Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule To Clarify Its Fees Relating to the MIAX Express Network Interconnect (“MENI”), 11670-11673 [2017-03575]

Download as PDF 11670 Federal Register / Vol. 82, No. 36 / Friday, February 24, 2017 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES Order is contra to other than the Initiating Order, the PIXL Order will continue to be assessed $0.00 per contract, unless the order is a Customer, in which case the Customer will receive an increased rebate of $0.40 per contract does not impose an undue burden on intra-market competition because the Exchange will uniformly pay this rebate. The Exchange’s proposal to amend the SPY PIXL pricing so that all other Non-Customer contra parties to the PIXL Order, other than the Initiating Order, will be assessed an increased Fee for Removing Liquidity of $0.50 per contract or will receive the Rebate for Adding Liquidity does not impose an undue burden on intra-market competition because the Exchange will uniformly assess the increased Fee for Removing Liquidity to all applicable members and member organizations. The Exchange’s proposal to not offer a rebate when the PIXL Order is contra to a Specialist or Market Maker quote, which was established at the initiation of a PIXL auction, the Customer PIXL Order does not impose an undue burden on intra-market competition. The Exchange will uniformly not offer a rebate to any member or member organization when the PIXL Order is contra to a Specialist or Market Maker quote, which was established at the initiation of a PIXL auction. Proposed Amendments to Section IV, Part A: PIXL Pricing The Exchange’s proposal that if the member or member organization qualifies for the Tier 3, 4 or 5 Customer Rebate in Section B the member or member organization will be assessed $0.05 per contract, instead of the $0.07 per contract Initiating Order fee does not impose an undue burden on intramarket competition because the Exchange will assess the fee in a uniform manner to all applicable members and member organizations. The Exchange’s proposal to no longer offer the ability to not be assessed an Initiating Order Fee for Professional, Firm, Broker-Dealer, Specialist and Market Maker orders that are contra to a Customer PIXL Order if the Customer PIXL Order is greater than 399 contracts and instead replace this offer with a rebate to attract more liquidity for PIXL SPY Complex Orders similar to proposed SPY PIXL pricing does not impose an undue burden on intramarket competition. All members and member organizations are eligible for the proposed rebate, provide they met the requisite qualifications. Members and member organizations would be uniformly paid the rebate, provided they qualify. No member or member VerDate Sep<11>2014 17:20 Feb 23, 2017 Jkt 241001 organization will be eligible to eliminate the Initiating Order Fee for Professional, Firm, Broker-Dealer, Specialist and Market Maker orders that are contra to a Customer PIXL Order if the Customer PIXL Order is greater than 399 contracts. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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–Phlx– 2017–15 and should be submitted on or before March 17, 2017. The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.29 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.30 Eduardo A. Aleman, Assistant Secretary. IV. Solicitation of Comments [FR Doc. 2017–03576 Filed 2–23–17; 8:45 am] 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: BILLING CODE 8011–01–P Electronic Comments Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule To Clarify Its Fees Relating to the MIAX Express Network Interconnect (‘‘MENI’’) • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– Phlx–2017–15 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–Phlx–2017–15. 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 (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80062; File No. SR–MIAX– 2017–05] February 17, 2017. 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 February 13, 2017, Miami International Securities Exchange LLC (‘‘MIAX Options’’ 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 30 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 29 15 PO 00000 U.S.C. 78s(b)(3)(A)(ii). Frm 00148 Fmt 4703 Sfmt 4703 E:\FR\FM\24FEN1.SGM 24FEN1 Federal Register / Vol. 82, No. 36 / Friday, February 24, 2017 / Notices notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the 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 http://www.miaxoptions.com/rulefilings, 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 asabaliauskas on DSK3SPTVN1PROD with NOTICES 1. Purpose The Exchange proposes to amend its Fee Schedule to provide a definition of the MIAX Express Network Interconnect (‘‘MENI’’) and that any Member 3 or non-Member using the MENI to access the Exchange’s System 4 and the automated trading system of MIAX PEARL, LLC (‘‘MIAX PEARL’’), the Exchange’s affiliate (the ‘‘MIAX PEARL System’’) will only be assessed one network connectivity fee per such connection, regardless of the trading platforms, market data systems, test systems, and disaster recovery facilities of the Exchange and MIAX PEARL accessed via such connection, as more fully described below. 