Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 79986-79989 [2015-32188]

Download as PDF 79986 Federal Register / Vol. 80, No. 246 / Wednesday, December 23, 2015 / Notices 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) of the Act 12 and paragraph (f) of Rule 19b–4 13 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change 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: tkelley on DSK3SPTVN1PROD 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– CBOE–2015–113 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–CBOE–2015–113. 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 the 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 available publicly. All submissions should refer to File Number SR–CBOE– 2015–113 and should be submitted on or before January 13, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Robert W. Errett, Deputy Secretary. VerDate Sep<11>2014 18:05 Dec 22, 2015 1. Purpose The Exchange proposes to amend its Fee Schedule to: (i) Increase the transaction fees for transactions in standard options in non-Penny Pilot classes for Public Customers 3 that are not a Priority Customer,4 Non-MIAX Market Makers, Non-Member BrokerDealers, and Firms,5 and (ii) increase the transaction fees for transactions in standard options in Penny Pilot classes for Firms. The Exchange also proposes to modify the transaction fees for transactions for Public Customers that are not a Priority Customer, Non-MIAX Market Makers, Non-Member BrokerDealers and Firms that achieve certain Priority Customer Rebate Program 6 volume tiers. The proposed changes are based on the similar fees of other competing options exchanges.7 The Exchange is also proposing proportional fee changes applicable to Mini-Options in non-Penny Pilot classes, except that such fees applicable to Firms will be increased from $0.04 to $0.07 per contract, as described below. The Mini-Options transaction fee in SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76674; File No. SR–MIAX– 2015–70] Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule December 17, 2015. Pursuant to the provisions of 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 December 4, 2015, Miami International Securities Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 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’’). 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. 1 15 Jkt 238001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b–4(f). 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. [FR Doc. 2015–32186 Filed 12–22–15; 8:45 am] 14 17 12 15 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change PO 00000 Frm 00170 Fmt 4703 Sfmt 4703 3 The term ‘‘Public Customer’’ means a person that is not a broker or dealer in securities. See Exchange Rule 100. 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). 5 This fee is assessed to an Electronic Exchange Member (‘‘EEM’’) that enters an order that is executed for an account identified by the EEM for clearing in the OCC ‘‘Firm’’ range. See Fee Schedule, Section 1)a)ii). The term ‘‘Electronic Exchange Member’’ means the holder of a Trading Permit who is not a Market Maker. Electronic Exchange Members are deemed ‘‘members’’ under the Exchange Act. See Exchange Rule 100. 6 See Fee Schedule, Section 1)a)iii). 7 See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; and Chicago Board Options Exchange, Incorporated, Fees Schedule, p. 1. E:\FR\FM\23DEN1.SGM 23DEN1 tkelley on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 80, No. 246 / Wednesday, December 23, 2015 / Notices Penny Pilot classes will remain unchanged. Specifically, the Exchange proposes to assess a $0.75 per contract fee for transactions in standard options in nonPenny Pilot classes by Public Customers that are not a Priority Customer. The Exchange also proposes to assess a $0.75 per contract fee for transactions in standard options in non-Penny Pilot classes by Non-MIAX Market Makers. Additionally, the Exchange proposes to assess a $0.75 per contract fee for transactions in standard options in nonPenny Pilot classes by Non-Member Broker-Dealers. The Exchange believes that these proposed fees are reasonable, equitable and not unfairly discriminatory because they are the same for all participants other than Priority Customers, who are not assessed transaction fees. Finally, the Exchange proposes to assess a $0.75 per contract fee for transactions in standard options in nonPenny Pilot classes by Firms. The Exchange believes that this proposed fee increase for Firms in non-Penny Pilot classes is equitable and not unfairly discriminatory. While Firms are currently charged significantly less (i.e., 20 cents per contract) than Public Customers that are not Priority Customers, non-MIAX Market Makers, and non-Member Broker-Dealers, the Exchange is simply proposing to place market participants in all of these categories on equal footing by increasing the transaction fees in non-Penny Pilot classes for such participants, including Firms, to an equal amount of $0.75 per contract. This fee is intended to balance the costs incurred by the Exchange for the execution of such orders, and to encourage the submission and execution of Priority Customer orders on the Exchange at no charge. The Exchange also proposes to increase the transaction fees assessed for transactions in standard options in Penny Pilot classes for Firms from $0.37 to $0.45 per contract. The Exchange believes that this proposed fee increase is reasonable, equitable and not unfairly discriminatory because it creates a more even playing field among Public Customers that are not Priority Customers, non-MIAX Market Makers, non-Member Broker-Dealers, and Firms. The Exchange initially established the transaction fees for Firms at a significantly lower rate than the other named categories of participants as a competitive measure to attract order flow from Firms. The Exchange believes that a variety of incentives, including but not limited to transaction fees, now achieve this goal. Accordingly, the Exchange believes that it is reasonable, VerDate Sep<11>2014 18:05 Dec 22, 2015 Jkt 238001 equitable and not unfairly discriminatory to increase the transaction fees in standard options for Firms in Penny Pilot classes to $0.45 per contract. This is still $0.02 less than the Penny Pilot class transaction fees for the other named categories of participants and the Exchange believes that it is still beneficial for competitive reasons to offer this fee to Firms. The Exchange proposes to continue to offer Public Customers that are not a Priority Customer, Non-MIAX Market Makers, Non-Member Broker-Dealers and Firms the opportunity to reduce these transaction fees by $0.02 per contract in standard options.8 In order to accomplish this reduction in transaction fees, any Member or its affiliates of at least 75% common ownership between the firms as reflected on each firm’s Form BD, Schedule A, that qualifies for Priority Customer Rebate Program volume tiers 3 or 4, and is: A Public Customer that is not a Priority Customer; a Non-MIAX Market Maker; a Non-Member BrokerDealer; or a Firm will be assessed a reduced transaction fee of $0.73 per contract for standard options in nonPenny Pilot option classes. Any Member or its affiliates of at least 75% common ownership between the firms as reflected on each firm’s Form BD, Schedule A, that qualifies for Priority Customer Rebate Program volume tiers 3 or 4 and is a Firm will be assessed a reduced transaction fee of $0.43 per contract in Penny Pilot classes and $0.73 per contract in non-Penny Pilot classes. The Exchange believes that these incentives will encourage these market participants to transact a greater number of orders on the Exchange. The Exchange is also proposing to increase the transaction fees for MiniOptions in non-Penny classes from $0.06 to $0.07 for Public Customers that are not Priority Customers, Non-MIAX Market Makers and Non-Member Broker-Dealers. This represents a proportional increase in the applicable transaction fees for standard options in non-Penny Pilot classes. The Exchange is also proposing to increase the MiniOption fee in non-Penny Pilot classes for Firms from its current $0.04 per contract to $0.07 per contract. This also represents a proportional increase relative to the proposed fees for nonPenny Pilot classes in standard options, placing Firms on an even playing field with other non-Priority Customer participants in Mini-Options. 8 See Securities Exchange Release Nos. 72988 (September 4, 2014), 79 FR 53808 (September 10, 2014) (SR–MIAX–2014–46); 72989 (September 4, 2014), 79 FR 53792 (September 10, 2014) (SR– MIAX–2014–47). PO 00000 Frm 00171 Fmt 4703 Sfmt 4703 79987 2. Statutory Basis The Exchange believes that its proposal to amend its Fee Schedule is consistent with Section 6(b) of the Act 9 in general, and furthers the objectives of Section 6(b)(4) of the Act 10 in particular, in that it is an equitable allocation of reasonable fees and other charges among Exchange members and issuers and other persons using its facilities. The Exchange’s proposal to increase the transaction fees is reasonable because the Exchange’s fees will remain competitive with fees at other options exchanges.11 The Exchange’s proposal to increase the transaction fees for these market participants is equitable and not unfairly discriminatory because the increase applies equally to all of the participants in each category of market participant. The Exchange does not assess transactions fees on Priority Customers because Priority Customer order flow enhances liquidity on the Exchange for the benefit of all market participants by providing more trading opportunities, which attracts Market Makers and other market participants. An increase in the activity of these market participants in turn facilitates tighter spreads, which may cause an additional corresponding increase in order flow from other market participants. MIAX Market Makers are assessed lower transaction fees as compared to Public Customers that are not a Priority Customer, Non-MIAX Market Makers, Non-Member BrokerDealers, and Firms because they have market-making obligations and regulatory requirements, which normally do not apply to market participants that are not MIAX Market Makers.12 MIAX Market Makers have obligations to make continuous markets, engage in a course of dealings reasonably calculated to contribute to the maintenance of a fair and orderly market, and not make bids or offers or enter into transactions that are inconsistent with a course of dealings. In addition, Members are subject to other fees and dues associated with their membership to the Exchange that do not apply to non-Members, and the instant proposal recognizes the differing contributions made to the liquidity and trading environment on the Exchange by these market participants. The $0.75 per contract fee for transactions in standard options in non-Penny Pilot classes by 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 11 See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; and Chicago Board Options Exchange, Incorporated, Fees Schedule, p. 1. 