Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 80849-80851 [2015-32526]

Download as PDF Federal Register / Vol. 80, No. 248 / Monday, December 28, 2015 / Notices table and the effectiveness of the Committee.49 In response, NASDAQ states its belief that providing additional price improvement opportunities for retail investors is a ‘‘critical component of its best execution obligations.’’ 50 In its supplemental response letter, NASDAQ states that, in all routing of orders, when one routing destination is chosen over another, there is always a possibility that an execution will be missed.51 The Commission notes, however, that NASDAQ believes that any chance of an RTFY order missing a better price at the Exchange is ‘‘miniscule.’’ 52 The Commission notes that, according to NASDAQ, some routing destinations agree to a guaranteed minimum price improvement per share for RTFY orders, some focus more on the average price improvement, and others are unsure of what the level of price improvement will be, but provide assurances that they will compete vigorously with their execution quality.53 Consequently, NASDAQ believes that the competition for RTFY orders, and thus the resulting execution quality, will be better than what is experienced today.54 The Commission notes that, with respect to commenters’ concerns regarding the RTFY routing table and the Committee, NASDAQ states that—as with all other routing options, other than Directed Orders—the RTFY routing table will be monitored and approved by the Committee.55 According to NASDAQ, the use of a best execution committee is not novel, and such committees are widely-used at many broker-dealers.56 In addition, the Committee is subject to FINRA oversight, as well as oversight by NASDAQ Inc.’s internal audit group, which reports to the audit committee of the Board of Directors of NASDAQ Inc.57 According to NASDAQ, the Committee reviews the performance of routing destinations on a regular basis 49 See Themis Letter and Shatto Letter, supra note mstockstill on DSK4VPTVN1PROD with NOTICES 4. 50 See NASDAQ Response, supra note 5, at 4. Moreover, NASDAQ reiterates that it will not accept any negotiated payment for order flow. See NASDAQ Supplemental Response, supra note 7, at 1–2. 51 See NASDAQ Supplemental Response, supra note 7, at 2. 52 See id. at 3. 53 See id. at 2. 54 See id. 55 See NASDAQ Response, supra note 5, at 3. NASDAQ notes that many factors are weighed when making best execution determinations, and that price improvement opportunities for retail investors are an ‘‘integral component of such decisions by both the Committee and by retail order firms.’’ See id. 56 See id. 57 See id. at 3–4. VerDate Sep<11>2014 13:31 Dec 24, 2015 Jkt 238001 for all routing and the same will be true for RTFY.58 If the Committee determines that a particular routing destination is underperforming based on the various parameters, such as price improvement, fill rate, and latency, the Committee may either remove that destination altogether or lower its priority within the routing table.59 According to NASDAQ, this process ensures that these destinations will compete aggressively with each other in order to receive RTFY orders.60 Based on the foregoing, the Commission believes that the proposed rule change is consistent with the Act. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,61 that the proposed rule change (SR–NASDAQ– 2015–112) be and hereby is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.62 Brent J. Fields, Secretary. [FR Doc. 2015–32527 Filed 12–24–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76717; File No. SR–MIAX– 2015–73] 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 21, 2015. Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 58 See NASDAQ Supplemental Response, supra note 7, at 2. 59 See id. NASDAQ notes that missed executions often may be due to latency in away destinations systems. See id. at 3. According to NASDAQ, because latency is one of the parameters that the Committee considers in its regular reviews of routing destinations, destinations causing undue latency that may lead to missed executions or inferior execution prices would lose their priority within the routing table or be removed altogether. See id. NASDAQ also notes that, if the Committee determines that a particular routing destination is not providing sufficient price improvement opportunities, then that destination will likely be removed from the RTFY routing table. See NASDAQ Response, supra note 5, at 4. 60 See NASDAQ Supplemental Response, supra note 7, at 2. NASDAQ states that, in the past, the Committee has moved venues down within the routing table due, in part, to unsatisfactory fill rate, unsatisfactory price improvement, and/or unsatisfactory latency profile. See id. 61 15 U.S.C. 78s(b)(2). 62 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 80849 thereunder,2 notice is hereby given that on December 14, 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. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Fee Schedule to modify the transaction fees for Members that participate in the price improvement auction (‘‘PRIME Auction’’ or ‘‘PRIME’’) pursuant to Rule 515A.3 Specifically, the Exchange proposes to: (i) Increase the fee for a PRIME AOC Response 4 from $0.49 per 2 17 CFR 240.19b–4. Exchange Rule 515A. See also Securities Exchange Act Release Nos. 75408 (July 9, 2015) 80 FR 41530 (July 15, 2015)(SR–MIAX–2015–45); 72943 (August 28, 2014), 79 FR 52785 (September 4, 2014) (SR–MIAX–2014–45); MIAX Options Fee Schedule, Section (1)(a)(iv). 4 See Exchange Rule 515A(a)(2)(i). When the Exchange receives a properly designated Agency Order for auction processing, a Request for Responses (‘‘RFR’’) detailing the option, side, size, and initiating price will be sent to all subscribers of the Exchange’s data feeds. Members may submit 3 See E:\FR\FM\28DEN1.SGM Continued 28DEN1 mstockstill on DSK4VPTVN1PROD with NOTICES 80850 Federal Register / Vol. 80, No. 248 / Monday, December 28, 2015 / Notices contract to $0.50 per contract for standard options in Penny Pilot classes; (ii) increase the fee for a PRIME AOC Response from $0.94 per contract to $0.99 per contract for standard options in non-Penny Pilot classes; and (iii) continue to provide for additional incentives of $0.04 per contract for achieving certain Priority Customer Rebate Program volume tiers. The Exchange also proposes technical clarifying amendments to the Fee Schedule, as described below. Currently, the Exchange assesses PRIME AOC Responses $0.49 per contract for standard options in Penny Pilot classes and $0.94 per contract in non-Penny Pilot classes. The Exchange now proposes to modify these fees that apply to PRIME AOC Responses. Specifically, the Exchange proposes to: (i) Increase the fee for a PRIME AOC Response from $0.49 per contract to $0.50 per contract for standard options in Penny Pilot classes; and (ii) increase the fee for a PRIME AOC Response from $0.94 per contract to $0.99 per contract for standard options in non-Penny Pilot classes. The Exchange will continue to assess the standard transaction fees to a PRIME AOC Response if they execute against unrelated orders. The Exchange currently offers Members that submit PRIME AOC Responses the opportunity to reduce transaction fees by $0.04 per contract in standard options if the Member or its affiliates of at least 75% common ownership between the firms as reflected on each firm’s Form BD, Schedule A, qualifies in a given month for Priority Customer Rebate Program volume tiers 3 or 4 in the Fee Schedule. Currently, 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 are assessed a PRIME AOC Response fee of $0.45 per contract for standard options in Penny Pilot classes. In addition, 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 are assessed a PRIME AOC Response fee of $0.90 per contract for standard options in non-Penny Pilot classes. In order to continue to offer Members or their 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 (‘‘qualifying Members’’) the opportunity to reduce transaction fees by $0.04 per contract in standard options, the Exchange is proposing to modify the reduced fees to $0.46 per contract for standard options in Penny Pilot classes, and to $.0.95 per contract for standard options in non-Penny Pilot classes for such qualifying Members. The Exchange believes that these incentives will continue to encourage Members to transact a greater number of contracts on the Exchange. The Exchange notes that these incentives will operate identically to the Priority Customer Rebate Program incentives that apply to 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 in other types of transaction fees.5 The Exchange is also proposing technical clarifying amendments to the Fee Schedule. Specifically, the headings in the table in Section 1) a) iv) of the Fee Schedule will be amended from: (i) ‘‘PRIME Order’’ to ‘‘PRIME Order Fee,’’ (ii) ‘‘Responder to PRIME Auction’’ to ‘‘Responder to PRIME Auction Fee,’’ and (iii) ‘‘PRIME Break-up’’ to ‘‘PRIME Break-up Credit.’’ These changes are intended to clarify and more specifically label the various columns in the table for investors using it. 2. Statutory Basis The Exchange believes that its proposal to amend its Fee Schedule is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(4) of the Act 7 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 for certain participants that submit PRIME AOC Responses is reasonable because the Exchange’s fees will remain competitive with fees at other options exchanges.8 The Exchange’s proposal to increase the transaction fees for certain participants in the PRIME Auction is equitable and not unfairly discriminatory because the increase applies equally to all such participants. The Exchange believes that the transaction fees for PRIME AOC 5 See RFR responses consisting of an Auction or Cancel (‘‘AOC’’) order or an AOC eQuote. Such responses cannot cross the disseminated MIAX Best Bid or Offer (‘‘MBBO’’) on the opposite side of the market from the response. VerDate Sep<11>2014 13:31 Dec 24, 2015 Jkt 238001 MIAX Options Fee Schedule. U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4). 8 See e.g., NYSE Amex Options Fee Schedule; International Securities Exchange LLC Schedule of Fees; BOX Options Exchange Fee Schedule. 