Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 40583-40587 [2018-17493]
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Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 / Notices
annual burden-hours incurred,
approximately 8 hours would be spent
by administrative assistants at an hourly
rate of $82, and approximately 4 hours
would be spent by internal counsel at an
hourly rate of $422, for a total
annualized internal cost of compliance
of $2,344 for each of the covered entities
(8 × $82 = $656; 4 × $422 = $1,688; $656
+ $1,688 = $2,344). Hourly cost of
compliance estimates for administrative
assistant time are derived from the
Securities Industry and Financial
Markets Association’s Office Salaries in
the Securities Industry 2013, modified
by SEC staff to account for an 1,800hour work-year and multiplied by 2.93
to account for bonuses, firm size,
employee benefits and overhead. Hourly
cost of compliance estimates for internal
counsel time are derived from the
Securities Industry and Financial
Markets Association’s Management &
Professional Earnings in the Securities
Industry 2013, modified by SEC staff to
account for an 1,800-hour work-year
and multiplied by 5.35 to account for
bonuses, firm size, employee benefits,
and overhead. Accordingly, SEC staff
estimates that the total annualized
internal cost of compliance for the
estimated total hour burden for the
approximately 20,465 covered entities
subject to the Rule is approximately
$47,969,960 ($2,344 × 20,465 =
$47,969,960).
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: Pamela Dyson, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington,
DC 20549, or send an email to: PRA_
Mailbox@sec.gov.
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Dated: August 9, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–17488 Filed 8–14–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83812; File No. SR–MIAX–
2018–21]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Its Fee Schedule
August 9, 2018.
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 July 31, 2018, 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 notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX Options Fee Schedule
(the ‘‘Fee Schedule’’).
The text of the proposed rule change
is available on the Exchange’s website at
https://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.
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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40583
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
Market Maker Sliding Scale (defined
below) contained in its Fee Schedule,
and assessed to MIAX Options Market
Makers,3 to (i) modify certain volume
thresholds, and (ii) increase certain
Maker (as defined below) fees in certain
Tiers for options transactions in Penny
classes (as defined below) executed in
the simple order book.
Section 1)a)i) of the Fee Schedule sets
forth the Exchange’s Market Maker
Sliding Scale for Market Maker
Transaction Fees (the ‘‘Sliding Scale’’).
The Sliding Scale assesses a per contract
transaction fee on a Market Maker for
the execution of simple orders and
quotes (collectively, ‘‘simple orders’’)
and complex orders and quotes
(collectively, ‘‘complex orders’’). The
percentage threshold by tier is based on
the Market Maker’s percentage of total
national market maker volume in all
options classes that trade on the
Exchange during a particular calendar
month, or total aggregated volume
(‘‘TAV’’), and the Exchange aggregates
the volume executed by Market Makers
in both simple orders and complex
orders for purposes of determining the
applicable tier and corresponding per
contract transaction fee amount.4 The
Sliding Scale applies to all MIAX
Options Market Makers for transactions
in all products (except for mini-options,
for which there are separate product
fees), with fees established for standard
option classes in the Penny Pilot
Program 5 (‘‘Penny classes’’) and
separate fees for standard option classes
which are not in the Penny Pilot
3 The term ‘‘Market Makers’’ refers to Lead Market
Makers (‘‘LMMs’’), Primary Lead Market Makers
(‘‘PLMMs’’), and Registered Market makers
(‘‘RMMs’’) collectively. See Exchange Rule 100. A
Directed Order Lead Market Maker (‘‘DLMM’’) and
Directed Primary Lead Market Maker (‘‘DPLMM’’) is
a party to a transaction being allocated to the LMM
or PLMM and is the result of an order that has been
directed to the LMM or PLMM. See Fee Schedule,
note 2.
4 The calculation of the volume thresholds does
not include QCC and cQCC Orders, PRIME and
cPRIME AOC Responses, and unrelated MIAX
Market Maker quotes or unrelated MIAX Market
Maker orders that are received during the Response
Time Interval and executed against the PRIME
Order (‘‘PRIME Participating Quotes or Orders’’)
and unrelated MIAX Market Maker complex quotes
or unrelated MIAX Market Maker complex orders
that are received during the Response Time Interval
and executed against a cPRIME Order (‘‘cPRIME
Participating Quote or Order’’) (herein ‘‘Excluded
Contracts’’). See Fee Schedule, page 2.
5 See Securities Exchange Act Release No. 83515
(June 25, 2018), 83 FR 30786 (June 29, 2018) (SR–
MIAX–2018–12).
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Program (‘‘non-Penny classes’’), and
further based on whether the Market
Maker is acting as a ‘‘Maker’’ or a
‘‘Taker’’ in simple orders.6 Market
Makers that place resting liquidity, i.e.,
quotes or orders on the MIAX Options
System,7 are assessed the ‘‘maker’’ fee
(each a ‘‘Maker’’). Market Makers that
execute against (remove) resting
liquidity are assessed a higher ‘‘taker’’
fee (each a ‘‘Taker’’). This is
distinguished from traditional ‘‘makertaker’’ models where ‘‘makers’’ typically
receive a rebate and ‘‘takers’’ are
applicable to Members and their
Affiliates that are in PCRP Volume Tier
3 or higher; and the other setting forth
the transaction fees applicable to
Members and their Affiliates that are not
in PCRP Volume Tier 3 or higher. The
Sliding Scale also includes Maker and
Taker fees in both tables in each Tier for
simple orders in Penny classes and nonPenny classes where the fees are
discounted/differentiated between the
tables.