12 See Exchange Rules 603 and 604. 10 15 E:\FR\FM\23DEN1.SGM 23DEN1 tkelley on DSK3SPTVN1PROD with NOTICES 79988 Federal Register / Vol. 80, No. 246 / Wednesday, December 23, 2015 / Notices Public Customers that are not a Priority Customer, Non-MIAX Market Makers, Non-Member Broker-Dealers and Firms are reasonable, equitable and not unfairly discriminatory because they are the same for all market participants other than Priority Customers, who are not assessed transaction fees. The Exchange believes that the proposed fee increase for standard options in Penny Pilot classes for Firms is reasonable, equitable and not unfairly discriminatory because it creates a more even playing field among Public Customers that are not Priority Customers, non-MIAX Market Makers, non-Member Broker-Dealers, and Firms. The Exchange further believes that the proposed increase in transaction fees in Mini-Options in non-Penny Pilot classes for Firms from its current $0.04 per contract to $0.07 per contract is reasonable. equitable, and not unfairly discriminatory because it simply represents a proportional increase relative to the proposed fees for nonPenny Pilot classes in standard options, placing Firms on an even playing field with other non-Priority Customer participants in Mini-Options. The Exchange’s proposal to offer Public Customers that are not a Priority Customer, Non-MIAX Market Makers, Non-Member Broker-Dealers and Firms the continued opportunity to reduce transaction fees by $0.02 per contract in standard options is reasonable because the Exchange desires to offer all such market participants an opportunity to lower their transaction fees. The Exchange’s proposal to offer such market participants the continued opportunity to reduce transaction fees by $0.02 per contract in standard options, provided certain criteria are met, is equitable and not unfairly discriminatory because the Exchange will offer all market participants that are charged transaction fees a means to reduce such transaction fees by reaching volume tiers in the Priority Customer Rebate Program. The Exchange believes that the opportunity to lower transaction fees through incentives to transact Priority Customer order flow benefits all market participants. The Exchange believes that the proposal to allow the aggregation of trading activity of Members and their affiliates for purposes of the fee reduction is fair, equitable and not unreasonably discriminatory. The Exchange believes the proposed rule change is reasonable because it would allow aggregation of the trading activity of qualified affiliates only in very narrow circumstances, namely, where the affiliate meets the definition of an ‘‘affiliate’’ as stated in the Fee Schedule. VerDate Sep<11>2014 18:05 Dec 22, 2015 Jkt 238001 Furthermore, other exchanges and MIAX have rules that permit the aggregation of the trading activity of affiliated entities for the purposes of calculating and assessing certain fees.13 The Exchange believes that the opportunity for all such market participants to lower transaction fees by transacting greater Priority Customer order flow in turn benefits all market participants. The Exchange believes that its proposal to assess transaction fees in non-Penny Pilot options classes, which differs from Penny Pilot options classes, is consistent with other options markets that also assess different transaction fees for non-Penny Pilot options classes as compared to Penny Pilot options classes. The Exchange believes that establishing different pricing for nonPenny Pilot options and Penny Pilot options is reasonable, equitable, and not unfairly discriminatory because Penny Pilot options are more liquid options as compared to non-Penny Pilot options. Additionally, other competing options exchanges differentiate pricing in a similar manner.14 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposal is similar to the transaction fees found on other options exchanges; therefore, the Exchange believes the proposal is consistent with robust competition by increasing the intermarket competition for order flow from market participants. The proposal more closely aligns the fees for Public Customers that are not a Priority Customer, Non-MIAX Market Makers, Non-Member Broker-dealers and Firms on the Exchange to those of other exchanges for the same market participants. To the extent that there is additional competitive burden on nonMember market participants, the Exchange believes that this is appropriate because charging nonMembers higher transaction fees is a common practice amongst exchanges, and because Members are subject to other fees and dues associated with their membership to the Exchange that do not apply to non-Members. 13 See, e.g., NASDAQ OMX PHLX LLC Pricing Schedule Preface; and Chicago Board Options Exchange, Incorporated, Fees Schedule, Footnote 10. 14 See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; NYSE Amex Options Fee Schedule, p. 6; Chicago Board Options Exchange, Incorporated, Fees Schedule, p. 1; NASDAQ OMX BX Options Pricing Schedule, Section 2. PO 00000 Frm 00172 Fmt 4703 Sfmt 4703 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. The Exchange believes that the proposal reflects this competitive environment. 