Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX PEARL Fee Schedule, 27912-27915 [2017-12587]
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Federal Register / Vol. 82, No. 116 / Monday, June 19, 2017 / Notices
options is increased by the proposal,
market participants will increasingly
compete for the opportunity to trade on
the Exchange, including sending more
orders which will have the potential to
be assessed lower fees and higher
rebates. The resulting increased volume
and liquidity will benefit all Exchange
participants by providing more trading
opportunities and tighter spreads.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
MIAX PEARL does not believe that
the proposed rule changes will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed Taker fee decrease is intended
to encourage liquidity and should
enable the Exchange to attract and
compete for order flow with other
exchanges which assess higher Priority
Customer Taker fees for SPY options.
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
rebates and fees to remain competitive
with other exchanges and to attract
order flow. The Exchange believes that
the proposed rule change reflects this
competitive environment because it
modifies the Exchange’s fees in a
manner that encourages market
participants to send order flow to the
Exchange.
asabaliauskas on DSKBBXCHB2PROD with NOTICES
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,17 and Rule
19b–4(f)(2) 18 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
17 15
18 17
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
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17:09 Jun 16, 2017
whether the proposed rule should be
approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–12586 Filed 6–16–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–80915; File No. SR–
PEARL–2017–29]
• 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–
PEARL–2017–30 on the subject line.
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the MIAX
PEARL Fee Schedule
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–PEARL–2017–30. 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–
PEARL–2017–30 and should be
submitted on or July 10, 2017.
June 13, 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 June 7, 2017, MIAX PEARL, LLC
(‘‘MIAX PEARL’’ 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 PEARL Fee Schedule
(the ‘‘Fee Schedule’’).
The Exchange initially filed the
proposal on May 26, 2017 (SR–PEARL–
2017–25). That filing was withdrawn
and replaced with the current filing
(SR–PEARL–2017–29).
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’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
1 15
19 17
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U.S.C. 78s(b)(1).
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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
Add/Remove Tiered Rebates/Fees set
forth in Section 1(a) of the Fee Schedule
to decrease the ‘‘Taker’’ fees in all Tiers
assessable to all orders submitted by a
Member for the account of a Priority
Customer 3 for options in Penny classes
(as defined below).
Origin
Tier
The Exchange currently assesses
tiered transaction rebates and fees to all
market participants which are based
upon the total monthly volume
executed by the Member 4 on MIAX
PEARL in the relevant, respective origin
type (not including Excluded
Contracts) 5 expressed as a percentage of
TCV.6 In addition, the per contract
transaction rebates and fees are applied
retroactively to all eligible volume for
that origin type once the respective
threshold tier (‘‘Tier’’) has been reached
by the Member. The Exchange
aggregates the volume of Members and
their Affiliates.7 Members that place
resting liquidity, i.e., orders resting on
the book of the MIAX PEARL System,8
are paid the specified ‘‘maker’’ rebate
(each a ‘‘Maker’’), and Members that
execute against resting liquidity are
Per contract
rebates/fees
for penny
classes
Volume criteria
Maker
Priority Customer
1
2
3
4
5
assessed the specified ‘‘taker’’ fee (each
a ‘‘Taker’’). For opening transactions
and ABBO uncrossing transactions, per
contract transaction rebates and fees are
waived for all market participants.
Finally, Members are assessed lower
transaction fees and receive lower
rebates for order executions in standard
option classes in the Penny Pilot
Program 9 (‘‘Penny classes’’) than for
order executions in standard option
classes which are not in the Penny Pilot
Program (‘‘Non-Penny classes’’), where
Members are assessed higher transaction
fees and receive higher rebates.
Transaction rebates and fees
applicable to orders submitted by a
Member for the account of a Priority
Customer are currently assessed
according to the following table:
0.00%–0.05% ....................................
Above 0.05%–0.35% .........................
Above 0.35%–0.50% .........................
Above 0.50%–0.75% .........................
Above 0.75% .....................................