5 3 The term ‘‘Member’’ means an individual or organization approved to exercise the trading rights associated with a Trading Permit. Members are deemed ‘‘members’’ under the Exchange Act. See Exchange Rule 100. 4 The term ‘‘System’’ means the automated trading system used by the Exchange for the trading of securities. See Exchange Rule 100. 5 The Exchange notes that MIAX PEARL has filed with the Commission a proposed rule change to adopt similar clarifying rules in connection with the establishment of its proposed fee schedule. See SR–PEARL–2017–10 filed on February 13, 2017 at www.miaxoptions.com. VerDate Sep<11>2014 17:20 Feb 23, 2017 Jkt 241001 The Exchange provides to Members and non-Members a network infrastructure pursuant to which such Members and non-Members establish connectivity to the trading platforms, market data systems, test systems, and disaster recovery facilities of the Exchange. The Exchange refers to this network infrastructure as the MIAX Express Network Interconnect, or the MENI. The MENI consists of the low latency and ultra-low latency (‘‘ULL’’) connectivity options set forth in the Exchange’s Fee Schedule. The MENI also provides members and nonmembers of MIAX PEARL network connectivity to the trading platforms, market data systems, test systems, and disaster recovery facilities of MIAX PEARL. Further, for Members and nonMembers of the Exchange that wish to establish connectivity to both the Exchange and MIAX PEARL, the MENI can be configured to provide such Members and non-Members of the Exchange network connectivity to the trading platforms, market data systems, test systems, and disaster recovery facilities of both the Exchange and MIAX PEARL, via a single, shared connection. Accordingly, the Exchange is proposing to clarify that, when a Member or non-Member of the Exchange establishes network connectivity to the trading platforms, market data systems, test systems, and disaster recovery facilities of both the Exchange and MIAX PEARL, via a single, shared connection, for purposes of: (i) Section 4) of the Exchange’s Fee Schedule, the Member or non-Member will only be assessed one Network Connectivity Testing and Certification Fee per connection tested, regardless of the trading platforms, market data systems, test systems, and disaster recovery facilities accessed via such connection, and (ii) Section 5) of the Exchange’s Fee Schedule, the Member or non-Member will only be assessed one Network Connectivity Fee per connection, regardless of the trading platforms, market data systems, test systems, and disaster recovery facilities accessed via such connection. In particular, regarding Network Connectivity Testing and Certification, new users of the Exchange’s System (and existing users of the System that seek to change connectivity options) require testing and certification prior to actual use in the production environment, and are assessed fees for such testing and certification as are specified in the Exchange’s Fee Schedule. Accordingly, the Exchange now proposes to amend Section 4)c) of the Fee Schedule to provide that PO 00000 Frm 00149 Fmt 4703 Sfmt 4703 11671 Members utilizing the MENI to connect to the trading platforms, market data systems, test systems, and disaster recovery facilities of the Exchange and MIAX PEARL via a single, shared connection will only be assessed one Network Connectivity Testing and Certification Fee per connection tested, regardless of the trading platforms, market data systems, test systems, and disaster recovery facilities accessed via such connection. Further, the Exchange similarly proposes to amend Section 4)d) of the Fee Schedule to provide that non-Members utilizing the MENI to connect to the trading platforms, market data systems, test systems, and disaster recovery facilities of the Exchange and MIAX PEARL via a single, shared connection will only be assessed one Network Connectivity Testing and Certification Fee per connection tested, regardless of the trading platforms, market data systems, test systems, and disaster recovery facilities accessed via such connection. Regarding System Network Connectivity Fees, Members and nonMembers of the Exchange are assessed fees for connectivity to the Exchange as is set forth in the Fee Schedule, depending on the connection size (e.g., 1 Gigabit, 10 Gigabit, 10 Gigabit ULL) and facility site (e.g., primary/secondary facility, disaster recovery facility). Accordingly, the Exchange now proposes to amend Section 5)a) of the Fee Schedule to provide that Members utilizing the MENI to connect to the trading platforms, market data systems, test systems, and disaster recovery facilities of the Exchange and MIAX PEARL via a single, shared connection will only be assessed one Monthly Member Network Connectivity Fee per connection, regardless of the trading platforms, market data systems, test systems, and disaster recovery facilities accessed via such connection. Further, the Exchange similarly proposes to amend Section 5)b) of the Fee Schedule to provide that non-Members utilizing the MENI to connect to the trading platforms, market data systems, test systems, and disaster recovery facilities of the Exchange and MIAX PEARL via a single, shared connection will only be assessed one Monthly Non-Member Network Connectivity Fee per connection, regardless of the trading platforms, market data systems, test systems, and disaster