Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX PEARL Fee Schedule, 52039-52042 [2018-22293]
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khammond on DSK30JT082PROD with NOTICES
Federal Register / Vol. 83, No. 199 / Monday, October 15, 2018 / Notices
protection of investors and the public
interest and hereby waives the 30-day
operative delay and designates the
proposal operative on October 1, 2018.87
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
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–MRX–2018–31, and should
be submitted on or before November 5,
2018.
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.88
Eduardo A. Aleman,
Assistant Secretary.
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–
MRX–2018–31 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
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–MRX–2018–31. 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,
87 For
purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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[FR Doc. 2018–22292 Filed 10–12–18; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–84383; File No. SR–
NYSEArca–2018–60]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Designation of a
Longer Period for Commission Action
on a Proposed Rule Change To List
and Trade Shares of the First Trust
Long Duration Opportunities ETF
Under NYSE Arca Rule 8.600–E
October 9, 2018.
On August 17, 2018, NYSE Arca, Inc.
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
list and trade shares of the First Trust
Long Duration Opportunities ETF
pursuant to NYSE Arca Rule 8.600–E.
The proposed rule change was
published for comment in the Federal
Register on August 30, 2018.3 The
Commission has received no comment
letters on the proposed rule change.
Section 19(b)(2) of the Act 4 provides
that within 45 days of the publication of
notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
88 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 83936
(August 24, 2018), 83 FR 44312.
4 15 U.S.C. 78s(b)(2).
reasons for so finding, or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day after
publication of the notice for this
proposed rule change is October 14,
2018. The Commission is extending this
45-day time period.
The Commission finds it appropriate
to designate a longer period within
which to take action on the proposed
rule change so that it has sufficient time
to consider the proposed rule change.
Accordingly, the Commission, pursuant
to Section 19(b)(2) of the Act,5
designates November 28, 2018 as the
date by which the Commission shall
either approve or disapprove, or
institute proceedings to determine
whether to disapprove, the proposed
rule change (File No.SR–NYSEArca–
2018–60).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–22296 Filed 10–12–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84387; File No. SR–
PEARL–2018–21]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the MIAX
PEARL Fee Schedule
October 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 September 28, 2018, 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.
1 15
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52039
5 Id.
6 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 83, No. 199 / Monday, October 15, 2018 / Notices
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 text of the proposed rule change
is available on the Exchange’s website 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
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’’ fee in
Tier 1 assessable to Priority Customers 3
orders for options in the symbol SPY.
The Exchange currently assesses
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.
Transaction rebates and fees in Section
(1)(a) of the Fee Schedule are currently
assessed for Priority Customer orders
according to the following table:
Per contract rebates/fees for penny classes
Origin/Tier
Volume criteria
Maker
Priority Customer:
1 .....................
2 .....................
3 .....................
4 .....................
5 .....................
6 .....................
0.00%–0.10% .......
Above 0.10%–
0.35%.
Above 0.35%–
0.50%.
Above 0.50%–
0.75%.
Above 0.75%–
1.25%.
Above 1.25% ........
Taker *
SPY taker
Per contract rebates/fees for
non-penny classes
QQQ, IWM,
VXX taker
Maker
Taker
($0.25)
(0.40)
$0.48
0.46
$0.44
0.43
$0.47
0.46
($0.85)
(0.95)
$0.87
0.86
(0.45)
0.44
0.42
0.44
(1.00)
0.85
(0.52)
0.44
0.41
0.43
(1.03)
0.84
(0.53)
0.44
0.40
0.42
(1.04)
0.84
(0.53)
0.43
0.38
0.40
(1.04)
0.84
khammond on DSK30JT082PROD with NOTICES
* For all Penny Classes other than SPY, QQQ, IWM, and VXX.
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 account(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
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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
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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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Federal Register / Vol. 83, No. 199 / Monday, October 15, 2018 / Notices
The Exchange currently charges Taker
fees for orders for options in the symbol
SPY corresponding to the Tiers and
volume thresholds which are applicable
to Priority Customer orders. The
Exchange currently charges a Taker fee
in Tier 1 of $0.44 for Priority Customer
orders for options in the symbol SPY.
The Exchange proposes to decrease
the Taker fee for Priority Customer
orders for options in the symbol SPY in
Tier 1 from $0.44 to $0.43. The purpose
of decreasing the Taker fee for Priority
Customer orders for options in the
symbol SPY to $0.43 in Tier 1 is for
business and competitive reasons to
encourage greater volume on the
Exchange of Priority Customer orders by
offering a lower rate in Tier 1. The
Exchange believes that reducing the
Taker fee for Priority Customer orders
for options in the symbol SPY to $0.43
per contract fee in Tier 1 will
incentivize Members to execute more
volume on the Exchange in Priority
Customer orders due to favorable
pricing for this liquidity type in Tier 1.
There are no other changes proposed to
the fee table.
The proposed change is scheduled to
become operative October 1, 2018.
market participants through increased
liquidity, tighter markets and order
interaction.