Per contract
rebates/fees
for non-penny
classes
Taker
($0.25)
($0.40)
($0.50)
($0.53)
($0.54)
$0.49
$0.49
$0.48
$0.48
$0.48
Maker
($0.85)
($1.05)
($1.05)
($1.05)
($1.05)
Taker
$0.87
$0.86
$0.85
$0.84
$0.84
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The Exchange proposes to decrease
the Taker fees for Priority Customer
orders for options in Penny classes in
each Tier to $0.38. The purpose of
decreasing the Taker fees for Priority
Customer orders for options in Penny
classes to $0.38 is for business and
competitive reasons to attract greater
Priority Customer order flow to the
Exchange. The Exchange believes that
significantly reducing the Taker fees for
Priority Customer orders for options in
Penny classes to $0.38 per contract fee
(regardless of the Tier the Member
achieves), will incentivize Members to
send greater Priority Customer order
flow to the Exchange due to favorable
pricing for this liquidity type.
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 10
in general, and furthers the objectives of
Section 6(b)(4) of the Act,11 in that it is
an equitable allocation of reasonable
fees and other charges among Exchange
members and other persons using its
facilities, and 6(b)(5) of the Act,12 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
3 ‘‘Priority Customer’’ means a person or entity
that (i) is not a broker or dealer in securities, and
(ii) does not place more than 390 orders in listed
options per day on average during a calendar month
for its own beneficial accounts(s). See Exchange
Rule 100, including Interpretations and Policies .01.
4 ‘‘Member’’ means an individual or organization
that is registered with the Exchange pursuant to
Chapter II of the Exchange Rules for purposes of
trading on the Exchange as an ‘‘Electronic Exchange
Member’’ or ‘‘Market Maker.’’ Members are deemed
‘‘members’’ under the Exchange Act. See the
Definitions Section of the Fee Schedule and
Exchange Rule 100.
5 ‘‘Excluded Contracts’’ means any contracts
routed to an away market for execution. See the
Definitions Section of the Fee Schedule.
6 ‘‘TCV’’ means total consolidated volume
calculated as the total national volume in those
classes listed on MIAX PEARL for the month for
which the fees apply, excluding consolidated
volume executed during the period time in which
the Exchange experiences an ‘‘Exchange System
Disruption’’ (solely in the option classes of the
affected Matching Engine (as defined below)). The
term Exchange System Disruption, which is defined
in the Definitions section of the Fee Schedule,
means an outage of a Matching Engine or collective
Matching Engines for a period of two consecutive
hours or more, during trading hours. The term
Matching Engine, which is also defined in the
Definitions section of the Fee Schedule, is a part of
the MIAX PEARL electronic system that processes
options orders and trades on a symbol-by-symbol
basis. Some Matching Engines will process option
classes with multiple root symbols, and other
Matching Engines may be dedicated to one single
option root symbol (for example, options on SPY
may be processed by one single Matching Engine
that is dedicated only to SPY). A particular root
symbol may only be assigned to a single designated
Matching Engine. A particular root symbol may not
be assigned to multiple Matching Engines. The
Exchange believes that it is reasonable and
appropriate to select two consecutive hours as the
amount of time necessary to constitute an Exchange
System Disruption, as two hours equates to
approximately 1.4% of available trading time per
month. The Exchange notes that the term
‘‘Exchange System Disruption’’ and its meaning
have no applicability outside of the Fee Schedule,
as it is used solely for purposes of calculating
volume for the threshold tiers in the Fee Schedule.
See the Definitions Section of the Fee Schedule.
7 ‘‘Affiliate’’ means (i) an affiliate of a Member of
at least 75% common ownership between the firms
as reflected on each firm’s Form BD, Schedule A,
or (ii) the Appointed Market Maker of an Appointed
EEM (or, conversely, the Appointed EEM of an
Appointed Market Maker). An ‘‘Appointed Market
Maker’’ is a MIAX PEARL Market Maker (who does
not otherwise have a corporate affiliation based
upon common ownership with an EEM) that has
been appointed by an EEM and an ‘‘Appointed
EEM’’ is an EEM (who does not otherwise have a
corporate affiliation based upon common
ownership with a MIAX PEARL Market Maker) that
has been appointed by a MIAX PEARL Market
Maker, pursuant to the process described in the Fee
Schedule. See the Definitions Section of the Fee
Schedule.
