Priority
Customers, the Exchange believes that
this is appropriate because the rebate
program should incent Members to
direct additional order flow to the
Exchange and thus provide additional
liquidity that enhances the quality of its
markets and increases the volume of
contracts traded here. To the extent that
this purpose is achieved, all the
Exchange’s market participants should
benefit from the improved market
liquidity. Enhanced market quality and
increased transaction volume that
results from the anticipated increase in
order flow directed to the Exchange will
benefit all market participants and
improve competition on the Exchange.
The Exchange notes that it operates in
a highly competitive market in which
market participants can readily favor
competing venues if they deem fee
levels at a particular venue to be
excessive. In such an environment, the
Exchange must continually adjust its
fees to remain competitive with other
exchanges and to attract order flow to
the Exchange. The Exchange believes
that the proposed rule change reflects
this competitive environment because it
reduces the Exchange’s fees in a manner
that encourages market participants to
direct their customer order flow, to
provide liquidity, and to attract
additional transaction volume to the
Exchange. Given the robust competition
for volume among options markets,
many of which offer the same products,
implementing a volume based customer
rebate program to attract order flow like
the one being proposed in this filing is
consistent with the above-mentioned
goals of the Act. This is especially true
for the smaller options markets, such as
MIAX, which is competing for volume
with much larger exchanges that
dominate the options trading industry.
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 At any time
within 60 days of the filing of the
proposed rule change, the Commission
12 15
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U.S.C. 78s(b)(3)(A)(ii).
23APN1
Federal Register / Vol. 80, No. 78 / Thursday, April 23, 2015 / Notices
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:
mstockstill on DSK4VPTVN1PROD with NOTICES
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–2015–27 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–MIAX–2015–27. 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
offices 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
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18:53 Apr 22, 2015
Jkt 235001
available publicly. All submissions
should refer to File Number SR–MIAX–
2015–27, and should be submitted on or
May 14, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Brent J. Fields,
Secretary.
[FR Doc. 2015–09426 Filed 4–22–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74760; File No. SR–
NYSEMKT–2015–29]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Modifying the NYSE
Amex Options Fee Schedule Relating
to the Amex Customer Engagement
Program
April 17, 2015.
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 April 10,
2015, NYSE MKT LLC (the ‘‘Exchange’’
or ‘‘NYSE MKT’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to modify the
NYSE Amex Options Fee Schedule
(‘‘Fee Schedule’’) related to the Amex
Customer Engagement (‘‘ACE’’)
Program. The Exchange proposes to
implement the fee change effective
April 10, 2015. The text of the proposed
rule change is available on the
Exchange’s Web site at www.nyse.com,
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,
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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22759
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.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to amend
existing tiers and add a new tier to the
ACE Program.
Section I.E. of the Fee Schedule
describes the ACE Program,3 which
currently features four tiers expressed as
a percentage of total industry Customer
equity and ETF option average daily
volume (‘‘ADV’’).4 Order Flow Providers
(‘‘OFPs’’) receive per contract credits
solely for Electronic Customer volume
that the OFP, as agent, submits to the
Exchange.5 The ACE Program offers the
following two methods for OFPs to
receive credits:
1. By calculating, on a monthly basis,
the average daily Customer contract
volume an OFP executes Electronically
on the Exchange as a percentage of total
average daily industry Customer equity
and ETF options volume or 6;
2. By calculating, on a monthly basis,
the average daily contract volume an
OFP executes Electronically in all
participant types (i.e., Customer, Firm,
Broker-Dealer, NYSE Amex Options
Market Maker, Non-NYSE Amex
Options Market Maker, and Professional
Customer) on the Exchange, as a
3 See NYSE Amex Options Fee Schedule,
available here, https://www.theice.com/publicdocs/
nyse/markets/amex-options/NYSE_Amex_Options_
Fee_Schedule.pdf.