The current Sliding Scale tables are as
follows:
assessed a fee; the Exchange instead
assesses lower transaction fees to
‘‘makers’’ as compared to ‘‘takers,’’
similar to the manner implemented at
other exchanges.8
Further, the Exchange provides
certain discounted Market Maker
transaction fees for Members 9 and their
qualified Affiliates 10 that achieve
certain volume thresholds through the
submission of Priority Customer 11
orders under the Exchange’s Priority
Customer Rebate Program (‘‘PCRP’’),12
which is set forth on two tables: one
setting forth the transaction fees
MEMBERS AND THEIR AFFILIATES IN PRIORITY CUSTOMER REBATE PROGRAM VOLUME TIER 3 OR HIGHER
Simple
Complex
Per contract fee for
penny classes
Maker
Tier
All MIAX Market Makers
1
2
3
4
5
Per contract fee for
non-penny classes
Taker
Per
contract
fee for
penny
classes
Per
contract
fee for
nonpenny
classes
Per contract surcharge for removing
liquidity against a
resting priority
customer complex
order on the strategy
book for penny and
non-penny classes
Taker
Maker
$0.21
0.15
0.08
0.04
0.02
$0.23
0.22
0.19
0.18
0.17
$0.25
0.19
0.12
0.08
0.06
$0.30
0.27
0.23
0.22
0.21
$0.25
0.19
0.12
0.07
0.05
$0.29
0.23
0.16
0.11
0.09
$0.10
0.10
0.10
0.10
0.10
Percentage thresholds
0.00–0.075 ...........................
Above 0.075–0.60 ................
Above 0.60–1.00 ..................
Above 1.00–1.50 ..................
Above 1.50 ...........................
MEMBERS AND THEIR AFFILIATES NOT IN PRIORITY CUSTOMER REBATE PROGRAM VOLUME TIER 3 OR HIGHER
Simple
Complex
Per contract fee for
penny classes
Maker
Tier
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1
2
3
4
18:28 Aug 14, 2018
Taker
Per
contract
fee for
penny
classes
Per
contract
fee for
nonpenny
classes
Per contract surcharge for removing
liquidity against a
resting priority
customer complex
order on the strategy
book for penny and
non-penny classes
Taker
Maker
$0.23
0.17
0.10
0.06
$0.25
0.24
0.21
0.20
$0.27
0.21
0.14
0.10
$0.32
0.29
0.25
0.24
$0.25
0.19
0.12
0.07
$0.29
0.23
0.16
0.11
$0.10
0.10
0.10
0.10
Percentage thresholds
0.00–0.075 ...........................
Above 0.075–0.60 ................
Above 0.60–1.00 ..................
Above 1.00–1.50 ..................
6 See Securities Exchange Act Release No. 78519
(August 9, 2016), 81 FR 54162 (August 15, 2016)
(SR–MIAX–2016–21).
7 The term ‘‘System’’ means the automated
trading system used by the Exchange for the trading
of securities. See Exchange Rule 100.
8 The Exchange notes that similar maker-taker
pricing is implemented at Nasdaq ISE, LLC (‘‘ISE’’).
See Nasdaq ISE Fee Schedule, Section I Regular
Order Fees and Rebates.
9 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.
10 For purposes of the MIAX Options Fee
Schedule, the term ‘‘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, (‘‘Affiliate’’), 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
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
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based upon common ownership with a MIAX
Market Maker) that has been appointed by a MIAX
Market Maker, pursuant to the following process. A
MIAX Market Maker appoints an EEM and an EEM
appoints a MIAX Market Maker, for the purposes
of the Fee Schedule, by each completing and
sending an executed Volume Aggregation Request
Form by email to membership@miaxoptions.com no
later than 2 business days prior to the first business
day of the month in which the designation is to
become effective. Transmittal of a validly
completed and executed form to the Exchange along
with the Exchange’s acknowledgement of the
effective designation to each of the Market Maker
and EEM will be viewed as acceptance of the
appointment. The Exchange will only recognize one
designation per Member. A Member may make a
designation not more than once every 12 months
(from the date of its most recent designation), which
designation shall remain in effect unless or until the
Exchange receives written notice submitted 2
business days prior to the first business day of the
month from either Member indicating that the
appointment has been terminated. Designations will
become operative on the first business day of the
effective month and may not be terminated prior to
the end of the month. Execution data and reports
will be provided to both parties. See Fee Schedule,
note 1.
PO 00000
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11 The term ‘‘Priority Customer’’ means a person
or entity that (i) is not a broker or dealer in
securities, and (ii) does not place more than 390
orders in listed options per day on average during
a calendar month for its own beneficial account(s).
A ‘‘Priority Customer Order’’ means an order for the
account of a Priority Customer. See Exchange Rule
100.
12 Under the PCRP, MIAX Options credits each
Member the per contract amount resulting from
each Priority Customer order transmitted by that
Member which is executed electronically on the
Exchange in all multiply-listed option classes
(excluding, in simple or complex as applicable,
QCC and cQCC Orders, mini-options, Priority
Customer-to-Priority Customer Orders, C2C and
cC2C Orders, PRIME and cPRIME AOC Responses,
PRIME and cPRIME Contra-side Orders, PRIME and
cPRIME Orders for which both the Agency and
Contra-side Order are Priority Customers, and
executions related to contracts that are routed to
one or more exchanges in connection with the
Options Order Protection and Locked/Crossed
Market Plan referenced in Exchange Rule 1400),
provided the Member meets certain percentage
thresholds in a month as described in the Priority
Customer Rebate Program table. See Fee Schedule,
Section 1)a)iii.
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MEMBERS AND THEIR AFFILIATES NOT IN PRIORITY CUSTOMER REBATE PROGRAM VOLUME TIER 3 OR HIGHER—
Continued
Simple
Complex
Per contract fee for
penny classes
Maker
Tier
5
Per contract fee for
non-penny classes
Taker
Per
contract
fee for
penny
classes
Per
contract
fee for
nonpenny
classes
Per contract surcharge for removing
liquidity against a
resting priority
customer complex
order on the strategy
book for penny and
non-penny classes
Taker
Maker
0.04
0.19
0.08
0.23
0.05
0.09
0.10
Percentage thresholds
Above 1.50 ...........................