6 15 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 Responses will not deter market participants from providing price improvement. The Exchange’s proposal to offer qualifying PRIME Auction participants the opportunity to reduce transaction fees by $0.04 per contract in standard options, provided certain criteria are met, 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 qualifying PRIME Auction participants the opportunity to reduce transaction fees by $0.04 per contract in standard options, provided certain criteria are met, is equitable and not unfairly discriminatory because the Exchange will offer all market participants a means to reduce transaction fees by qualifying for volume tiers in the Priority Customer Rebate Program. The Exchange believes that continuing to offer all such market participants the opportunity to lower transaction fees by transacting Priority Customer order flow in turn benefits all market participants. To the extent that there are higher transaction fees assessed on market participants without Priority Customer order flow, the Exchange believes that this is appropriate because the proposal creates incentives for 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 on MIAX. 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 believes that the proposal to allow the aggregation of trading activity of separate Members or its 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 separate Members or its affiliates for purposes of the fee reduction only in very narrow circumstances, namely, where the firm is an affiliate, as defined herein. The Exchange believes that all such market participants should have the opportunity to lower transaction fees by transacting additional Priority Customer order flow, which in turn benefits all market participants. The Exchange believes that the technical clarifying amendments to the E:\FR\FM\28DEN1.SGM 28DEN1 Federal Register / Vol. 80, No. 248 / Monday, December 28, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES Fee Schedule ensure that the Fee Schedule is transparent regarding the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities, and are thus consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed change will enhance the competiveness of the Exchange relative to other exchanges that offer their own electronic price improvement mechanism. The Exchange believes that the proposed fees do not impact intramarket competition notwithstanding that the proposed per contract fees assessed to participants in the PRIME Auction that respond to an Agency Order (for purposes of this discussion, ‘‘responders’’) are greater than the per contract fees assessed to participants that begin the auction process by submitting an Agency Order (for purposes of this discussion, ‘‘initiators’’). Initiators guarantee execution of the entire Agency Order in full, either at a single price or at multiple prices using the ‘‘auto-match’’ option.9 Responders may elect not to respond at all, or may elect to respond only at a single price, and are not required to guarantee the execution of the entire order at any price. Because of this guarantee, initiators are assuming greater risk and are providing more liquidity in the Exchange’s markets. The Exchange believes therefore that it is reasonable, equitable and not unfairly discriminatory, and consequently not a burden on competition, to charge responders and initiators differently, as proposed. The Exchange believes that these market participants understand that the price-improving benefits, based on their experience with PRIME, and on electronic price improvement mechanisms on other markets, justify the transaction fees associated with the PRIME Auction, based upon the disparity in risk assumed in the PRIME Auction process. 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 establishes a fee structure in a manner that encourages market participants to submit their order flow, to provide liquidity, and to attract additional transaction volume to the Exchange. 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,10 and Rule 19b–4(f)(2) 11 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–2015–73 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR–MIAX–2015–73. This file number should be included on the subject line if email is used. To help the Commission process and review your 9 See Exchange Rule 515A(a)(2)(i)(A). VerDate Sep<11>2014 13:31 Dec 24, 2015 Jkt 238001 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 Section, 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 will also 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– 2015–73 and should be submitted on or before January 19, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Brent J. Fields, Secretary. [FR Doc. 2015–32526 Filed 12–24–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76712; File No. SR–EDGA– 2015–47] Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 11.6(n)(1), Routing/Posting Instructions, To Amend the Aggressive Instruction December 21, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 16, 2015, EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II 12 17 10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 240.19b–4(f)(2). PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 80851 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\28DEN1.SGM 28DEN1