4 In calculating ADV, the Exchange utilizes
monthly reports published by the OCC for equity
options and ETF options that show cleared volume
by account type. See OCC Monthly Statistics
Reports, available here, https://www.theocc.com/
webapps/monthly-volume-reports (including for
equity options and ETF options volume, subtotaled
by exchange, along with OCC total industry
volume). The Exchange calculates the total OCC
volume for equity and ETF options that clear in the
Customer account type and divide this total by the
number of trading days for that month (i.e., any day
the Exchange is open for business). For example, in
a month having 21 trading days where there were
252,000,000 equity option and ETF option contracts
that cleared in the Customer account type, the
calculated ADV would be 12,000,000 (252,000,000/
21= 12,000,000).
5 Electronic Customer volume is volume executed
electronically through the Exchange System, on
behalf of an individual or organization that is not
a Broker-Dealer and who does not meet the
definition of a Professional Customer.
6 See supra n. 4
E:\FR\FM\23APN1.SGM
23APN1
]]>Agencies
[Federal Register Volume 80, Number 78 (Thursday, April 23, 2015)]
[Notices]
[Pages 22756-22759]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-09426]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74758; File No. SR-MIAX-2015-27]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule
April 17, 2015.
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 April 7, 2015, Miami International Securities Exchange LLC (``MIAX''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the 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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[[Page 22757]]
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 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 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 its current Priority Customer Rebate
Program (the ``Program'') to modify the volume thresholds of tiers 1-
5.\3\ Under the Program, the Exchange proposes to credit each Member
the per contract amount set forth in the table below resulting from
each Priority Customer \4\ order transmitted by that Member which is
executed on the Exchange in all multiply-listed option classes
(excluding mini-options, Priority Customer-to-Priority Customer Orders,
PRIME AOC Responses, PRIME Contra-side Orders, PRIME Orders for which
both the Agency and Contra-side Order are Priority Customers, and
executions related to contracts that are routed to one or more
exchanges in connection with the Options Order Protection and Locked/
Crossed Market Plan referenced in MIAX Rule 1400), provided the Member
meets certain volume thresholds in a month as described below. For each
Priority Customer order transmitted by that Member which is executed
electronically on the Exchange in MIAX Select Symbols, MIAX will
continue to credit each member at the separate per contract rate for
MIAX Select Symbols.\5\ For each Priority Customer order submitted into
the PRIME Auction as a PRIME Agency Order, MIAX will continue to credit
each member at the separate per contract rate for PRIME Agency
Orders.\6\ The volume thresholds are calculated based on the customer
average daily volume over the course of the month. Volume will be
recorded for and credits will be delivered to the Member Firm that
submits the order to the Exchange.
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\3\ See Securities Exchange Act Release Nos. 74007 (January 9,
2015), 80 FR 1537 (January 12, 2015) (SR-MIAX-2014-69); 72799
(August 8, 2014), 79 FR 47698 (August 14, 2014) (SR-MIAX-2014-40);
72355 (June 10, 2014), 79 FR 34368 (June 16, 2014) (SR-MIAX-2014-
25); 71698 (March 12, 2014), 79 FR 15185 (March 18, 2014) (SR-MIAX-
2014-12); 71283 (January 10, 2014), 79 FR 2914 (January 16, 2014)
(SR-MIAX-2013-63); 71009 (December 6, 2013), 78 FR 75629 (December
12, 2013) (SR-MIAX-2013-56).
\4\ The term ``Priority Customer'' means a person or entity that
(i) is not a broker or dealer in securities, and (ii) does not place
more than 390 orders in listed options per day on average during a
calendar month for its own beneficial accounts(s). See MIAX Rule
100.
\5\ See Securities Exchange Release Nos. 74291 (February 18,
2015), 80 FR 9841 (February 24, 2015)(SR-MIAX-2015-09); 74288
(February 18, 2015), 80 FR 9837 (February 24, 2015) (SR-MIAX-2015-
08); 71700 (March 12, 2014), 79 FR 15188 (March 18, 2014) (SR-MIAX-
2014-13); 72356 (June 10, 2014), 79 FR 34384 (June 16, 2014) (SR-
MIAX-2014-26); 72567 (July 8, 2014), 79 FR 40818 (July 14, 2014)
(SR-MIAX-2014-34); 73328 (October 9, 2014), 79 FR 62230 (October 16,
2014) (SR-MIAX-2014-50).