recovery facilities accessed via such connection. The proposed rule change is intended to provide greater transparency to Members and non-Members of the Exchange regarding how network connectivity testing and certification fees and network connectivity fees will E:\FR\FM\24FEN1.SGM 24FEN1 11672 Federal Register / Vol. 82, No. 36 / Friday, February 24, 2017 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES be assessed by the Exchange when Members and non-Members establish network connectivity to the Exchange and MIAX PEARL via a single, shared network connection by explicitly stating that each such connection will only be charged once per connection. The Exchange believes that clarifying regarding how network connectivity testing and certification fees and network connectivity fees will be assessed by the Exchange will benefit all market participants by assisting them in the decision-making process to connect to the Exchange and further their readiness to use the MIAX PEARL System. 2. Statutory Basis The Exchange believes that its proposed rule change is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Sections 6(b)(4) of the Act,7 in that it is an equitable allocation of reasonable fees and other charges among Exchange Members and other persons using its facilities, and Section 6(b)(5) of the Act,8 in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. The proposed rule change furthers the objectives of Section 6(b)(4) of the Act 9 because it will apply equally to all Exchange participants who test and/or use a single, shared connection to access the Exchange and MIAX PEARL. The Exchange believes that assessing all Exchange participants only one connectivity fee for each single, shared connection to both the Exchange and MIAX PEARL is reasonable, equitable and not unfairly discriminatory because it makes the fees consistent between the Exchange and MIAX PEARL for use of the MENI to access both exchanges. The proposed rule change is consistent with Section 6(b)(5) of the Act,10 in that it is designed to protect investors and the public interest and to promote just and equitable principles of trade by providing greater transparency to Members and non-Members of the Exchange regarding how network connectivity testing and certification 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 8 15 U.S.C. 78f(b)(5). 9 15 U.S.C. 78f(b)(4). 10 15 U.S.C. 78f(b)(5). 7 15 VerDate Sep<11>2014 17:20 Feb 23, 2017 fees and network connectivity fees will be assessed by the Exchange when Members and non-Members establish network connectivity to the Exchange and MIAX PEARL via a single, shared network connection by explicitly stating that each such connection will only be charged once per connection. 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 changes would increase both intermarket and intramarket competition by defining the assessments of such network connectivity testing and certification fees and network connectivity fees for all users of the Exchange, thereby creating greater clarity around the Exchange’s assessment of such fees for participants that wish to begin using MIAX PEARL’s System through its existing MIAX Options’ network connection and to continue using the Exchange’s facilities through the same shared connection, thereby enabling a potential user of both systems to assess the competitive nature of the fees. This should benefit all market participants and improve competition on the Exchange. The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and to attract order flow to the Exchange. The Exchange believes that the proposal will enhance competition, because market participants will have more clarity surrounding how they will be assessed the network connectivity testing and certification fees and network connectivity fees if they desire to connect to both the MIAX Options and MIAX PEARL through the MENI and will also understand that they will not be double charged for these network fees for using the same, shared connections to both exchanges. B. 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. Jkt 241001 PO 00000 Frm 00150 Fmt 4703 Sfmt 4703 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,11 and Rule 19b–4(f)(2) 12 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File No. SR– MIAX–2017–05 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 No. SR–MIAX–2017–05. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://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 11 15 12 17 E:\FR\FM\24FEN1.SGM U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 24FEN1 Federal Register / Vol. 82, No. 36 / Friday, February 24, 2017 / Notices Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–MIAX– 2017–05, and should be submitted on or before March 17, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–03575 Filed 2–23–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80060; File No. SR–CBOE– 2016–091] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a Proposed Rule Change Related to a Change to the Trading Symbol for P.M.-Settled Options on the Standard & Poor’s 500 Index February 17, 2017. asabaliauskas on DSK3SPTVN1PROD with NOTICES I. Introduction On December 16, 2016, Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change amending CBOE’s rules related to P.M.settled options on the Standard & Poor’s 500 Index (‘‘S&P 500 Index’’). The proposed rule change was published for comment in the Federal Register on January 5, 2017.3 The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change. II. Description of the Proposed Rule Change CBOE proposes to move P.M.