First, the Exchange proposes to
modify the monthly volume thresholds
in the Market Maker Sliding Scale in
both the table setting forth the
transaction fees applicable to Members
and their Affiliates that are in PCRP
Volume Tier 3 or higher; and in the
second table setting forth the transaction
fees applicable to Members and their
Affiliates that are not in PCRP Volume
Tier 3 or higher. Specifically, the
Exchange proposes to adjust the
percentage threshold of Tier 2 from
above 0.075% up to 0.60% of the total
monthly volume executed by the
Member on MIAX Options, not
including Excluded Contracts, divided
by the TAV, to become above 0.075%
up to 0.70% of the total monthly
volume executed by the Member on
MIAX Options, not including Excluded
Contracts, divided by the TAV. The
Exchange proposes to adjust the
percentage threshold of Tier 3 from
above 0.60% up to 1.00% of the total
monthly volume executed by the
Member on MIAX Options, not
including Excluded Contracts, divided
by the TAV, to become above 0.70% up
to 1.10% of the total monthly volume
executed by the Member on MIAX, not
including Excluded Contracts, divided
by the TAV. The Exchange proposes to
adjust the percentage threshold of Tier
4 from above 1.00% up to 1.50% of the
total monthly volume executed by the
Member on MIAX Options, not
including Excluded Contracts, divided
by the TAV, to become above 1.10% up
to 1.50% of the total monthly volume
executed by the Member on MIAX
Options, not including Excluded
Contracts, divided by the TAV. The
Exchange does not propose any
adjustment to the percentage thresholds
of Tier 1 or Tier 5.
Second, the Exchange proposes to
increase the Maker fees in the Market
Maker Sliding Scale, in Tiers 2, 3, 4 and
5 for Penny classes, for Members and
their Affiliates that are in PCRP Volume
Tier 3 or higher and also for Members
and their Affiliates not in PCRP Volume
Tier 3 or higher. For options
transactions in Penny classes by
Members and their Affiliates that are in
PCRP Volume Tier 3 or higher, the
Exchange proposes to increase the
Maker fee in Tier 2 from $0.15 to $0.16,
in Tier 3 from $0.08 to $0.10, in Tier 4
from $0.04 to $0.05 and in Tier 5 from
$0.02 to $0.03. For options transactions
in Penny classes by Members and their
Affiliates that are not in PCRP Volume
Tier 3 or higher, the Exchange proposes
to increase the Maker fee in Tier 2 from
$0.17 to $0.18, in Tier 3 from $0.10 to
$0.12, in Tier 4 from $0.06 to $0.07 and
in Tier 5 from $0.04 to $0.05.
With all proposed changes Section
1)a)i of the Fee Schedule shall be the
following:
MEMBERS AND THEIR AFFILIATES IN PRIORITY CUSTOMER REBATE PROGRAM VOLUME TIER 3 OR HIGHER
Simple
Complex
All MIAX Market Makers
1
2
3
4
5
Percentage thresholds
0.00–0.075 ...........................
Above 0.075–0.70 ................
Above 0.70–1.10 ..................
Above 1.10–1.50 ..................
Above 1.50 ...........................
Per contract fee for
non-penny classes
Maker *
Tier
Per contract fee for
penny classes
Taker
Per
contract
fee for
penny
classes
Per
contract
fee for
nonpenny
classes
Per contract surcharge for trading
against a priority customer complex order
for penny and nonpenny classes
Taker
Maker *
$0.21
0.16
0.10
0.05
0.03
$0.23
0.22
0.19
0.18
0.17
$0.25
0.19
0.12
0.08
0.06
$0.30
0.27
0.23
0.22
0.21
$0.25
0.24
0.21
0.20
0.19
$0.32
0.29
0.25
0.24
0.23
$0.12
0.12
0.12
0.12
0.12
MEMBERS AND THEIR AFFILIATES NOT IN PRIORITY CUSTOMER REBATE PROGRAM VOLUME TIER 3 OR HIGHER
Simple
Complex
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2
3
4
5
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Percentage thresholds
Per contract fee for
penny classes
Per contract fee for
non-penny classes
Maker *
Tier
Taker
Maker *
0.23
0.18
0.12
0.07
0.05
0.25
0.24
0.21
0.20
0.19
0.27
0.21
0.14
0.10
0.08
Sfmt 4703
E:\FR\FM\15AUN1.SGM
0.00–0.075 ...........................
Above 0.075–0.70 ................
Above 0.70–1.10 ..................
Above 1.10–1.50 ..................
Above 1.50 ...........................
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Taker
Per contract fee
for penny
classes
Per contract fee
for nonpenny
classes
Per contract surcharge for trading
against a priority customer complex order
for penny and nonpenny classes
0.32
0.29
0.25
0.24
0.23
0.25
0.24
0.21
0.20
0.19
0.32
0.29
0.25
0.24
0.23
0.12
0.12
0.12
0.12
0.12
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The proposed rule change is
scheduled to become operative August
1, 2018.
2. Statutory Basis
The Exchange believes that its
proposal to amend its fee schedule is
consistent with Section 6(b) of the Act 13
in general, and furthers the objectives of
Section 6(b)(4) of the Act,14 in that it is
an equitable allocation of reasonable
dues, fees and other charges among
Exchange members and issuers and
other persons using its facilities. The
Exchange also believes the proposal
furthers the objectives of Section 6(b)(5)
of the Act,15 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 and is not designed to
permit unfair discrimination between
customer, issuers, brokers and dealers.
The Exchange believes that the
proposed changes to the Tier percentage
thresholds in the Market Maker Sliding
Scale are consistent with Section 6(b)(4)
and 6(b)(5) of the Act in that they are
fair, equitable and not unfairly
discriminatory because they apply
equally to all MIAX Options Market
Makers. All MIAX Options Market
Makers are subject to the same fee
schedule, and access to the Exchange is
offered on terms that are not unfairly
discriminatory.