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,15 and Rule 19b–4(f)(2) 16 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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–2015–70 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange 15 15 16 17 E:\FR\FM\23DEN1.SGM U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 23DEN1 Federal Register / Vol. 80, No. 246 / Wednesday, December 23, 2015 / Notices Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–MIAX–2015–70. 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 the 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 available publicly. All submissions should refer to File Number SR–MIAX– 2015–70 and should be submitted on or before January 13, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–32188 Filed 12–22–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 31944; 812–14415] Altegris KKR Commitments Master Fund, et al.; Notice of Application December 17, 2015. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application under section 6(c) of the Investment Company Act of 1940 (the ‘‘Act’’) for an exemption from sections 18(c) and 18(i) of the Act and for an order pursuant to tkelley on DSK3SPTVN1PROD with NOTICES AGENCY: 17 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:05 Dec 22, 2015 Jkt 238001 section 17(d) of the Act and rule 17d– 1 under the Act. Summary of Application: Applicants request an order to permit certain registered closed-end management investment companies to issue multiple classes of shares of beneficial interest (‘‘Shares’’) and to impose asset-based service and/or distribution fees and contingent deferred sales loads (‘‘CDSCs’’). Applicants: Altegris KKR Commitments Master Fund (the ‘‘Fund’’), Altegris Advisors, L.L.C. (the ‘‘Adviser’’) and Altegris Investments, L.L.C. (the ‘‘Distributor’’). Filing Dates: The application was filed on January 12, 2015, and amended on August 26, 2015. Hearing or Notification of Hearing: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on January 11, 2016, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090; Applicants, 1200 Prospect Street, Suite 400, La Jolla, CA 92037. FOR FURTHER INFORMATION CONTACT: Kieran G. Brown, Senior Counsel, at (202) 551–6773 or Daniele Marchesani, Branch Chief, at (202) 551–6821 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s Web site by searching for the file number, or an applicant using the Company name box, at https:// www.sec.gov/search/search.htm or by calling (202) 551–8090. Applicants’ Representations 1. The Fund is a continuously offered closed-end management investment company registered under the Act and organized as a Delaware statutory trust. PO 00000 Frm 00173 Fmt 4703 Sfmt 4703 79989 The Fund currently serves as the master fund in a master-feeder structure with one feeder fund.1 If the requested relief is granted, the feeder fund will be dissolved promptly and the Fund will no longer operate within a master-feeder structure. The Fund operates as a ‘‘fund of funds’’ that intends to invest in private equity funds (‘‘Investment Funds’’) and in co-investment opportunities in operating companies that are presented by one or more Investment Funds (‘‘Co-Investment Opportunities’’). In particular, the Fund intends to invest significantly in Investment Funds that are sponsored or advised by Kohlberg Kravis Roberts & Co. L.P. or an affiliate (collectively, ‘‘KKR’’) and Co-Investment Opportunities presented by such KKRadvised Investment Funds. 2. The Adviser, a Delaware limited liability company, is registered as an investment adviser under the Investment Advisers Act of 1940. The Adviser serves as investment adviser to the Fund. The Distributor, a brokerdealer registered under the Securities Exchange Act of 1934 (‘‘1934 Act’’), acts as the distributor of the Fund. The Distributor is under common control with the Adviser and is an affiliated person, as defined in section 2(a)(3) of the Act, of the Adviser. 3. The Fund continuously offers its Shares 2 to persons who are ‘‘accredited investors,’’ as defined in Regulation D under the Securities Act of 1933, as amended (the ‘‘Securities Act’’). Shares of the Fund are not listed on any securities exchange and do not trade on an over-the-counter system such as NASDAQ. Applicants do not expect that any secondary market will develop for the Shares. 4. The Fund currently offers a single class of Shares (the ‘‘Initial Class’’) at net asset value per share without a sales load and without an annual asset-based service and/or distribution fee. The Fund proposes to issue multiple classes of Shares and specifically proposes to offer a new Share class (the ‘‘New Class’’) at net asset value that may (but would not necessarily) be subject to a front-end sales load and an annual asset-based service and/or distribution fee. The Fund intends to continue to offer Initial Class Shares, without a sales load and without a service and/or distribution fee. 5. In order to provide a limited degree of liquidity to shareholders, the Fund 1 The feeder fund is Altegris KKR Commitments Fund. 2 ‘‘Shares’’ includes any other equivalent designation of a proportionate ownership interest of the Fund. E:\FR\FM\23DEN1.SGM 23DEN1