-settled S&P 500 Index options expiring on the 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 79712 (December 29, 2016), 82 FR 1383 (January 5, 2017) (‘‘Notice’’). 1 15 VerDate Sep<11>2014 17:20 Feb 23, 2017 Jkt 241001 third-Friday of the month (‘‘thirdFriday’’), currently listed in a separate class and trading under the symbol ‘‘SPXPM’’, to the Hybrid 3.0 S&P 500 Index options class. In connection with the move, the Exchange proposes changing the trading symbol for these options from ‘‘SPXPM’’ to ‘‘SPXW.’’ The Exchange currently lists A.M.settled 4 and P.M.-settled 5 S&P 500 Index options that have standard thirdFriday expirations. Third-Friday A.M.settled S&P 500 Index options trade under the symbol ‘‘SPX’’ on the Exchange’s Hybrid 3.0 platform.6 ThirdFriday P.M.-settled S&P 500 Index options trade on the Hybrid Trading System in a separate options class under the symbol ‘‘SPXPM’’.7 In addition, the Hybrid 3.0 options class also includes nonstandard P.M.settled S&P 500 Index options trading under the symbol ‘‘SPXW,’’ which may expire on Mondays, Wednesdays, Fridays (other than the third-Friday-ofthe-month) (i.e., nonstandard weekly expirations pursuant to Rule 24.9(e)), and the last trading day of the month.8 Although SPXW options are included in the Hybrid 3.0 class, they trade on the Hybrid Trading System.9 In its filing, the Exchange noted that a gap exists currently in Friday expirations for SPXW as a user of SPXW options cannot roll an existing SPXW position that expires on a first or second Friday of a month into a SPXW position that expires on a third-Friday, because the latter is part of the separate SPXPM class.10 Moving SPXPM into the SPX class under symbol SPXW will remove this gap and allow market participants to maintain exposure to SPXW Friday expirations throughout the month if they so choose. The Exchange also noted that offering access to all P.M.settled S&P 500 Index options in a single class with expirations every Friday of the month will provide market participants with greater flexibility in submitting complex orders using S&P 500 index options.11 In its filing, the Exchange noted its belief that moving SPXPM into the SPX options class under the symbol SPXW should not adversely impact market 4 See Rule 24.9(a)(4)(i) (A.M.-settled index options). 5 See Rule 24.9.14 (authorizing the Exchange to list P.M.-settled S&P 500 options for a specified pilot period). 6 See Rule 8.3(c)(iii). 7 See Rule 8.3(c)(i) (identifying P.M.-settled thirdFriday S&P 500 options as a Tier AA Hybrid Options Class). 8 See Rule 24.9(e). 9 See Rule 8.14.01. 10 See Notice, supra note 3, at 1384. 11 See id. PO 00000 Frm 00151 Fmt 4703 Sfmt 4703 11673 participants.12 Specifically, the Exchange noted that it expects a smooth transition of the SPXPM series to the SPXW symbol because SPXPM and SPXW options both trade on the Hybrid Trading System 13 and the Exchange’s rules and systems treat SPXPM and SPXW the same in many respects.14 Pilot Reports SPXPM options currently are approved for listing and trading on a pilot basis.15 The Exchange represents that the pilot will continue under the same terms that established the pilot.16 III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act 17 and the rules and regulations thereunder applicable to a national securities exchange.18 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 19 which requires, among other things, that the rules of a national securities exchange be designed to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange represents that trading P.M.-settled third-Friday expirations as part of the S&P 500 Index options class under the SPXW symbol, rather than as a separate class under the SPXPM symbol, will help remove impediments to and perfect the mechanism of a free and open market by providing market participants with access to a single class 12 See id. Rules 8.3(c)(i) (identifying P.M.-settled third-Friday S&P Index options as a Tier AA Hybrid Options Class) and 8.14.01 (allowing the Exchange to authorize a group of series of a class for trading on the Hybrid Trading System). 14 See Notice, supra note 3, at 1384–85 (discussing areas where trading parameters for SPXPM and SPXW are the same, such as the minimum increment for bids and offers, and where they differ, such as the appointment costs). 15 See Rule 24.9.14 and Securities Exchange Act Release No. 68457 (December 18, 2012), 77 FR 76135 (December 26, 2012) (SR–CBOE–2012–120). 16 See Notice, supra note 3, at 1385. As part of the pilot, the Exchange submits quarterly reports and annual reports that analyze the market impact and trading patterns of third-Friday P.M.-settled S&P 500 options. The Exchange will modify the reports to provide the same data and analysis for third-Friday P.M.-settled S&P 500 Index options trading under symbol SPXW that it currently submits for third-Friday P.M.-settled S&P 500 Index options trading under symbol SPXPM. See id. 17 15 U.S.C. 78f. 18 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 19 15 U.S.C. 78f(b)(5). 13 See E:\FR\FM\24FEN1.SGM 24FEN1