Agencies

[Federal Register Volume 80, Number 248 (Monday, December 28, 2015)]
[Notices]
[Pages 80849-80851]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32526]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76717; File No. SR-MIAX-2015-73]


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 21, 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 14, 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 the Fee Schedule to modify the 
transaction fees for Members that participate in the price improvement 
auction (``PRIME Auction'' or ``PRIME'') pursuant to Rule 515A.\3\ 
Specifically, the Exchange proposes to: (i) Increase the fee for a 
PRIME AOC Response \4\ from $0.49 per

[[Page 80850]]

contract to $0.50 per contract for standard options in Penny Pilot 
classes; (ii) increase the fee for a PRIME AOC Response from $0.94 per 
contract to $0.99 per contract for standard options in non-Penny Pilot 
classes; and (iii) continue to provide for additional incentives of 
$0.04 per contract for achieving certain Priority Customer Rebate 
Program volume tiers. The Exchange also proposes technical clarifying 
amendments to the Fee Schedule, as described below.
---------------------------------------------------------------------------

    \3\ See Exchange Rule 515A. See also Securities Exchange Act 
Release Nos. 75408 (July 9, 2015) 80 FR 41530 (July 15, 2015)(SR-
MIAX-2015-45); 72943 (August 28, 2014), 79 FR 52785 (September 4, 
2014) (SR-MIAX-2014-45); MIAX Options Fee Schedule, Section 
(1)(a)(iv).
    \4\ See Exchange Rule 515A(a)(2)(i). When the Exchange receives 
a properly designated Agency Order for auction processing, a Request 
for Responses (``RFR'') detailing the option, side, size, and 
initiating price will be sent to all subscribers of the Exchange's 
data feeds. Members may submit RFR responses consisting of an 
Auction or Cancel (``AOC'') order or an AOC eQuote. Such responses 
cannot cross the disseminated MIAX Best Bid or Offer (``MBBO'') on 
the opposite side of the market from the response.
---------------------------------------------------------------------------

    Currently, the Exchange assesses PRIME AOC Responses $0.49 per 
contract for standard options in Penny Pilot classes and $0.94 per 
contract in non-Penny Pilot classes. The Exchange now proposes to 
modify these fees that apply to PRIME AOC Responses. Specifically, the 
Exchange proposes to: (i) Increase the fee for a PRIME AOC Response 
from $0.49 per contract to $0.50 per contract for standard options in 
Penny Pilot classes; and (ii) increase the fee for a PRIME AOC Response 
from $0.94 per contract to $0.99 per contract for standard options in 
non-Penny Pilot classes. The Exchange will continue to assess the 
standard transaction fees to a PRIME AOC Response if they execute 
against unrelated orders.
    The Exchange currently offers Members that submit PRIME AOC 
Responses the opportunity to reduce transaction fees by $0.04 per 
contract in standard options if the Member or its affiliates of at 
least 75% common ownership between the firms as reflected on each 
firm's Form BD, Schedule A, qualifies in a given month for Priority 
Customer Rebate Program volume tiers 3 or 4 in the Fee Schedule.
    Currently, 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 are assessed a PRIME AOC Response fee of $0.45 per 
contract for standard options in Penny Pilot classes. In addition, 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 are assessed a 
PRIME AOC Response fee of $0.90 per contract for standard options in 
non-Penny Pilot classes.
    In order to continue to offer Members or their 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 (``qualifying Members'') the opportunity to 
reduce transaction fees by $0.04 per contract in standard options, the 
Exchange is proposing to modify the reduced fees to $0.46 per contract 
for standard options in Penny Pilot classes, and to $.0.95 per contract 
for standard options in non-Penny Pilot classes for such qualifying 
Members.
    The Exchange believes that these incentives will continue to 
encourage Members to transact a greater number of contracts on the 
Exchange. The Exchange notes that these incentives will operate 
identically to the Priority Customer Rebate Program incentives that 
apply to 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 in 
other types of transaction fees.\5\
---------------------------------------------------------------------------

    \5\ See MIAX Options Fee Schedule.
---------------------------------------------------------------------------