The Exchange believes that the
proposed changes to the Tier percentage
thresholds in the Market Maker Sliding
Scale are consistent with Section 6(b)(5)
of the Act in that they promote equitable
access to the Exchange for all market
participants. To the extent that MIAX
Options Marker Maker volume is
increased by the proposal, market
participants will increasingly compete
for the opportunity to trade on the
Exchange including sending more
orders and quotes to the Exchange. The
resulting increased volume and
liquidity will benefit all Exchange
participants by providing more trading
opportunities and tighter spreads.
The specific percentage thresholds of
the Tiers for Market Makers as well as
the fees are set based upon business
determinations and an analysis of
current volume levels. The Exchange
13 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
15 15 U.S.C. 78f (b)(5).
14 15
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18:28 Aug 14, 2018
Jkt 244001
believes that the proposed Maker fees
are generally within the range of fees at
other exchanges that have a comparable
pricing structure.16 The percentage
thresholds are intended to continue to
incentivize MIAX Options Market
Makers to increase the number of orders
and quotes they send to the Exchange so
that they can achieve the next threshold,
and to encourage all market participants
to send more orders and quotes as well.
Increasing the number of orders and
quotes sent to the Exchange will in turn
provide tighter and more liquid markets,
and therefore attract more business
overall. Similarly, the different fees at
the different Tier levels are based on an
analysis of current revenue and volume
levels and are intended to provide
continued incentives to MIAX Options
Market Makers to increase the volume of
orders and quotes sent to, and contracts
executed on, the Exchange. The specific
volume thresholds of the Tiers and rates
are set in order to encourage MIAX
Options Market Makers to continue to
reach for higher tiers.
The proposed Maker fee increases in
Penny Classes for simple orders in the
specified Tiers is reasonable, equitable
and not unfairly discriminatory because
all similarly situated MIAX Options
Market Makers are subject to the same
tiered fees and access to the Exchange
is offered on terms that are not unfairly
discriminatory. For competitive and
business reasons, the Exchange has kept
its Maker fees for simple orders in
Penny Classes lower than certain other
options exchanges that operate
comparable pricing models.17 The
Exchange now believes that it is
16 See NYSE American LLC (‘‘NYSE American’’)
Fee Schedule, p. 11. The NYSE American Market
Maker Sliding Scale Tier 1 percentage threshold is
from 0.00% to 0.20%, with a per contract non-take
volume fee of $0.25 and a per contract take volume
fee of $0.25, the Tier 2 percentage threshold is from
greater than 0.20% to 0.65%, with a per contract
non-take volume fee of $0.22 and a per contract take
volume fee of $0.24, the Tier 3 percentage threshold
is from greater than 0.65% to 1.40%, with a per
contract non-take volume fee of $0.12 and a per
contract take volume fee of $0.17, the Tier 4
percentage threshold is from greater than 1.40% to
2.00%, with a per contract non-take volume fee of
$0.09 and a per contract take volume fee of $0.14,
and the Tier 5 percentage threshold is greater than
2.020%, with a per contract non-take volume fee of
$0.06 and a per contract take volume fee of $0.09.
See also Cboe Exchange, Inc. (‘‘CBOE’’) Fees
Schedule, p. 3. The CBOE Liquidity Provider
Sliding Scale Tier 1 percentage threshold is from
0.00% to 0.05%, with a transaction fee per contract
of $0.23, the Tier 2 percentage threshold is from
above 0.05% to 0.80%, with a transaction fee per
contract of $0.17, the Tier 3 percentage threshold
is from above 0.80% to 1.50%, with a transaction
fee per contract of $0.10, the Tier 4 percentage
threshold is from above 1.50% to 2.25%, with a
transaction fee per contract of $0.05, and the Tier
5 percentage threshold is above 2.25%, with a
transaction fee per contract of $0.03.
17 Id.
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
appropriate to increase those Maker fees
so that they are more in line with other
exchanges, and will still remain highly
competitive such that they should
enable the Exchange to continue to
attract order flow and grow market
share. While distinguished from the
traditional ‘‘maker-taker’’ fee model
under which an exchange pays a percontract rebate to their members to
encourage them to place resting
liquidity by providing quotes and orders
(‘‘maker’’) on their trading systems and
assessing a fee that executes against a
resting order (‘‘taker’’), the Exchange
assesses a reduced fee for ‘‘makers’’ as
compared to ‘‘takers’’ rather than giving
the ‘‘maker’’ a rebate. Further,
Exchange’s proposal to assess a higher
Maker fee is reasonable, equitable and
not unfairly discriminatory because this
would narrow the difference between
the Maker and Taker fees, which would
in turn benefit the public and investors
by encouraging Market Makers to
provide more order flow.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed fee structure is intended to
promote narrower spreads and
encourage the posting of liquidity
(instead of taking liquidity), and thus
should promote better prices. The
Exchange believes that the proposed
changes in the Tier structure in the
Market Maker Sliding Scale should
continue to encourage the provision of
liquidity that enhances the quality of
the Exchange’s markets and increases
the number of trading opportunities on
MIAX Options for all participants who
will be able to compete for such
opportunities. The proposed rule
change should enable the Exchange to
continue to attract and compete for
order flow with other exchanges.
However, this competition does not
create an undue burden on competition
but rather offers all market participants
the opportunity to receive the benefit of
competitive pricing.
The proposed Maker fee increases are
intended to keep the Exchange’s fees
highly competitive with those of other
exchanges, and to encourage liquidity
and should enable the Exchange to
continue to attract and compete for
order flow with other exchanges which
offer comparable Maker fees.
The Exchange notes that it operates in
a highly competitive market in which
market participants can readily favor
competing venues if they deem fee
E:\FR\FM\15AUN1.SGM
15AUN1
Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 / Notices
levels at a particular venue to be
excessive. In such an environment, the
Exchange must continually adjust its
fees to remain competitive with other
exchanges and to attract order flow. The
Exchange believes that the proposed
rule changes reflect this competitive
environment because they modify the
Exchange’s fees in a manner that
encourages market participants to
provide liquidity and to send order flow
to the Exchange rather than remove
liquidity from the market place.