Agencies

[Federal Register Volume 82, Number 36 (Friday, February 24, 2017)]
[Notices]
[Pages 11670-11673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-03575]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80062; File No. SR-MIAX-2017-05]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Its Fee Schedule To Clarify Its Fees 
Relating to the MIAX Express Network Interconnect (``MENI'')

February 17, 2017.
    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 February 13, 2017, Miami International 
Securities Exchange LLC (``MIAX Options'' 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

[[Page 11671]]

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 the 
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 http://www.miaxoptions.com/rule-filings, 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 provide a 
definition of the MIAX Express Network Interconnect (``MENI'') and that 
any Member \3\ or non-Member using the MENI to access the Exchange's 
System \4\ and the automated trading system of MIAX PEARL, LLC (``MIAX 
PEARL''), the Exchange's affiliate (the ``MIAX PEARL System'') will 
only be assessed one network connectivity fee per such connection, 
regardless of the trading platforms, market data systems, test systems, 
and disaster recovery facilities of the Exchange and MIAX PEARL 
accessed via such connection, as more fully described below. \5\
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    \3\ The term ``Member'' means an individual or organization 
approved to exercise the trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
    \4\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
    \5\ The Exchange notes that MIAX PEARL has filed with the 
Commission a proposed rule change to adopt similar clarifying rules 
in connection with the establishment of its proposed fee schedule. 
See SR-PEARL-2017-10 filed on February 13, 2017 at 
www.miaxoptions.com.
---------------------------------------------------------------------------