\6\ See Securities Exchange Release No. 72943 (August 28, 2014),
79 FR 52785 (September 4, 2014) (SR-MIAX-2014-45).
----------------------------------------------------------------------------------------------------------------
Per contract
Percentage thresholds of national customer volume in multiply- Per contract Per contract credit for
listed options classes listed on MIAX (Monthly) credit credit in MIAX PRIME agency
select symbols order
----------------------------------------------------------------------------------------------------------------
0.00%-0.40%..................................................... $0.00 $0.00 $0.10
Above 0.40%-0.75%............................................... 0.10 0.10 0.10
Above 0.75%-1.75%............................................... 0.15 0.20 0.10
Above 1.75%-2.40%............................................... 0.17 0.20 0.10
Above 2.40%..................................................... 0.18 0.20 0.10
----------------------------------------------------------------------------------------------------------------
Other aspects of the Program will remain the same as before.
Consistent with the current Fee Schedule, the Exchange will continue to
aggregate the contracts resulting from Priority Customer orders
transmitted and executed electronically on the Exchange from affiliated
Members for purposes of the thresholds above, provided there is at
least 75% common ownership between the firms as reflected on each
firm's Form BD, Schedule A. In the event of a MIAX System outage or
other interruption of electronic trading on MIAX, the Exchange will
adjust the national customer volume in multiply-listed options for the
duration of the outage. A Member may request to receive its credit
under the Priority Customer Rebate Program as a separate direct
payment.
In addition, the rebate payments will continue to be calculated
from the first executed contract at the applicable threshold per
contract credit with the rebate payments made at the highest achieved
volume tier for each contract traded in that month. For example, if
Member Firm XYZ, Inc. (``XYZ'') has enough Priority Customer contracts
to achieve 3.25% of the national customer volume in multiply-listed
option contracts during the month of April, XYZ will receive a credit
of $0.18 for each Priority Customer contract executed in the month of
April.
The purpose of the Program is to encourage Members to direct
greater Priority Customer trade volume to the Exchange. Increased
Priority Customer volume will provide for greater liquidity, which
benefits all market participants. The practice of incentivizing
increased retail customer order flow in order to attract professional
liquidity providers (Market-Makers) is, and has been, commonly
practiced in the options markets. As such, marketing fee programs,\7\
and customer posting incentive programs,\8\ are based on attracting
public customer order flow. The Program similarly intends to attract
Priority Customer order flow, which will increase liquidity, thereby
providing greater trading opportunities and tighter spreads for other
market
[[Page 22758]]
participants and causing a corresponding increase in order flow from
such other market participants.
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\7\ See MIAX Fee Schedule, Section 1(b).
\8\ See NYSE Arca, Inc. Fees Schedule, page 4 (section titled
``Customer Monthly Posting Credit Tiers and Qualifications for
Executions in Penny Pilot Issues'').
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The specific volume thresholds of the Program's tiers were set
based upon business determinations and an analysis of current volume
levels. The volume thresholds are intended to incentivize firms that
route some Priority Customer orders to the Exchange to increase the
number of orders that are sent to the Exchange to achieve the next
threshold and to incent new participants to send Priority Customer
orders as well. Increasing the number of orders sent to the Exchange
will in turn provide tighter and more liquid markets, and therefore
attract more business overall. Similarly, the different credit rates at
the different tier levels were based on an analysis of revenue and
volume levels and are intended to provide increasing ``rewards'' for
increasing the volume of trades sent to the Exchange. The specific
amounts of the tiers and rates were set in order to encourage suppliers
of Priority Customer order flow to reach for higher tiers.
The credits paid out as part of the program will be drawn from the
general revenues of the Exchange.\9\ The Exchange calculates volume
thresholds on a monthly basis.
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\9\ Despite providing credits under the Program, the Exchange
represents that it will continue to have adequate resources to fund
its regulatory program and fulfill its responsibilities as a self-
regulatory organization while the Program will be in effect.