8 The term ‘‘System’’ means the automated
trading system used by the Exchange for the trading
of securities. See Exchange Rule 100.
9 See Securities Exchange Act Release No. 79778
(January 12, 2017), 82 FR 6662 (January 19, 2017)
(SR–PEARL–2016–01).
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(4).
12 15 U.S.C. 78f(b)(1) and (b)(5).
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2. Statutory Basis
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Federal Register / Vol. 82, No. 116 / Monday, June 19, 2017 / Notices
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 Taker fee decreases in
Penny classes applicable to orders
submitted by a Member for the account
of a Priority Customers is reasonable,
equitable and not unfairly
discriminatory because all Priority
Customer orders are subject to the same
Taker fees and access to the Exchange
is offered on terms that are not unfairly
discriminatory. The Exchange initially
set its Taker fees at the various volume
levels based upon business
determinations and an analysis of
current Taker fees and volume levels at
other exchanges. For competitive and
business reasons, the Exchange believes
that lower Taker fees assessable to
Priority Customer transactions in Penny
classes in all Tiers will encourage
Members to execute more volume in
Penny classes on behalf of Priority
Customers since they will be assessed
reduced fees in all Tiers for Priority
Customer orders for options in Penny
classes which remove liquidity. The
Exchange believes for these reasons that
offering the reduced Taker fees for
Priority Customer transactions in Penny
classes in all Tiers is equitable,
reasonable and not unfairly
discriminatory, and thus consistent with
the Act.
The Exchange believes that its
proposal to reduce Taker fees assessable
to transactions in options in Penny
classes and not to reduce Taker fees for
transactions in options in Non-Penny
classes is consistent with other options
markets that also assess different
transaction fees for options in NonPenny classes as compared to Penny
classes. The Exchange believes that
establishing different pricing for options
in Non-Penny classes and Penny classes
is reasonable, equitable, and not
unfairly discriminatory because options
in Penny classes are generally more
liquid as compared to Non-Penny
classes. Additionally, other competing
options exchanges differentiate pricing
in a similar manner today.13
Further, the Exchange believes that it
is equitable and not unfairly
discriminatory to assess lower fees to
Priority Customer orders than to nonPriority Customer orders. A Priority
13 See NASDAQ OMX PHLX LLC Pricing
Schedule, Section II; NYSE Amex Options Fee
Schedule, p. 6; Chicago Board Options Exchange,
Incorporated, Fee Schedule, p. 1. See also Securities
Exchange Act Release No. 68556 (January 2, 2013),
78 FR 1293 (January 8, 2013) (SR–BX–2012–074).
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Customer is by definition not a broker
or dealer in securities, and does not
place more than 390 orders in listed
options per day on average during a
calendar month for its own beneficial
account(s). This limitation does not
apply to participants on the Exchange
whose behavior is substantially similar
to that of market professionals,
including non-Priority Customers,
MIAX PEARL Market Makers, Firms,
and Broker-Dealers, who will generally
submit a higher number of orders (many
of which do not result in executions)
than Priority Customers.
Furthermore, the proposed decrease
to the Taker fees in Penny classes for
Priority Customer transactions in all
Tiers promotes just and equitable
principles of trade, fosters cooperation
and coordination with persons engaged
in facilitating transactions in securities,
and protects investors and the public
interest because the proposed decrease
in the fees will encourage Members to
send more orders to the Exchange even
if it is an order which takes liquidity
since they will be assessed a reduced
Taker fee in each Tier. To the extent that
Priority Customer order flow in Penny
classes is increased by the proposal,
market participants will increasingly
compete for the opportunity to trade on
the Exchange, including sending more
orders which will have the potential to
be assessed lower fees and higher
rebates. The resulting increased volume
and liquidity will benefit all Exchange
participants by providing more trading
opportunities and tighter spreads.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
MIAX PEARL does not believe that
the proposed rule changes will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed Taker fee decreases are
intended to encourage liquidity.