    The Exchange is also proposing technical clarifying amendments to 
the Fee Schedule. Specifically, the headings in the table in Section 1) 
a) iv) of the Fee Schedule will be amended from: (i) ``PRIME Order'' to 
``PRIME Order Fee,'' (ii) ``Responder to PRIME Auction'' to ``Responder 
to PRIME Auction Fee,'' and (iii) ``PRIME Break-up'' to ``PRIME Break-
up Credit.'' These changes are intended to clarify and more 
specifically label the various columns in the table for investors using 
it.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \6\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \7\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange's proposal to increase the transaction fees for 
certain participants that submit PRIME AOC Responses is reasonable 
because the Exchange's fees will remain competitive with fees at other 
options exchanges.\8\ The Exchange's proposal to increase the 
transaction fees for certain participants in the PRIME Auction is 
equitable and not unfairly discriminatory because the increase applies 
equally to all such participants. The Exchange believes that the 
transaction fees for PRIME AOC Responses will not deter market 
participants from providing price improvement.
---------------------------------------------------------------------------

    \8\ See e.g., NYSE Amex Options Fee Schedule; International 
Securities Exchange LLC Schedule of Fees; BOX Options Exchange Fee 
Schedule.
---------------------------------------------------------------------------

    The Exchange's proposal to offer qualifying PRIME Auction 
participants the opportunity to reduce transaction fees by $0.04 per 
contract in standard options, provided certain criteria are met, 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 qualifying PRIME Auction participants the 
opportunity to reduce transaction fees by $0.04 per contract in 
standard options, provided certain criteria are met, is equitable and 
not unfairly discriminatory because the Exchange will offer all market 
participants a means to reduce transaction fees by qualifying for 
volume tiers in the Priority Customer Rebate Program. The Exchange 
believes that continuing to offer all such market participants the 
opportunity to lower transaction fees by transacting Priority Customer 
order flow in turn benefits all market participants. To the extent that 
there are higher transaction fees assessed on market participants 
without Priority Customer order flow, the Exchange believes that this 
is appropriate because the proposal creates incentives for 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 on MIAX. 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 believes that the proposal to allow the aggregation of 
trading activity of separate Members or its 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 separate Members or its affiliates for purposes of the fee reduction 
only in very narrow circumstances, namely, where the firm is an 
affiliate, as defined herein. The Exchange believes that all such 
market participants should have the opportunity to lower transaction 
fees by transacting additional Priority Customer order flow, which in 
turn benefits all market participants.
    The Exchange believes that the technical clarifying amendments to 
the

[[Page 80851]]

Fee Schedule ensure that the Fee Schedule is transparent regarding the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and issuers and other persons using its facilities, and are 
thus consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
believes that the proposed change will enhance the competiveness of the 
Exchange relative to other exchanges that offer their own electronic 
price improvement mechanism.
    The Exchange believes that the proposed fees do not impact intra-
market competition notwithstanding that the proposed per contract fees 
assessed to participants in the PRIME Auction that respond to an Agency 
Order (for purposes of this discussion, ``responders'') are greater 
than the per contract fees assessed to participants that begin the 
auction process by submitting an Agency Order (for purposes of this 
discussion, ``initiators''). Initiators guarantee execution of the 
entire Agency Order in full, either at a single price or at multiple 
prices using the ``auto-match'' option.\9\ Responders may elect not to 
respond at all, or may elect to respond only at a single price, and are 
not required to guarantee the execution of the entire order at any 
price. Because of this guarantee, initiators are assuming greater risk 
and are providing more liquidity in the Exchange's markets. The 
Exchange believes therefore that it is reasonable, equitable and not 
unfairly discriminatory, and consequently not a burden on competition, 
to charge responders and initiators differently, as proposed. The 
Exchange believes that these market participants understand that the 
price-improving benefits, based on their experience with PRIME, and on 
electronic price improvement mechanisms on other markets, justify the 
transaction fees associated with the PRIME Auction, based upon the 
disparity in risk assumed in the PRIME Auction process.
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    \9\ See Exchange Rule 515A(a)(2)(i)(A).
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    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 establishes a fee structure in 
a manner that encourages market participants to submit their order 
flow, to provide liquidity, and to attract additional transaction 
volume to the Exchange.

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,\10\ and Rule 19b-4(f)(2) \11\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-MIAX-2015-73 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549.

All submissions should refer to File Number SR-MIAX-2015-73. 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 Section, 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 will also 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-2015-73 and should be 
submitted on or before January 19, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-32526 Filed 12-24-15; 8:45 am]
 BILLING CODE 8011-01-P
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