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2. Statutory Basis
The Exchange believes that its proposal to amend its fee schedule
is consistent with Section 6(b) of the Act \10\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \11\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed Priority Customer Rebate
Program is fair, equitable and not unreasonably discriminatory. The
Program is reasonably designed because it will incent providers of
Priority Customer order flow to send that Priority Customer order flow
to the Exchange in order to receive a credit in a manner that enables
the Exchange to improve its overall competitiveness and strengthen its
market quality for all market participants. The Program is also
reasonably designed because the proposed credits are within the range
of credits assessed by other exchanges employing similar rebate
programs. The proposed rebate program is fair and equitable and not
unreasonably discriminatory because it will apply equally to all
Priority Customer orders. All similarly situated Priority Customer
orders are subject to the same rebate schedule, and access to the
Exchange is offered on terms that are not unfairly discriminatory. In
addition, the Program is equitable and not unfairly discriminatory
because, while only Priority Customer order flow qualifies for the
Program, an increase in Priority Customer order flow will bring greater
volume and liquidity, which benefit all market participants by
providing more trading opportunities and tighter spreads. Similarly,
offering increasing credits for executing higher percentages of total
national customer volume (increased credit rates at increased volume
tiers) is equitable and not unfairly discriminatory because such
increased rates and tiers encourage Members to direct increased amounts
of Priority Customer contracts to the Exchange. Market participants
want to trade with Priority Customer order flow. To the extent Priority
Customer order flow is increased by the proposal, market participants
will increasingly compete for the opportunity to trade on the Exchange
including sending more orders and providing narrower and larger sized
quotations in the effort to trade with such Priority Customer order
flow. The resulting increased volume and liquidity will benefit those
Members who receive the lower tier levels, or do not qualify for the
Program at all, by providing more trading opportunities and tighter
spreads.
Limiting the Program to multiply-listed options classes listed on
MIAX is reasonable because those parties trading heavily in multiply-
listed classes will receive a credit for such trading, and is equitable
and not unfairly discriminatory because the Exchange does not trade any
singly-listed products at this time. If at such time the Exchange
develops proprietary products, the Exchange anticipates having to
devote a lot of resources to develop them, and therefore would need to
retain funds collected in order to recoup those expenditures.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposed change would increase both intermarket and intramarket
competition by incenting Members to direct their Priority Customer
orders to the Exchange, which will enhance the quality of quoting and
increase the volume of contracts traded here. To the extent that there
is additional competitive burden on non-Priority Customers, the
Exchange believes that this is appropriate because the rebate program
should incent Members to direct additional order flow to the Exchange
and thus provide additional liquidity that enhances the quality of its
markets and increases the volume of contracts traded here. To the
extent that this purpose is achieved, all the Exchange's market
participants should benefit from the improved market liquidity.
Enhanced market quality and increased transaction volume that results
from the anticipated increase in order flow directed to the Exchange
will benefit all market participants and improve competition on the
Exchange. The Exchange notes that it operates in a highly competitive
market in which market participants can readily favor competing venues
if they deem fee levels at a particular venue to be excessive. In such
an environment, the Exchange must continually adjust its fees to remain
competitive with other exchanges and to attract order flow to the
Exchange. The Exchange believes that the proposed rule change reflects
this competitive environment because it reduces the Exchange's fees in
a manner that encourages market participants to direct their customer
order flow, to provide liquidity, and to attract additional transaction
volume to the Exchange. Given the robust competition for volume among
options markets, many of which offer the same products, implementing a
volume based customer rebate program to attract order flow like the one
being proposed in this filing is consistent with the above-mentioned
goals of the Act. This is especially true for the smaller options
markets, such as MIAX, which is competing for volume with much larger
exchanges that dominate the options trading industry.
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\ At any time within 60 days of the
filing of the proposed rule change, the Commission
[[Page 22759]]
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).
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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-2015-27 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-MIAX-2015-27. 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 offices of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-MIAX-2015-27,
and should be submitted on or May 14, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-09426 Filed 4-22-15; 8:45 am]
BILLING CODE 8011-01-P