    The Exchange provides to Members and non-Members a network 
infrastructure pursuant to which such Members and non-Members establish 
connectivity to the trading platforms, market data systems, test 
systems, and disaster recovery facilities of the Exchange. The Exchange 
refers to this network infrastructure as the MIAX Express Network 
Interconnect, or the MENI. The MENI consists of the low latency and 
ultra-low latency (``ULL'') connectivity options set forth in the 
Exchange's Fee Schedule. The MENI also provides members and non-members 
of MIAX PEARL network connectivity to the trading platforms, market 
data systems, test systems, and disaster recovery facilities of MIAX 
PEARL. Further, for Members and non-Members of the Exchange that wish 
to establish connectivity to both the Exchange and MIAX PEARL, the MENI 
can be configured to provide such Members and non-Members of the 
Exchange network connectivity to the trading platforms, market data 
systems, test systems, and disaster recovery facilities of both the 
Exchange and MIAX PEARL, via a single, shared connection.
    Accordingly, the Exchange is proposing to clarify that, when a 
Member or non-Member of the Exchange establishes network connectivity 
to the trading platforms, market data systems, test systems, and 
disaster recovery facilities of both the Exchange and MIAX PEARL, via a 
single, shared connection, for purposes of: (i) Section 4) of the 
Exchange's Fee Schedule, the Member or non-Member will only be assessed 
one Network Connectivity Testing and Certification Fee per connection 
tested, regardless of the trading platforms, market data systems, test 
systems, and disaster recovery facilities accessed via such connection, 
and (ii) Section 5) of the Exchange's Fee Schedule, the Member or non-
Member will only be assessed one Network Connectivity Fee per 
connection, regardless of the trading platforms, market data systems, 
test systems, and disaster recovery facilities accessed via such 
connection.
    In particular, regarding Network Connectivity Testing and 
Certification, new users of the Exchange's System (and existing users 
of the System that seek to change connectivity options) require testing 
and certification prior to actual use in the production environment, 
and are assessed fees for such testing and certification as are 
specified in the Exchange's Fee Schedule. Accordingly, the Exchange now 
proposes to amend Section 4)c) of the Fee Schedule to provide that 
Members utilizing the MENI to connect to the trading platforms, market 
data systems, test systems, and disaster recovery facilities of the 
Exchange and MIAX PEARL via a single, shared connection will only be 
assessed one Network Connectivity Testing and Certification Fee per 
connection tested, regardless of the trading platforms, market data 
systems, test systems, and disaster recovery facilities accessed via 
such connection. Further, the Exchange similarly proposes to amend 
Section 4)d) of the Fee Schedule to provide that non-Members utilizing 
the MENI to connect to the trading platforms, market data systems, test 
systems, and disaster recovery facilities of the Exchange and MIAX 
PEARL via a single, shared connection will only be assessed one Network 
Connectivity Testing and Certification Fee per connection tested, 
regardless of the trading platforms, market data systems, test systems, 
and disaster recovery facilities accessed via such connection.
    Regarding System Network Connectivity Fees, Members and non-Members 
of the Exchange are assessed fees for connectivity to the Exchange as 
is set forth in the Fee Schedule, depending on the connection size 
(e.g., 1 Gigabit, 10 Gigabit, 10 Gigabit ULL) and facility site (e.g., 
primary/secondary facility, disaster recovery facility). Accordingly, 
the Exchange now proposes to amend Section 5)a) of the Fee Schedule to 
provide that Members utilizing the MENI to connect to the trading 
platforms, market data systems, test systems, and disaster recovery 
facilities of the Exchange and MIAX PEARL via a single, shared 
connection will only be assessed one Monthly Member Network 
Connectivity Fee per connection, regardless of the trading platforms, 
market data systems, test systems, and disaster recovery facilities 
accessed via such connection. Further, the Exchange similarly proposes 
to amend Section 5)b) of the Fee Schedule to provide that non-Members 
utilizing the MENI to connect to the trading platforms, market data 
systems, test systems, and disaster recovery facilities of the Exchange 
and MIAX PEARL via a single, shared connection will only be assessed 
one Monthly Non-Member Network Connectivity Fee per connection, 
regardless of the trading platforms, market data systems, test systems, 
and disaster recovery facilities accessed via such connection.
    The proposed rule change is intended to provide greater 
transparency to Members and non-Members of the Exchange regarding how 
network connectivity testing and certification fees and network 
connectivity fees will