Furthermore, the proposed decrease
to the Taker fee for Priority Customer
orders for options in the symbol SPY in
Tier 1 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 fee will encourage Members to
send more Priority Customer orders to
the Exchange since they will be assessed
a reduced Taker fee in Tier 1. To the
extent that Priority Customer order flow
in the symbol SPY 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.
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
dues, fees and other charges among
Exchange members and issuers 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 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 decrease for
Priority Customer orders for options in
the symbol SPY in Tier 1 is reasonable,
equitable, and not unfairly
discriminatory, since it is intended to
incentivize order flow to be sent to the
Exchange for execution in an actively
traded options class. SPY options are
the most actively traded class. The
Exchange therefore believes that
incentivizing Members will benefit all
MIAX PEARL 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 Taker fee decrease is intended
to encourage execution of more volume
on the Exchange. The decrease in the
Taker fee for Priority Customer orders of
options in the symbol SPY should
enable the Exchange to attract and
compete for order flow with other
exchanges which assess higher Taker
fees in that symbol. Further, the
Exchange believes that the proposed
decrease in the Taker fee in Tier 1 for
Priority Customer orders for options in
the symbol SPY creates further
opportunities for bringing additional
liquidity to the market.
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 continue to provide
liquidity and to send order flow to the
Exchange.
10 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
12 15 U.S.C. 78f(b)(1) and (b)(5).
11 15
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
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52041
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,13 and Rule
19b–4(f)(2) 14 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–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–PEARL–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
13 15
14 17
E:\FR\FM\15OCN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
15OCN1
52042
Federal Register / Vol. 83, No. 199 / Monday, October 15, 2018 / Notices
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–PEARL–2018–21, and
should be submitted on or before
November 5, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–22293 Filed 10–12–18; 8:45 am]
BILLING CODE 8011–01–P
SOCIAL SECURITY ADMINISTRATION
[Docket No: SSA–2018–0055]
Agency Information Collection
Activities: Proposed Request and
Comment Request
The Social Security Administration
(SSA) publishes a list of information
collection packages requiring clearance
by the Office of Management and
Budget (OMB) in compliance with
Public Law 104–13, the Paperwork
Reduction Act of 1995, effective October
1, 1995. This notice includes an
extension and revisions of OMBapproved information collections.
SSA is soliciting comments on the
accuracy of the agency’s burden
estimate; the need for the information;
its practical utility; ways to enhance its
quality, utility, and clarity; and ways to
minimize burden on respondents,
including the use of automated
collection techniques or other forms of
information technology. Mail, email, or
fax your comments and
recommendations on the information
collection(s) to the OMB Desk Officer
and SSA Reports Clearance Officer at
the following addresses or fax numbers.
(OMB), Office of Management and
Budget, Attn: Desk Officer for SSA, Fax:
202–395–6974, Email address: OIRA_
Submission@omb.eop.gov.
(SSA), Social Security
Administration, OLCA, Attn: Reports
Clearance Director, 3100 West High
Rise, 6401 Security Blvd., Baltimore,
Number of
respondents
Modality of completion
SSA–3371 ........................................................................................................
2. Internet Request for Replacement of
Forms SSA–1099/SSA–1042S—20 CFR
401.45—0960–0583. Title II
beneficiaries use Forms SSA–1099 and
SSA–1042S, Social Security Benefit
Statement, to determine if their Social
Security benefits are taxable, and the
amount they need to report to the
Internal Revenue Service. In cases
where the original forms are unavailable
Number of
respondents
khammond on DSK30JT082PROD with NOTICES
Automated Telephone Requestors ..................................................................
N8NN ...............................................................................................................
Calls to local FOs ............................................................................................
Other (program service centers) ......................................................................
15 17
Frequency of
response
250,000
(e.g., lost, stolen, mutilated), an
individual may use SSA’s automated
telephone application to request a
replacement SSA–1099 and SSA–1042S.
SSA uses the information from the
automated telephone requests to verify
the identity of the requestor and to
provide replacement copies of the
forms. SSA accepts information in other
ways, however; The automated
Modality of completion
MD 21235, Fax: 410–966–2830, Email
address: OR.Reports.Clearance@ssa.gov.
Or you may submit your comments
online through www.regulations.gov,
referencing Docket ID Number [SSA–
2018–0055].
I. The information collections below
are pending at SSA. SSA will submit
them to OMB within 60 days from the
date of this notice. To be sure we
consider your comments, we must
receive them no later than December 14,
2018. Individuals can obtain copies of
the collection instruments by writing to
the above email address.
1. Pain Report Child—20 CFR
404.1512 and 416.912—0960–0540.
Before SSA can make a disability
determination for a child, we require
evidence from Supplemental Security
Income (SSI) applicants or claimants to
prove their disability. Form SSA–3371–
BK provides disability interviewers, and
SSI applicants or claimants in self-help
situations, with a convenient way to
record information about claimants’
pain or other symptoms. The State
disability determination services
adjudicators and administrative law
judges then use the information from
Form SSA–3371–BK to assess the effects
of symptoms on function for purposes of
determining disability under the Social
Security Act (Act). The respondents are
applicants for, or claimants of, SSI
payments.