Agencies

[Federal Register Volume 80, Number 246 (Wednesday, December 23, 2015)]
[Notices]
[Pages 79986-79989]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32188]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76674; File No. SR-MIAX-2015-70]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Its Fee Schedule

December 17, 2015.
    Pursuant to the provisions of 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 December 4, 2015, Miami International 
Securities Exchange LLC (``MIAX'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by the Exchange. The Commission is publishing this notice 
to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \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'').
    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 Fee Schedule to: (i) Increase 
the transaction fees for transactions in standard options in non-Penny 
Pilot classes for Public Customers \3\ that are not a Priority 
Customer,\4\ Non-MIAX Market Makers, Non-Member Broker-Dealers, and 
Firms,\5\ and (ii) increase the transaction fees for transactions in 
standard options in Penny Pilot classes for Firms. The Exchange also 
proposes to modify the transaction fees for transactions for Public 
Customers that are not a Priority Customer, Non-MIAX Market Makers, 
Non-Member Broker-Dealers and Firms that achieve certain Priority 
Customer Rebate Program \6\ volume tiers. The proposed changes are 
based on the similar fees of other competing options exchanges.\7\
---------------------------------------------------------------------------

    \3\ The term ``Public Customer'' means a person that is not a 
broker or dealer in securities. See Exchange Rule 100.
    \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).
    \5\ This fee is assessed to an Electronic Exchange Member 
(``EEM'') that enters an order that is executed for an account 
identified by the EEM for clearing in the OCC ``Firm'' range. See 
Fee Schedule, Section 1)a)ii). The term ``Electronic Exchange 
Member'' means the holder of a Trading Permit who is not a Market 
Maker. Electronic Exchange Members are deemed ``members'' under the 
Exchange Act. See Exchange Rule 100.
    \6\ See Fee Schedule, Section 1)a)iii).
    \7\ See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; and 
Chicago Board Options Exchange, Incorporated, Fees Schedule, p. 1.
---------------------------------------------------------------------------