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,18 and Rule
19b–4(f)(2) 19 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:
daltland on DSKBBV9HB2PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
MIAX–2018–21 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–MIAX–2018–21. This file
18 15
19 17
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
VerDate Sep<11>2014
18:28 Aug 14, 2018
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 website (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 website 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–MIAX–2018–21, and
should be submitted on or before
September 5, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–17493 Filed 8–14–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
33197; File No. 812–14838]
Thrivent Financial for Lutherans, et al.
August 9, 2018.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
Notice of application for an order
under section 17(d) of the Investment
Company Act of 1940 (the ‘‘Act’’) and
rule 17d–1 under the Act to permit
certain joint transactions otherwise
prohibited by section 17(d) of the Act
and rule 17d–1 under the Act.
20 17
Jkt 244001
PO 00000
CFR 200.30–3(a)(12).
Frm 00089
Fmt 4703
Sfmt 4703
40587
Applicants
request an order to permit closed-end
management investment companies to
co-invest in portfolio companies with
each other and with certain affiliated
investment funds and accounts.
APPLICANTS: Thrivent Financial for
Lutherans (‘‘Thrivent Financial’’),
Thrivent Asset Management, LLC
(‘‘Thrivent Asset Management’’ and,
together with Thrivent Financial, the
‘‘Existing Advisers’’), and Thrivent
Church Loan and Income Fund
(‘‘Church Loan Fund’’ and, together
with the Existing Advisers, the
‘‘Applicants’’).
FILING DATES: The application was filed
on November 1, 2017, and amended on
March 28, 2018 and June 22, 2018.
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 September 4, 2018, 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 St.
NE, Washington, DC 20549–1090.
Applicants: 625 Fourth Avenue South,
Minneapolis, Minnesota 55415.
FOR FURTHER INFORMATION CONTACT: Jill
Ehrlich, Senior Counsel, at (202) 551–
6819, or Andrea Ottomanelli Magovern,
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
website by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
SUMMARY OF APPLICATION:
Applicants’ Representations
1. The Church Loan Fund is a
Delaware statutory trust that will be
registered as a non-diversified, closedend management investment company.
The Church Loan Fund’s investment
E:\FR\FM\15AUN1.SGM
15AUN1
]]>Agencies
[Federal Register Volume 83, Number 158 (Wednesday, August 15, 2018)]
[Notices]
[Pages 40583-40587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17493]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83812; File No. SR-MIAX-2018-21]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule
August 9, 2018.
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 July 31, 2018, 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 notice
to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend the MIAX Options Fee
Schedule (the ``Fee Schedule'').
The text of the proposed rule change is available on the Exchange's
website at https://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 the Market Maker Sliding Scale
(defined below) contained in its Fee Schedule, and assessed to MIAX
Options Market Makers,\3\ to (i) modify certain volume thresholds, and
(ii) increase certain Maker (as defined below) fees in certain Tiers
for options transactions in Penny classes (as defined below) executed
in the simple order book.
---------------------------------------------------------------------------
\3\ The term ``Market Makers'' refers to Lead Market Makers
(``LMMs''), Primary Lead Market Makers (``PLMMs''), and Registered
Market makers (``RMMs'') collectively. See Exchange Rule 100. A
Directed Order Lead Market Maker (``DLMM'') and Directed Primary
Lead Market Maker (``DPLMM'') is a party to a transaction being
allocated to the LMM or PLMM and is the result of an order that has
been directed to the LMM or PLMM. See Fee Schedule, note 2.
---------------------------------------------------------------------------
Section 1)a)i) of the Fee Schedule sets forth the Exchange's Market
Maker Sliding Scale for Market Maker Transaction Fees (the ``Sliding
Scale''). The Sliding Scale assesses a per contract transaction fee on
a Market Maker for the execution of simple orders and quotes
(collectively, ``simple orders'') and complex orders and quotes
(collectively, ``complex orders''). The percentage threshold by tier is
based on the Market Maker's percentage of total national market maker
volume in all options classes that trade on the Exchange during a
particular calendar month, or total aggregated volume (``TAV''), and
the Exchange aggregates the volume executed by Market Makers in both
simple orders and complex orders for purposes of determining the
applicable tier and corresponding per contract transaction fee
amount.\4\ The Sliding Scale applies to all MIAX Options Market Makers
for transactions in all products (except for mini-options, for which
there are separate product fees), with fees established for standard
option classes in the Penny Pilot Program \5\ (``Penny classes'') and
separate fees for standard option classes which are not in the Penny
Pilot
[[Page 40584]]
Program (``non-Penny classes''), and further based on whether the
Market Maker is acting as a ``Maker'' or a ``Taker'' in simple
orders.\6\ Market Makers that place resting liquidity, i.e., quotes or
orders on the MIAX Options System,\7\ are assessed the ``maker'' fee
(each a ``Maker''). Market Makers that execute against (remove) resting
liquidity are assessed a higher ``taker'' fee (each a ``Taker''). This
is distinguished from traditional ``maker-taker'' models where
``makers'' typically receive a rebate and ``takers'' are assessed a
fee; the Exchange instead assesses lower transaction fees to ``makers''
as compared to ``takers,'' similar to the manner implemented at other
exchanges.\8\
---------------------------------------------------------------------------
\4\ The calculation of the volume thresholds does not include
QCC and cQCC Orders, PRIME and cPRIME AOC Responses, and unrelated
MIAX Market Maker quotes or unrelated MIAX Market Maker orders that
are received during the Response Time Interval and executed against
the PRIME Order (``PRIME Participating Quotes or Orders'') and
unrelated MIAX Market Maker complex quotes or unrelated MIAX Market
Maker complex orders that are received during the Response Time
Interval and executed against a cPRIME Order (``cPRIME Participating
Quote or Order'') (herein ``Excluded Contracts''). See Fee Schedule,
page 2.