Type of Request: Revision of an OMBapproved information collection.
1
21:34 Oct 12, 2018
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Estimated
total annual
burden
(hours)
15
62,500
telephone options reduce requests to the
National 800 Number Network (N8NN)
and visits to local Social Security field
offices (FO). The respondents are Title
II beneficiaries who wish to request a
replacement SSA–1099 or SSA–1042S
via telephone.
Type of Request: Revision of an OMBapproved information collection.
Frequency of
response
238,286
458,442
870,811
69,207
1
1
1
1
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
Average
burden per
response
(minutes)
E:\FR\FM\15OCN1.SGM
15OCN1
Average
burden per
response
(minutes)
Estimated
total annual
burden
(hours)
2
3
3
3
7,943
22,922
43,541
3,460
]]>Agencies
[Federal Register Volume 83, Number 199 (Monday, October 15, 2018)]
[Notices]
[Pages 52039-52042]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22293]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84387; File No. SR-PEARL-2018-21]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
PEARL Fee Schedule
October 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 September 28, 2018, 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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[[Page 52040]]
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 text of the proposed rule change is available on the Exchange's
website 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 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'' fee in Tier 1 assessable to Priority Customers \3\ orders for
options in the symbol SPY.
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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 account(s). See Exchange Rule
100, including Interpretations and Policies .01.
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The Exchange currently assesses 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. Transaction rebates and fees in Section (1)(a) of the Fee
Schedule are currently assessed for Priority Customer orders according
to the following table:
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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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Per contract rebates/fees for penny classes Per contract rebates/fees for
---------------------------------------------------------------- non-penny classes
Origin/Tier Volume criteria QQQ, IWM, VXX -------------------------------
Maker Taker * SPY taker taker Maker Taker
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Priority Customer:
1............................. 0.00%-0.10%......... ($0.25) $0.48 $0.44 $0.47 ($0.85) $0.87
2............................. Above 0.10%-0.35%... (0.40) 0.46 0.43 0.46 (0.95) 0.86
3............................. Above 0.35%-0.50%... (0.45) 0.44 0.42 0.44 (1.00) 0.85
4............................. Above 0.50%-0.75%... (0.52) 0.44 0.41 0.43 (1.03) 0.84
5............................. Above 0.75%-1.25%... (0.53) 0.44 0.40 0.42 (1.04) 0.84
6............................. Above 1.25%......... (0.53) 0.43 0.38 0.40 (1.04) 0.84
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* For all Penny Classes other than SPY, QQQ, IWM, and VXX.
[[Page 52041]]
The Exchange currently charges Taker fees for orders for options in
the symbol SPY corresponding to the Tiers and volume thresholds which
are applicable to Priority Customer orders. The Exchange currently
charges a Taker fee in Tier 1 of $0.44 for Priority Customer orders for
options in the symbol SPY.
The Exchange proposes to decrease the Taker fee for Priority
Customer orders for options in the symbol SPY in Tier 1 from $0.44 to
$0.43. The purpose of decreasing the Taker fee for Priority Customer
orders for options in the symbol SPY to $0.43 in Tier 1 is for business
and competitive reasons to encourage greater volume on the Exchange of
Priority Customer orders by offering a lower rate in Tier 1. The
Exchange believes that reducing the Taker fee for Priority Customer
orders for options in the symbol SPY to $0.43 per contract fee in Tier
1 will incentivize Members to execute more volume on the Exchange in
Priority Customer orders due to favorable pricing for this liquidity
type in Tier 1. There are no other changes proposed to the fee table.
The proposed change is scheduled to become operative October 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 \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 dues, fees and other charges
among Exchange members and issuers 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
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 decrease for Priority Customer orders for
options in the symbol SPY in Tier 1 is reasonable, equitable, and not
unfairly discriminatory, since it is intended to incentivize order flow
to be sent to the Exchange for execution in an actively traded options
class. SPY options are the most actively traded class. The Exchange
therefore believes that incentivizing Members will benefit all market
participants through increased liquidity, tighter markets and order
interaction.
Furthermore, the proposed decrease to the Taker fee for Priority
Customer orders for options in the symbol SPY in Tier 1 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 fee will encourage Members to send more Priority
Customer orders to the Exchange since they will be assessed a reduced
Taker fee in Tier 1. To the extent that Priority Customer order flow in
the symbol SPY 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 change 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 execution of more volume on the Exchange. The
decrease in the Taker fee for Priority Customer orders of options in
the symbol SPY should enable the Exchange to attract and compete for
order flow with other exchanges which assess higher Taker fees in that
symbol. Further, the Exchange believes that the proposed decrease in
the Taker fee in Tier 1 for Priority Customer orders for options in the
symbol SPY creates further opportunities for bringing additional
liquidity to the market.
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 continue to provide
liquidity and 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,\13\ and Rule 19b-4(f)(2) \14\ 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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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 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-PEARL-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-PEARL-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
[[Page 52042]]
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-PEARL-2018-21, and should be
submitted on or before November 5, 2018.
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\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-22293 Filed 10-12-18; 8:45 am]
BILLING CODE 8011-01-P