Further, the proposed elimination of
any Taker fee differential amongst the
Tiers should enable the Exchange to
attract and compete for order flow with
other exchanges which do assess higher
Taker fees in the lower Tiers thereby
adding liquidity.
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
rebates and fees to remain competitive
with other exchanges and to attract
order flow. The Exchange believes that
the proposed rule change reflects this
competitive environment because it
PO 00000
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modifies the Exchange’s fees in a
manner that encourages market
participants to send order flow 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,14 and Rule
19b–4(f)(2) 15 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–
PEARL–2017–29 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–PEARL–2017–29. 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
14 15
15 17
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U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
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Federal Register / Vol. 82, No. 116 / Monday, June 19, 2017 / Notices
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–
PEARL–2017–29 and should be
submitted on or before July 10, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–12587 Filed 6–16–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32679; 812–14435]
Triloma EIG Energy Income Fund, et
al.; Notice of Application
June 13, 2017.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
asabaliauskas on DSKBBXCHB2PROD with NOTICES
AGENCY:
Notice of an application under section
6(c) of the Investment Company Act of
1940 (the ‘‘Act’’) for an exemption from
sections 18(a)(2), 18(c), and 18(i) of the
Act and for an order pursuant to 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’’) with varying sales loads and
to impose asset-based service and/or
distribution fees, and contingent
deferred sales loads (‘‘CDSCs’’).
16 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:09 Jun 16, 2017
Jkt 241001
Triloma EIG Energy Income
Fund (the ‘‘Fund’’), Triloma Energy
Advisors, LLC (the ‘‘Adviser’’), and
Triloma Securities, LLC (the ‘‘Dealer
Manager’’) (together, the ‘‘Applicants’’).
FILING DATES: The application was filed
on March 20, 2015, and amended on
November 29, 2016, April 6, 2017, and
June 7, 2017.
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 July 8, 2017, 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, 201 North New York
Avenue, Suite 200, Winter Park, FL
32789.
FOR FURTHER INFORMATION CONTACT:
Jessica Shin, Attorney-Adviser, at (202)
551–5921 or Robert H. Shapiro, 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:
Applicants’ Representations
1. The Fund is a Delaware statutory
trust that is registered under the Act as
a non-diversified, closed-end
management investment company. The
Fund’s objective is primarily to provide
shareholders with current income; as
secondary investment objectives, the
Fund will seek to provide capital
preservation and, to a lesser extent,
long-term capital appreciation. The
Fund seeks to achieve its investment
objectives by investing primarily in a
global portfolio of privately originated
energy company and project debt.
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27915
2. The Adviser, a Florida 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.
3. The Dealer Manager is registered
with the Commission as a broker-dealer
under the Securities Exchange Act of
1934 (the ‘‘1934 Act’’) and will act as
the managing dealer of the Fund. The
Dealer Manager is under common
control with the Advisor and is an
affiliated person, as defined in section
2(a)(3) of the Act, of the Advisor.
4. The applicants seek an order to
permit the Fund to issue multiple
classes of Shares, each having its own
fee and expense structure, and to
impose asset-based distribution and/or
service fees, and CDSCs.
5. Applicants request that the order
also apply to any other continuously
offered registered closed-end
management investment company
existing now or in the future for which
the Adviser or the Dealer Manager or
any entity controlling, controlled by, or
under common control with the Adviser
or the Dealer Manager or its successors,1
acts as investment adviser or distributor,
respectively, and which provides
periodic liquidity with respect to its
Shares through tender offers conducted
in compliance with either rule 23c–3
under the Act or rule 13e–4 under the
1934 Act.2
6. The Fund currently issues a single
class of Shares (the ‘‘Initial Class
Shares’’). Shares are currently being
offered on a continuous basis pursuant
to a registration statement under the
Securities Act of 1933 and the Act at
daily closings at their public offering
price per share. The Fund, as a closedend investment company, does not
continuously redeem Shares as does an
open-end management investment
company. 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
ever develop for the Shares.