\5\ See Securities Exchange Act Release No. 83515 (June 25,
2018), 83 FR 30786 (June 29, 2018) (SR-MIAX-2018-12).
\6\ See Securities Exchange Act Release No. 78519 (August 9,
2016), 81 FR 54162 (August 15, 2016) (SR-MIAX-2016-21).
\7\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
\8\ The Exchange notes that similar maker-taker pricing is
implemented at Nasdaq ISE, LLC (``ISE''). See Nasdaq ISE Fee
Schedule, Section I Regular Order Fees and Rebates.
---------------------------------------------------------------------------
Further, the Exchange provides certain discounted Market Maker
transaction fees for Members \9\ and their qualified Affiliates \10\
that achieve certain volume thresholds through the submission of
Priority Customer \11\ orders under the Exchange's Priority Customer
Rebate Program (``PCRP''),\12\ which is set forth on two tables: one
setting forth the transaction fees applicable to Members and their
Affiliates that are in PCRP Volume Tier 3 or higher; and the other
setting forth the transaction fees applicable to Members and their
Affiliates that are not in PCRP Volume Tier 3 or higher. The Sliding
Scale also includes Maker and Taker fees in both tables in each Tier
for simple orders in Penny classes and non-Penny classes where the fees
are discounted/differentiated between the tables.
---------------------------------------------------------------------------
\9\ 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.
\10\ For purposes of the MIAX Options Fee Schedule, the term
``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, (``Affiliate''), 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
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
Market Maker) that has been appointed by a MIAX Market Maker,
pursuant to the following process. A MIAX Market Maker appoints an
EEM and an EEM appoints a MIAX Market Maker, for the purposes of the
Fee Schedule, by each completing and sending an executed Volume
Aggregation Request Form by email to [email protected] no
later than 2 business days prior to the first business day of the
month in which the designation is to become effective. Transmittal
of a validly completed and executed form to the Exchange along with
the Exchange's acknowledgement of the effective designation to each
of the Market Maker and EEM will be viewed as acceptance of the
appointment. The Exchange will only recognize one designation per
Member. A Member may make a designation not more than once every 12
months (from the date of its most recent designation), which
designation shall remain in effect unless or until the Exchange
receives written notice submitted 2 business days prior to the first
business day of the month from either Member indicating that the
appointment has been terminated. Designations will become operative
on the first business day of the effective month and may not be
terminated prior to the end of the month. Execution data and reports
will be provided to both parties. See Fee Schedule, note 1.
\11\ The term ``Priority Customer'' means a person or entity
that (i) is not a broker or dealer in securities, and (ii) does not
place more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s). A
``Priority Customer Order'' means an order for the account of a
Priority Customer. See Exchange Rule 100.
\12\ Under the PCRP, MIAX Options credits each Member the per
contract amount resulting from each Priority Customer order
transmitted by that Member which is executed electronically on the
Exchange in all multiply-listed option classes (excluding, in simple
or complex as applicable, QCC and cQCC Orders, mini-options,
Priority Customer-to-Priority Customer Orders, C2C and cC2C Orders,
PRIME and cPRIME AOC Responses, PRIME and cPRIME Contra-side Orders,
PRIME and cPRIME Orders for which both the Agency and Contra-side
Order are Priority Customers, and executions related to contracts
that are routed to one or more exchanges in connection with the
Options Order Protection and Locked/Crossed Market Plan referenced
in Exchange Rule 1400), provided the Member meets certain percentage
thresholds in a month as described in the Priority Customer Rebate
Program table. See Fee Schedule, Section 1)a)iii.
---------------------------------------------------------------------------
The current Sliding Scale tables are as follows:
Members and Their Affiliates in Priority Customer Rebate Program Volume Tier 3 or Higher
--------------------------------------------------------------------------------------------------------------------------------------------------------
Simple Complex
----------------------------------------------------------------------------------------------
Per contract fee for Per contract fee for Per contract
penny classes non-penny classes surcharge for
------------------------------------------------ Per Per removing liquidity
Tier Percentage contract contract against a resting
thresholds fee for fee for priority customer
penny non-penny complex order on the
Maker Taker Maker Taker classes classes strategy book for
penny and non-penny
classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
All MIAX Market Makers....... 1 0.00-0.075...... $0.21 $0.23 $0.25 $0.30 $0.25 $0.29 $0.10
2 Above 0.075-0.60 0.15 0.22 0.19 0.27 0.19 0.23 0.10
3 Above 0.60-1.00. 0.08 0.19 0.12 0.23 0.12 0.16 0.10
4 Above 1.00-1.50. 0.04 0.18 0.08 0.22 0.07 0.11 0.10
5 Above 1.50...... 0.02 0.17 0.06 0.21 0.05 0.09 0.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Members and Their Affiliates not in Priority Customer Rebate Program Volume Tier 3 or Higher
--------------------------------------------------------------------------------------------------------------------------------------------------------
Simple Complex
----------------------------------------------------------------------------------------------
Per contract fee for Per contract fee for Per contract
penny classes non-penny classes surcharge for
------------------------------------------------ Per Per removing liquidity
Tier Percentage contract contract against a resting
thresholds fee for fee for priority customer
penny non-penny complex order on the
Maker Taker Maker Taker classes classes strategy book for
penny and non-penny
classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
All MIAX Market Makers....... 1 0.00-0.075...... $0.23 $0.25 $0.27 $0.32 $0.25 $0.29 $0.10
2 Above 0.075-0.60 0.17 0.24 0.21 0.29 0.19 0.23 0.10
3 Above 0.60-1.00. 0.10 0.21 0.14 0.25 0.12 0.16 0.10
4 Above 1.00-1.50. 0.06 0.20 0.10 0.24 0.07 0.11 0.10
[[Page 40585]]
5 Above 1.50...... 0.04 0.19 0.08 0.23 0.05 0.09 0.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
First, the Exchange proposes to modify the monthly volume
thresholds in the Market Maker Sliding Scale in both the table setting
forth the transaction fees applicable to Members and their Affiliates
that are in PCRP Volume Tier 3 or higher; and in the second table
setting forth the transaction fees applicable to Members and their
Affiliates that are not in PCRP Volume Tier 3 or higher. Specifically,
the Exchange proposes to adjust the percentage threshold of Tier 2 from
above 0.075% up to 0.60% of the total monthly volume executed by the
Member on MIAX Options, not including Excluded Contracts, divided by
the TAV, to become above 0.075% up to 0.70% of the total monthly volume
executed by the Member on MIAX Options, not including Excluded
Contracts, divided by the TAV. The Exchange proposes to adjust the
percentage threshold of Tier 3 from above 0.60% up to 1.00% of the
total monthly volume executed by the Member on MIAX Options, not
including Excluded Contracts, divided by the TAV, to become above 0.70%
up to 1.10% of the total monthly volume executed by the Member on MIAX,
not including Excluded Contracts, divided by the TAV. The Exchange
proposes to adjust the percentage threshold of Tier 4 from above 1.00%
up to 1.50% of the total monthly volume executed by the Member on MIAX
Options, not including Excluded Contracts, divided by the TAV, to
become above 1.10% up to 1.50% of the total monthly volume executed by
the Member on MIAX Options, not including Excluded Contracts, divided
by the TAV. The Exchange does not propose any adjustment to the
percentage thresholds of Tier 1 or Tier 5.