    The Exchange is also proposing proportional fee changes applicable 
to Mini-Options in non-Penny Pilot classes, except that such fees 
applicable to Firms will be increased from $0.04 to $0.07 per contract, 
as described below. The Mini-Options transaction fee in

[[Page 79987]]

Penny Pilot classes will remain unchanged.
    Specifically, the Exchange proposes to assess a $0.75 per contract 
fee for transactions in standard options in non-Penny Pilot classes by 
Public Customers that are not a Priority Customer. The Exchange also 
proposes to assess a $0.75 per contract fee for transactions in 
standard options in non-Penny Pilot classes by Non-MIAX Market Makers. 
Additionally, the Exchange proposes to assess a $0.75 per contract fee 
for transactions in standard options in non-Penny Pilot classes by Non-
Member Broker-Dealers. The Exchange believes that these proposed fees 
are reasonable, equitable and not unfairly discriminatory because they 
are the same for all participants other than Priority Customers, who 
are not assessed transaction fees.
    Finally, the Exchange proposes to assess a $0.75 per contract fee 
for transactions in standard options in non-Penny Pilot classes by 
Firms. The Exchange believes that this proposed fee increase for Firms 
in non-Penny Pilot classes is equitable and not unfairly 
discriminatory. While Firms are currently charged significantly less 
(i.e., 20 cents per contract) than Public Customers that are not 
Priority Customers, non-MIAX Market Makers, and non-Member Broker-
Dealers, the Exchange is simply proposing to place market participants 
in all of these categories on equal footing by increasing the 
transaction fees in non-Penny Pilot classes for such participants, 
including Firms, to an equal amount of $0.75 per contract. This fee is 
intended to balance the costs incurred by the Exchange for the 
execution of such orders, and to encourage the submission and execution 
of Priority Customer orders on the Exchange at no charge.
    The Exchange also proposes to increase the transaction fees 
assessed for transactions in standard options in Penny Pilot classes 
for Firms from $0.37 to $0.45 per contract. The Exchange believes that 
this proposed fee increase is reasonable, equitable and not unfairly 
discriminatory because it creates a more even playing field among 
Public Customers that are not Priority Customers, non-MIAX Market 
Makers, non-Member Broker-Dealers, and Firms. The Exchange initially 
established the transaction fees for Firms at a significantly lower 
rate than the other named categories of participants as a competitive 
measure to attract order flow from Firms. The Exchange believes that a 
variety of incentives, including but not limited to transaction fees, 
now achieve this goal. Accordingly, the Exchange believes that it is 
reasonable, equitable and not unfairly discriminatory to increase the 
transaction fees in standard options for Firms in Penny Pilot classes 
to $0.45 per contract. This is still $0.02 less than the Penny Pilot 
class transaction fees for the other named categories of participants 
and the Exchange believes that it is still beneficial for competitive 
reasons to offer this fee to Firms.
    The Exchange proposes to continue to offer Public Customers that 
are not a Priority Customer, Non-MIAX Market Makers, Non-Member Broker-
Dealers and Firms the opportunity to reduce these transaction fees by 
$0.02 per contract in standard options.\8\ In order to accomplish this 
reduction in transaction fees, any Member or its affiliates of at least 
75% common ownership between the firms as reflected on each firm's Form 
BD, Schedule A, that qualifies for Priority Customer Rebate Program 
volume tiers 3 or 4, and is: A Public Customer that is not a Priority 
Customer; a Non-MIAX Market Maker; a Non-Member Broker-Dealer; or a 
Firm will be assessed a reduced transaction fee of $0.73 per contract 
for standard options in non-Penny Pilot option classes. Any Member or 
its affiliates of at least 75% common ownership between the firms as 
reflected on each firm's Form BD, Schedule A, that qualifies for 
Priority Customer Rebate Program volume tiers 3 or 4 and is a Firm will 
be assessed a reduced transaction fee of $0.43 per contract in Penny 
Pilot classes and $0.73 per contract in non-Penny Pilot classes. The 
Exchange believes that these incentives will encourage these market 
participants to transact a greater number of orders on the Exchange.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Release Nos. 72988 (September 4, 
2014), 79 FR 53808 (September 10, 2014) (SR-MIAX-2014-46); 72989 
(September 4, 2014), 79 FR 53792 (September 10, 2014) (SR-MIAX-2014-
47).
---------------------------------------------------------------------------