7. If the requested relief is granted, the
Fund intends to offer multiple classes of
Shares, such as the Initial Class Shares
and additional classes. Because of the
different distribution fees, service fees,
1 A successor in interest is limited to an entity
that results from a reorganization into another
jurisdiction or a change in the type of business
organization.
2 The Fund and any other investment company
relying on the requested relief will do so in a
manner consistent with the terms and conditions of
the application. Applicants represent that any
person presently intending to rely on the requested
relief is listed as an applicant.
E:\FR\FM\19JNN1.SGM
19JNN1
]]>Agencies
[Federal Register Volume 82, Number 116 (Monday, June 19, 2017)]
[Notices]
[Pages 27912-27915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12587]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80915; File No. SR-PEARL-2017-29]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
PEARL Fee Schedule
June 13, 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 June 7, 2017, MIAX PEARL, LLC (``MIAX PEARL''
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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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 PEARL Fee
Schedule (the ``Fee Schedule'').
The Exchange initially filed the proposal on May 26, 2017 (SR-
PEARL-2017-25). That filing was withdrawn and replaced with the current
filing (SR-PEARL-2017-29).
The text of the proposed rule change is available on the Exchange's
Web site at https://www.miaxoptions.com/rule-filings/pearl at MIAX
PEARL'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
[[Page 27913]]
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 Add/Remove Tiered Rebates/Fees
set forth in Section 1(a) of the Fee Schedule to decrease the ``Taker''
fees in all Tiers assessable to all orders submitted by a Member for
the account of a Priority Customer \3\ for options in Penny classes (as
defined below).
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\3\ ``Priority Customer'' means a person or entity that (i) is
not a broker or dealer in securities, and (ii) does not place more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial accounts(s). See Exchange Rule
100, including Interpretations and Policies .01.
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The Exchange currently assesses tiered transaction rebates and fees
to all market participants which are based upon the total monthly
volume executed by the Member \4\ on MIAX PEARL in the relevant,
respective origin type (not including Excluded Contracts) \5\ expressed
as a percentage of TCV.\6\ In addition, the per contract transaction
rebates and fees are applied retroactively to all eligible volume for
that origin type once the respective threshold tier (``Tier'') has been
reached by the Member. The Exchange aggregates the volume of Members
and their Affiliates.\7\ Members that place resting liquidity, i.e.,
orders resting on the book of the MIAX PEARL System,\8\ are paid the
specified ``maker'' rebate (each a ``Maker''), and Members that execute
against resting liquidity are assessed the specified ``taker'' fee
(each a ``Taker''). For opening transactions and ABBO uncrossing
transactions, per contract transaction rebates and fees are waived for
all market participants. Finally, Members are assessed lower
transaction fees and receive lower rebates for order executions in
standard option classes in the Penny Pilot Program \9\ (``Penny
classes'') than for order executions in standard option classes which
are not in the Penny Pilot Program (``Non-Penny classes''), where
Members are assessed higher transaction fees and receive higher
rebates.
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\4\ ``Member'' means an individual or organization that is
registered with the Exchange pursuant to Chapter II of the Exchange
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See the Definitions Section of
the Fee Schedule and Exchange Rule 100.
\5\ ``Excluded Contracts'' means any contracts routed to an away
market for execution. See the Definitions Section of the Fee
Schedule.