[[Page 11672]]

be assessed by the Exchange when Members and non-Members establish 
network connectivity to the Exchange and MIAX PEARL via a single, 
shared network connection by explicitly stating that each such 
connection will only be charged once per connection. The Exchange 
believes that clarifying regarding how network connectivity testing and 
certification fees and network connectivity fees will be assessed by 
the Exchange will benefit all market participants by assisting them in 
the decision-making process to connect to the Exchange and further 
their readiness to use the MIAX PEARL System.

2. Statutory Basis

    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \6\ in general, and furthers the 
objectives of Sections 6(b)(4) of the Act,\7\ in that it is an 
equitable allocation of reasonable fees and other charges among 
Exchange Members and other persons using its facilities, and Section 
6(b)(5) of the Act,\8\ in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, to remove 
impediments to and perfect the mechanisms of a free and open market and 
a national market system and, in general, to protect investors and the 
public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The proposed rule change furthers the objectives of Section 6(b)(4) 
of the Act \9\ because it will apply equally to all Exchange 
participants who test and/or use a single, shared connection to access 
the Exchange and MIAX PEARL. The Exchange believes that assessing all 
Exchange participants only one connectivity fee for each single, shared 
connection to both the Exchange and MIAX PEARL is reasonable, equitable 
and not unfairly discriminatory because it makes the fees consistent 
between the Exchange and MIAX PEARL for use of the MENI to access both 
exchanges.
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    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The proposed rule change is consistent with Section 6(b)(5) of the 
Act,\10\ in that it is designed to protect investors and the public 
interest and to promote just and equitable principles of trade by 
providing greater transparency to Members and non-Members of the 
Exchange regarding how network connectivity testing and certification 
fees and network connectivity fees will be assessed by the Exchange 
when Members and non-Members establish network connectivity to the 
Exchange and MIAX PEARL via a single, shared network connection by 
explicitly stating that each such connection will only be charged once 
per connection.
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    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
believes that the proposed changes would increase both intermarket and 
intramarket competition by defining the assessments of such network 
connectivity testing and certification fees and network connectivity 
fees for all users of the Exchange, thereby creating greater clarity 
around the Exchange's assessment of such fees for participants that 
wish to begin using MIAX PEARL's System through its existing MIAX 
Options' network connection and to continue using the Exchange's 
facilities through the same shared connection, thereby enabling a 
potential user of both systems to assess the competitive nature of the 
fees. This should benefit all market participants and improve 
competition on the Exchange.
    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues if they 
deem fee levels at a particular venue to be excessive. In such an 
environment, the Exchange must continually adjust its fees to remain 
competitive with other exchanges and to attract order flow to the 
Exchange. The Exchange believes that the proposal will enhance 
competition, because market participants will have more clarity 
surrounding how they will be assessed the network connectivity testing 
and certification fees and network connectivity fees if they desire to 
connect to both the MIAX Options and MIAX PEARL through the MENI and 
will also understand that they will not be double charged for these 
network fees for using the same, shared connections to both exchanges.

B. 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,\11\ and Rule 19b-4(f)(2) \12\ 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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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File No. SR-MIAX-2017-05 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 No. SR-MIAX-2017-05. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://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

[[Page 11673]]

Reference Room, 100 F Street NE., Washington, DC 20549 on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
such filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File No. SR-MIAX-2017-05, and should be submitted on or before March 
17, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-03575 Filed 2-23-17; 8:45 am]
 BILLING CODE 8011-01-P