    The Exchange is also proposing to increase the transaction fees for 
Mini-Options in non-Penny classes from $0.06 to $0.07 for Public 
Customers that are not Priority Customers, Non-MIAX Market Makers and 
Non-Member Broker-Dealers. This represents a proportional increase in 
the applicable transaction fees for standard options in non-Penny Pilot 
classes. The Exchange is also proposing to increase the Mini-Option fee 
in non-Penny Pilot classes for Firms from its current $0.04 per 
contract to $0.07 per contract. This also represents a proportional 
increase relative to the proposed fees for non-Penny Pilot classes in 
standard options, placing Firms on an even playing field with other 
non-Priority Customer participants in Mini-Options.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \9\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \10\ in particular, in 
that it is an equitable allocation of reasonable fees and other charges 
among Exchange members and issuers and other persons using its 
facilities.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange's proposal to increase the transaction fees is 
reasonable because the Exchange's fees will remain competitive with 
fees at other options exchanges.\11\ The Exchange's proposal to 
increase the transaction fees for these market participants is 
equitable and not unfairly discriminatory because the increase applies 
equally to all of the participants in each category of market 
participant. The Exchange does not assess transactions fees on Priority 
Customers because Priority Customer order flow enhances liquidity on 
the Exchange for the benefit of all market participants by providing 
more trading opportunities, which attracts Market Makers and other 
market participants. An increase in the activity of these market 
participants in turn facilitates tighter spreads, which may cause an 
additional corresponding increase in order flow from other market 
participants. MIAX Market Makers are assessed lower transaction fees as 
compared to Public Customers that are not a Priority Customer, Non-MIAX 
Market Makers, Non-Member Broker-Dealers, and Firms because they have 
market-making obligations and regulatory requirements, which normally 
do not apply to market participants that are not MIAX Market 
Makers.\12\ MIAX Market Makers have obligations to make continuous 
markets, engage in a course of dealings reasonably calculated to 
contribute to the maintenance of a fair and orderly market, and not 
make bids or offers or enter into transactions that are inconsistent 
with a course of dealings. In addition, Members are subject to other 
fees and dues associated with their membership to the Exchange that do 
not apply to non-Members, and the instant proposal recognizes the 
differing contributions made to the liquidity and trading environment 
on the Exchange by these market participants. The $0.75 per contract 
fee for transactions in standard options in non-Penny Pilot classes by

[[Page 79988]]

Public Customers that are not a Priority Customer, Non-MIAX Market 
Makers, Non-Member Broker-Dealers and Firms are reasonable, equitable 
and not unfairly discriminatory because they are the same for all 
market participants other than Priority Customers, who are not assessed 
transaction fees.
---------------------------------------------------------------------------

    \11\ See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; and 
Chicago Board Options Exchange, Incorporated, Fees Schedule, p. 1.
    \12\ See Exchange Rules 603 and 604.
---------------------------------------------------------------------------