\6\ ``TCV'' means total consolidated volume calculated as the
total national volume in those classes listed on MIAX PEARL for the
month for which the fees apply, excluding consolidated volume
executed during the period time in which the Exchange experiences an
``Exchange System Disruption'' (solely in the option classes of the
affected Matching Engine (as defined below)). The term Exchange
System Disruption, which is defined in the Definitions section of
the Fee Schedule, means an outage of a Matching Engine or collective
Matching Engines for a period of two consecutive hours or more,
during trading hours. The term Matching Engine, which is also
defined in the Definitions section of the Fee Schedule, is a part of
the MIAX PEARL electronic system that processes options orders and
trades on a symbol-by-symbol basis. Some Matching Engines will
process option classes with multiple root symbols, and other
Matching Engines may be dedicated to one single option root symbol
(for example, options on SPY may be processed by one single Matching
Engine that is dedicated only to SPY). A particular root symbol may
only be assigned to a single designated Matching Engine. A
particular root symbol may not be assigned to multiple Matching
Engines. The Exchange believes that it is reasonable and appropriate
to select two consecutive hours as the amount of time necessary to
constitute an Exchange System Disruption, as two hours equates to
approximately 1.4% of available trading time per month. The Exchange
notes that the term ``Exchange System Disruption'' and its meaning
have no applicability outside of the Fee Schedule, as it is used
solely for purposes of calculating volume for the threshold tiers in
the Fee Schedule. See the Definitions Section of the Fee Schedule.
\7\ ``Affiliate'' means (i) an affiliate of a Member of at least
75% common ownership between the firms as reflected on each firm's
Form BD, Schedule A, or (ii) the Appointed Market Maker of an
Appointed EEM (or, conversely, the Appointed EEM of an Appointed
Market Maker). An ``Appointed Market Maker'' is a MIAX PEARL Market
Maker (who does not otherwise have a corporate affiliation based
upon common ownership with an EEM) that has been appointed by an EEM
and an ``Appointed EEM'' is an EEM (who does not otherwise have a
corporate affiliation based upon common ownership with a MIAX PEARL
Market Maker) that has been appointed by a MIAX PEARL Market Maker,
pursuant to the process described in the Fee Schedule. See the
Definitions Section of the Fee Schedule.
\8\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
\9\ See Securities Exchange Act Release No. 79778 (January 12,
2017), 82 FR 6662 (January 19, 2017) (SR-PEARL-2016-01).
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Transaction rebates and fees applicable to orders submitted by a
Member for the account of a Priority Customer are currently assessed
according to the following table:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Per contract rebates/fees for Per contract rebates/fees for
penny classes non-penny classes
Origin Tier Volume criteria ---------------------------------------------------------------
Maker Taker Maker Taker
--------------------------------------------------------------------------------------------------------------------------------------------------------
Priority Customer......................... 1 0.00%-0.05%................. ($0.25) $0.49 ($0.85) $0.87
2 Above 0.05%-0.35%........... ($0.40) $0.49 ($1.05) $0.86
3 Above 0.35%-0.50%........... ($0.50) $0.48 ($1.05) $0.85
4 Above 0.50%-0.75%........... ($0.53) $0.48 ($1.05) $0.84
5 Above 0.75%................. ($0.54) $0.48 ($1.05) $0.84
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Exchange proposes to decrease the Taker fees for Priority
Customer orders for options in Penny classes in each Tier to $0.38. The
purpose of decreasing the Taker fees for Priority Customer orders for
options in Penny classes to $0.38 is for business and competitive
reasons to attract greater Priority Customer order flow to the
Exchange. The Exchange believes that significantly reducing the Taker
fees for Priority Customer orders for options in Penny classes to $0.38
per contract fee (regardless of the Tier the Member achieves), will
incentivize Members to send greater Priority Customer order flow to the
Exchange due to favorable pricing for this liquidity type.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \10\ in general, and
furthers the objectives of Section 6(b)(4) of the Act,\11\ in that it
is an equitable allocation of reasonable fees and other charges among
Exchange members and other persons using its facilities, and 6(b)(5) of
the Act,\12\ 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
[[Page 27914]]
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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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 15 U.S.C. 78f(b)(1) and (b)(5).