Second, the Exchange proposes to increase the Maker fees in the
Market Maker Sliding Scale, in Tiers 2, 3, 4 and 5 for Penny classes,
for Members and their Affiliates that are in PCRP Volume Tier 3 or
higher and also for Members and their Affiliates not in PCRP Volume
Tier 3 or higher. For options transactions in Penny classes by Members
and their Affiliates that are in PCRP Volume Tier 3 or higher, the
Exchange proposes to increase the Maker fee in Tier 2 from $0.15 to
$0.16, in Tier 3 from $0.08 to $0.10, in Tier 4 from $0.04 to $0.05 and
in Tier 5 from $0.02 to $0.03. For options transactions in Penny
classes by Members and their Affiliates that are not in PCRP Volume
Tier 3 or higher, the Exchange proposes to increase the Maker fee in
Tier 2 from $0.17 to $0.18, in Tier 3 from $0.10 to $0.12, in Tier 4
from $0.06 to $0.07 and in Tier 5 from $0.04 to $0.05.
With all proposed changes Section 1)a)i of the Fee Schedule shall
be the following:
Members and Their Affiliates in Priority Customer Rebate Program Volume Tier 3 or Higher
--------------------------------------------------------------------------------------------------------------------------------------------------------
Simple Complex
----------------------------------------------------------------------------------------------
Per contract fee for Per contract fee for Per contract
Percentage penny classes non-penny classes Per Per surcharge for trading
Tier thresholds ------------------------------------------------ contract contract against a priority
fee for fee for customer complex
Maker * Taker Maker * Taker penny non-penny order for penny and
classes classes non-penny classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
All MIAX Market Makers....... 1 0.00-0.075...... $0.21 $0.23 $0.25 $0.30 $0.25 $0.32 $0.12
2 Above 0.075-0.70 0.16 0.22 0.19 0.27 0.24 0.29 0.12
3 Above 0.70-1.10. 0.10 0.19 0.12 0.23 0.21 0.25 0.12
4 Above 1.10-1.50. 0.05 0.18 0.08 0.22 0.20 0.24 0.12
5 Above 1.50...... 0.03 0.17 0.06 0.21 0.19 0.23 0.12
--------------------------------------------------------------------------------------------------------------------------------------------------------
Members and Their Affiliates Not in Priority Customer Rebate Program Volume Tier 3 or Higher
--------------------------------------------------------------------------------------------------------------------------------------------------------
Simple Complex
----------------------------------------------------------------------------------------------
Per contract fee for Per contract fee for Per contract
Percentage penny classes non-penny classes Per Per surcharge for trading
Tier thresholds ------------------------------------------------ contract contract against a priority
fee for fee for customer complex
Maker * Taker Maker * Taker penny non-penny order for penny and
classes classes non-penny classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
All MIAX Market Makers....... 1 0.00-0.075...... 0.23 0.25 0.27 0.32 0.25 0.32 0.12
2 Above 0.075-0.70 0.18 0.24 0.21 0.29 0.24 0.29 0.12
3 Above 0.70-1.10. 0.12 0.21 0.14 0.25 0.21 0.25 0.12
4 Above 1.10-1.50. 0.07 0.20 0.10 0.24 0.20 0.24 0.12
5 Above 1.50...... 0.05 0.19 0.08 0.23 0.19 0.23 0.12
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 40586]]
The proposed rule change is scheduled to become operative August 1,
2018.
2. Statutory Basis
The Exchange believes that its proposal to amend its fee schedule
is consistent with Section 6(b) of the Act \13\ in general, and
furthers the objectives of Section 6(b)(4) of the Act,\14\ in that it
is an equitable allocation of reasonable dues, fees and other charges
among Exchange members and issuers and other persons using its
facilities. The Exchange also believes the proposal furthers the
objectives of Section 6(b)(5) of the Act,\15\ 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 and is not designed to permit
unfair discrimination between customer, issuers, brokers and dealers.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4).
\15\ 15 U.S.C. 78f (b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed changes to the Tier
percentage thresholds in the Market Maker Sliding Scale are consistent
with Section 6(b)(4) and 6(b)(5) of the Act in that they are fair,
equitable and not unfairly discriminatory because they apply equally to
all MIAX Options Market Makers. All MIAX Options Market Makers are
subject to the same fee schedule, and access to the Exchange is offered
on terms that are not unfairly discriminatory.