    The Exchange believes that the proposed fee increase for standard 
options in Penny Pilot classes for Firms is reasonable, equitable and 
not unfairly discriminatory because it creates a more even playing 
field among Public Customers that are not Priority Customers, non-MIAX 
Market Makers, non-Member Broker-Dealers, and Firms.
    The Exchange further believes that the proposed increase in 
transaction fees in Mini-Options in non-Penny Pilot classes for Firms 
from its current $0.04 per contract to $0.07 per contract is 
reasonable. equitable, and not unfairly discriminatory because it 
simply represents a proportional increase relative to the proposed fees 
for non-Penny Pilot classes in standard options, placing Firms on an 
even playing field with other non-Priority Customer participants in 
Mini-Options.
    The Exchange's proposal to offer Public Customers that are not a 
Priority Customer, Non-MIAX Market Makers, Non-Member Broker-Dealers 
and Firms the continued opportunity to reduce transaction fees by $0.02 
per contract in standard options is reasonable because the Exchange 
desires to offer all such market participants an opportunity to lower 
their transaction fees. The Exchange's proposal to offer such market 
participants the continued opportunity to reduce transaction fees by 
$0.02 per contract in standard options, provided certain criteria are 
met, is equitable and not unfairly discriminatory because the Exchange 
will offer all market participants that are charged transaction fees a 
means to reduce such transaction fees by reaching volume tiers in the 
Priority Customer Rebate Program. The Exchange believes that the 
opportunity to lower transaction fees through incentives to transact 
Priority Customer order flow benefits all market participants.
    The Exchange believes that the proposal to allow the aggregation of 
trading activity of Members and their affiliates for purposes of the 
fee reduction is fair, equitable and not unreasonably discriminatory. 
The Exchange believes the proposed rule change is reasonable because it 
would allow aggregation of the trading activity of qualified affiliates 
only in very narrow circumstances, namely, where the affiliate meets 
the definition of an ``affiliate'' as stated in the Fee Schedule. 
Furthermore, other exchanges and MIAX have rules that permit the 
aggregation of the trading activity of affiliated entities for the 
purposes of calculating and assessing certain fees.\13\ The Exchange 
believes that the opportunity for all such market participants to lower 
transaction fees by transacting greater Priority Customer order flow in 
turn benefits all market participants.
---------------------------------------------------------------------------

    \13\ See, e.g., NASDAQ OMX PHLX LLC Pricing Schedule Preface; 
and Chicago Board Options Exchange, Incorporated, Fees Schedule, 
Footnote 10.
---------------------------------------------------------------------------

    The Exchange believes that its proposal to assess transaction fees 
in non-Penny Pilot options classes, which differs from Penny Pilot 
options classes, is consistent with other options markets that also 
assess different transaction fees for non-Penny Pilot options classes 
as compared to Penny Pilot options classes. The Exchange believes that 
establishing different pricing for non-Penny Pilot options and Penny 
Pilot options is reasonable, equitable, and not unfairly discriminatory 
because Penny Pilot options are more liquid options as compared to non-
Penny Pilot options. Additionally, other competing options exchanges 
differentiate pricing in a similar manner.\14\
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    \14\ See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; NYSE 
Amex Options Fee Schedule, p. 6; Chicago Board Options Exchange, 
Incorporated, Fees Schedule, p. 1; NASDAQ OMX BX Options Pricing 
Schedule, Section 2.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposal is 
similar to the transaction fees found on other options exchanges; 
therefore, the Exchange believes the proposal is consistent with robust 
competition by increasing the intermarket competition for order flow 
from market participants. The proposal more closely aligns the fees for 
Public Customers that are not a Priority Customer, Non-MIAX Market 
Makers, Non-Member Broker-dealers and Firms on the Exchange to those of 
other exchanges for the same market participants. To the extent that 
there is additional competitive burden on non-Member market 
participants, the Exchange believes that this is appropriate because 
charging non-Members higher transaction fees is a common practice 
amongst exchanges, and because Members are subject to other fees and 
dues associated with their membership to the Exchange that do not apply 
to non-Members. 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. The 
Exchange believes that the proposal reflects this competitive 
environment.

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,\15\ and Rule 19b-4(f)(2) \16\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \16\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2015-70 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange

[[Page 79989]]

Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-MIAX-2015-70. 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 the 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 available publicly. All 
submissions should refer to File Number SR-MIAX-2015-70 and should be 
submitted on or before January 13, 2016.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-32188 Filed 12-22-15; 8:45 am]
BILLING CODE 8011-01-P
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