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The proposed Taker fee decreases in Penny classes applicable to
orders submitted by a Member for the account of a Priority Customers is
reasonable, equitable and not unfairly discriminatory because all
Priority Customer orders are subject to the same Taker fees and access
to the Exchange is offered on terms that are not unfairly
discriminatory. The Exchange initially set its Taker fees at the
various volume levels based upon business determinations and an
analysis of current Taker fees and volume levels at other exchanges.
For competitive and business reasons, the Exchange believes that lower
Taker fees assessable to Priority Customer transactions in Penny
classes in all Tiers will encourage Members to execute more volume in
Penny classes on behalf of Priority Customers since they will be
assessed reduced fees in all Tiers for Priority Customer orders for
options in Penny classes which remove liquidity. The Exchange believes
for these reasons that offering the reduced Taker fees for Priority
Customer transactions in Penny classes in all Tiers is equitable,
reasonable and not unfairly discriminatory, and thus consistent with
the Act.
The Exchange believes that its proposal to reduce Taker fees
assessable to transactions in options in Penny classes and not to
reduce Taker fees for transactions in options in Non-Penny classes is
consistent with other options markets that also assess different
transaction fees for options in Non-Penny classes as compared to Penny
classes. The Exchange believes that establishing different pricing for
options in Non-Penny classes and Penny classes is reasonable,
equitable, and not unfairly discriminatory because options in Penny
classes are generally more liquid as compared to Non-Penny classes.
Additionally, other competing options exchanges differentiate pricing
in a similar manner today.\13\
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\13\ See NASDAQ OMX PHLX LLC Pricing Schedule, Section II; NYSE
Amex Options Fee Schedule, p. 6; Chicago Board Options Exchange,
Incorporated, Fee Schedule, p. 1. See also Securities Exchange Act
Release No. 68556 (January 2, 2013), 78 FR 1293 (January 8, 2013)
(SR-BX-2012-074).
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Further, the Exchange believes that it is equitable and not
unfairly discriminatory to assess lower fees to Priority Customer
orders than to non-Priority Customer orders. A Priority Customer is by
definition not a broker or dealer in securities, and does not place
more than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). This limitation does
not apply to participants on the Exchange whose behavior is
substantially similar to that of market professionals, including non-
Priority Customers, MIAX PEARL Market Makers, Firms, and Broker-
Dealers, who will generally submit a higher number of orders (many of
which do not result in executions) than Priority Customers.
Furthermore, the proposed decrease to the Taker fees in Penny
classes for Priority Customer transactions in all Tiers promotes just
and equitable principles of trade, fosters cooperation and coordination
with persons engaged in facilitating transactions in securities, and
protects investors and the public interest because the proposed
decrease in the fees will encourage Members to send more orders to the
Exchange even if it is an order which takes liquidity since they will
be assessed a reduced Taker fee in each Tier. To the extent that
Priority Customer order flow in Penny classes is increased by the
proposal, market participants will increasingly compete for the
opportunity to trade on the Exchange, including sending more orders
which will have the potential to be assessed lower fees and higher
rebates. The resulting increased volume and liquidity will benefit all
Exchange participants by providing more trading opportunities and
tighter spreads.
B. Self-Regulatory Organization's Statement on Burden on Competition
MIAX PEARL does not believe that the proposed rule changes will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed Taker fee
decreases are intended to encourage liquidity. Further, the proposed
elimination of any Taker fee differential amongst the Tiers should
enable the Exchange to attract and compete for order flow with other
exchanges which do assess higher Taker fees in the lower Tiers thereby
adding liquidity.
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 rebates and fees
to remain competitive with other exchanges and to attract order flow.
The Exchange believes that the proposed rule change reflects this
competitive environment because it modifies the Exchange's fees in a
manner that encourages market participants to send order flow 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,\14\ and Rule 19b-4(f)(2) \15\ 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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\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
\15\ 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-PEARL-2017-29 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-PEARL-2017-29. 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
[[Page 27915]]
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-PEARL-2017-29 and should be submitted on or before July
10, 2017.
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\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-12587 Filed 6-16-17; 8:45 am]
BILLING CODE 8011-01-P