The Exchange believes that the proposed changes to the Tier
percentage thresholds in the Market Maker Sliding Scale are consistent
with Section 6(b)(5) of the Act in that they promote equitable access
to the Exchange for all market participants. To the extent that MIAX
Options Marker Maker volume is increased by the proposal, market
participants will increasingly compete for the opportunity to trade on
the Exchange including sending more orders and quotes to the Exchange.
The resulting increased volume and liquidity will benefit all Exchange
participants by providing more trading opportunities and tighter
spreads.
The specific percentage thresholds of the Tiers for Market Makers
as well as the fees are set based upon business determinations and an
analysis of current volume levels. The Exchange believes that the
proposed Maker fees are generally within the range of fees at other
exchanges that have a comparable pricing structure.\16\ The percentage
thresholds are intended to continue to incentivize MIAX Options Market
Makers to increase the number of orders and quotes they send to the
Exchange so that they can achieve the next threshold, and to encourage
all market participants to send more orders and quotes as well.
Increasing the number of orders and quotes sent to the Exchange will in
turn provide tighter and more liquid markets, and therefore attract
more business overall. Similarly, the different fees at the different
Tier levels are based on an analysis of current revenue and volume
levels and are intended to provide continued incentives to MIAX Options
Market Makers to increase the volume of orders and quotes sent to, and
contracts executed on, the Exchange. The specific volume thresholds of
the Tiers and rates are set in order to encourage MIAX Options Market
Makers to continue to reach for higher tiers.
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\16\ See NYSE American LLC (``NYSE American'') Fee Schedule, p.
11. The NYSE American Market Maker Sliding Scale Tier 1 percentage
threshold is from 0.00% to 0.20%, with a per contract non-take
volume fee of $0.25 and a per contract take volume fee of $0.25, the
Tier 2 percentage threshold is from greater than 0.20% to 0.65%,
with a per contract non-take volume fee of $0.22 and a per contract
take volume fee of $0.24, the Tier 3 percentage threshold is from
greater than 0.65% to 1.40%, with a per contract non-take volume fee
of $0.12 and a per contract take volume fee of $0.17, the Tier 4
percentage threshold is from greater than 1.40% to 2.00%, with a per
contract non-take volume fee of $0.09 and a per contract take volume
fee of $0.14, and the Tier 5 percentage threshold is greater than
2.020%, with a per contract non-take volume fee of $0.06 and a per
contract take volume fee of $0.09. See also Cboe Exchange, Inc.
(``CBOE'') Fees Schedule, p. 3. The CBOE Liquidity Provider Sliding
Scale Tier 1 percentage threshold is from 0.00% to 0.05%, with a
transaction fee per contract of $0.23, the Tier 2 percentage
threshold is from above 0.05% to 0.80%, with a transaction fee per
contract of $0.17, the Tier 3 percentage threshold is from above
0.80% to 1.50%, with a transaction fee per contract of $0.10, the
Tier 4 percentage threshold is from above 1.50% to 2.25%, with a
transaction fee per contract of $0.05, and the Tier 5 percentage
threshold is above 2.25%, with a transaction fee per contract of
$0.03.
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The proposed Maker fee increases in Penny Classes for simple orders
in the specified Tiers is reasonable, equitable and not unfairly
discriminatory because all similarly situated MIAX Options Market
Makers are subject to the same tiered fees and access to the Exchange
is offered on terms that are not unfairly discriminatory. For
competitive and business reasons, the Exchange has kept its Maker fees
for simple orders in Penny Classes lower than certain other options
exchanges that operate comparable pricing models.\17\ The Exchange now
believes that it is appropriate to increase those Maker fees so that
they are more in line with other exchanges, and will still remain
highly competitive such that they should enable the Exchange to
continue to attract order flow and grow market share. While
distinguished from the traditional ``maker-taker'' fee model under
which an exchange pays a per-contract rebate to their members to
encourage them to place resting liquidity by providing quotes and
orders (``maker'') on their trading systems and assessing a fee that
executes against a resting order (``taker''), the Exchange assesses a
reduced fee for ``makers'' as compared to ``takers'' rather than giving
the ``maker'' a rebate. Further, Exchange's proposal to assess a higher
Maker fee is reasonable, equitable and not unfairly discriminatory
because this would narrow the difference between the Maker and Taker
fees, which would in turn benefit the public and investors by
encouraging Market Makers to provide more order flow.
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\17\ Id.
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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
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed fee structure is
intended to promote narrower spreads and encourage the posting of
liquidity (instead of taking liquidity), and thus should promote better
prices. The Exchange believes that the proposed changes in the Tier
structure in the Market Maker Sliding Scale should continue to
encourage the provision of liquidity that enhances the quality of the
Exchange's markets and increases the number of trading opportunities on
MIAX Options for all participants who will be able to compete for such
opportunities. The proposed rule change should enable the Exchange to
continue to attract and compete for order flow with other exchanges.
However, this competition does not create an undue burden on
competition but rather offers all market participants the opportunity
to receive the benefit of competitive pricing.
The proposed Maker fee increases are intended to keep the
Exchange's fees highly competitive with those of other exchanges, and
to encourage liquidity and should enable the Exchange to continue to
attract and compete for order flow with other exchanges which offer
comparable Maker fees.
The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues if they
deem fee
[[Page 40587]]
levels at a particular venue to be excessive. In such an environment,
the Exchange must continually adjust its fees to remain competitive
with other exchanges and to attract order flow. The Exchange believes
that the proposed rule changes reflect this competitive environment
because they modify the Exchange's fees in a manner that encourages
market participants to provide liquidity and to send order flow to the
Exchange rather than remove liquidity from the market place.
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,\18\ and Rule 19b-4(f)(2) \19\ 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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\18\ 15 U.S.C. 78s(b)(3)(A)(ii).
\19\ 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 [email protected]. Please include
File Number SR-MIAX-2018-21 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-MIAX-2018-21. 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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-MIAX-2018-21, and should be submitted on
or before September 5, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-17493 Filed 8-14-18; 8:45 am]
BILLING CODE 8011-01-P
