Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 55658-55663 [2019-22599]
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Federal Register / Vol. 84, No. 201 / Thursday, October 17, 2019 / Notices
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
[Release No. 34–87277; File No. SR–
NYSEArca–2019–60]
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–
CBOE–2019–098 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–CBOE–2019–098. 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–CBOE–2019–098 and
should be submitted on or before
November 7, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22592 Filed 10–16–19; 8:45 am]
BILLING CODE 8011–01–P
16 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:26 Oct 16, 2019
SECURITIES AND EXCHANGE
COMMISSION
Jkt 250001
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Designation of a
Longer Period for Commission Action
on a Proposed Rule Change, as
Modified by Amendment No. 1 Thereto,
To List and Trade Shares of the KFA
Global Carbon ETF Under NYSE Arca
Rule 8.600–E
October 10, 2019.
to Section 19(b)(2) of the Act,6
designates November 27, 2019 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–
2019–60), as modified by Amendment
No. 1.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22595 Filed 10–16–19; 8:45 am]
On August 14, 2019, 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 KFA Global
Carbon ETF under NYSE Arca Rule
8.600–E. The proposed rule change was
published for comment in the Federal
Register on August 29, 2019.3 On
September 12, 2019, the Exchange filed
Amendment No. 1 to the proposed rule
change, which replaced and superseded
the proposed rule change as originally
filed.4 The Commission has received no
comment letters on the proposed rule
change.
Section 19(b)(2) of the Act 5 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
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 13,
2019. 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
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87282; File No. SR–MIAX–
2019–43]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Its Fee Schedule
October 10, 2019.
Pursuant to 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 October
1, 2019, Miami International Securities
Exchange LLC (‘‘MIAX Options’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the 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’’) to extend the
waiver period for certain nontransaction fees applicable to Market
Makers 3 that trade solely in Proprietary
Products 4 until December 31, 2019.
The text of the proposed rule change
is available on the Exchange’s website at
6 Id.
7 17
1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 86752
(Aug. 23, 2019), 84 FR 45557.
4 Amendment No. 1 is available on the
Commission’s website at: https://www.sec.gov/
comments/sr-nysearca-2019-60/srnysearca2019606117868-192147.pdf.
5 15 U.S.C. 78s(b)(2).
PO 00000
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Fmt 4703
Sfmt 4703
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 The term ‘‘Market Makers’’ refers to ‘‘Lead
Market Makers’’, ‘‘Primary Lead Market Makers’’
and ‘‘Registered Market Makers’’ collectively. See
Exchange Rule 100.
4 The term ‘‘Proprietary Product’’ means a class
of options that is listed exclusively on the
Exchange. See Exchange Rule 100.
1 15
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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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Background
On October 12, 2018, the Exchange
received approval from the Commission
to list and trade on the Exchange,
options on the SPIKES® Index, a new
index that measures expected 30-day
volatility of the SPDR S&P 500 ETF
Trust (commonly known and referred to
by its ticker symbol, ‘‘SPY’’).5 The
Exchange adopted its initial SPIKES
transaction fees on February 15, 2019.6
On May 31, 2019, the Exchange filed
a proposal with the Commission to
amend the Fee Schedule to waive
certain non-transaction fees applicable
to Market Makers that trade solely in
Proprietary Products (including options
on the SPIKES Index) until September
30, 2019.7 In particular, the Exchange
adopted waivers for Membership
Application fees, monthly Market Maker
Trading Permit fees, Application
Type of trading permit
Market Maker (includes RMM,
LMM, PLMM).
17:26 Oct 16, 2019
Proposal
The Exchange now proposes to extend
the waiver period for the same nontransaction fees applicable to Market
Makers that trade solely in Proprietary
Products (including options on SPIKES)
until December 31, 2019. In particular,
the Exchange proposes to waive
Membership Application fees, monthly
Market Maker Trading Permit fees,
Member API Testing and Certification
fees, and monthly MEI Port fees
assessed to Market Makers that trade
solely in Proprietary Products
(including options on SPIKES) until
December 31, 2019.
Membership Application Fees
The Exchange currently assesses
Membership fees for applications of
potential Members. The Exchange
assesses a one-time Membership
Application fee on the earlier of (i) the
date the applicant is certified in the
membership system, or (ii) once an
application for MIAX membership is
finally denied. The one-time application
fee is based upon the applicant’s status
as either a Market Maker or an
Electronic Exchange Member (‘‘EEM’’).8
A Market Maker is assessed a one-time
Membership Application fee of
$3,000.00.
The Exchange proposes that the
waiver for the one-time Membership
Application fee of $3,000.00 for Market
Makers that trade solely in Proprietary
Products (including options on SPIKES)
will be extended from September 30,
2019 until December 31, 2019, which
the Exchange proposes to state in the
Fee Schedule. The purpose of this
proposed change is to continue to
provide an incentive for potential
Market Makers to submit membership
applications, which should result in
increasing potential liquidity in
Proprietary Products, including options
on SPIKES. Even though the Exchange
is proposing to extend the waiver of this
particular fee for Market Makers who
will trade solely in Proprietary Products
from September 30, 2019 until
December 31, 2019, the overall structure
of the fee is outlined in the Fee
Schedule so that there is general
awareness that the Exchange intends to
assess such a fee after December 31,
2019.
Trading Permit Fees
The Exchange issues Trading Permits
that confer the ability to transact on the
Exchange. MIAX Trading Permits are
issued to Market Makers and EEMs.
Members receiving Trading Permits
during a particular calendar month are
assessed monthly Trading Permit fees as
set forth in the Fee Schedule. As it
relates to Market Makers, MIAX
currently assesses a monthly Trading
Permit fee in any month the Market
Maker is certified in the membership
system, is credentialed to use one or
more MIAX Express Interface Ports
(‘‘MEI Ports’’) 9 in the production
environment and is assigned to quote in
one or more classes. MIAX assesses its
Market Makers the monthly Market
Maker Trading Permit fee based on the
greatest number of classes listed on
MIAX that the MIAX Market Maker was
assigned to quote in on any given day
within a calendar month and the
applicable fee rate is the lesser of either
the per class basis or percentage of total
national average daily volume
measurements. A MIAX Market Maker
is assessed a monthly Trading Permit
Fee according to the following table:
Market Maker assignments
(the lesser of the applicable measurements below) W
Monthly MIAX
trading permit
fee
Per class
% of national average daily volume
$7,000.00
Up to 10 Classes ....................
Up to 20% of Classes by volume.
12,000.00
* 17,000.00
Up to 40 Classes ....................
Up to 100 Classes ..................
Up to 35% of Classes by volume.
Up to 50% of Classes by volume.
5 See Securities Exchange Act Release No. 84417
(October 12, 2018), 83 FR 52865 (October 18, 2018)
(SR–MIAX–2018–14) (Order Granting Approval of a
Proposed Rule Change by Miami International
Securities Exchange, LLC to List and Trade on the
Exchange Options on the SPIKES® Index).
6 See Securities Exchange Release No. 85283
(March 11, 2019), 84 FR 9567 (March 15, 2019) (SR–
MIAX–2019–11). The Exchange initially filed the
proposal on February 15, 2019 (SR–MIAX–2019–
VerDate Sep<11>2014
Programming Interface (‘‘API’’) Testing
and Certification fees for Members, and
monthly MEI Port fees assessed to
Market Makers that trade solely in
Proprietary Products (including options
on SPIKES) until September 30, 2019.
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55659
04). That filing was withdrawn and replaced with
(SR–MIAX–2019–11).
7 See Securities Exchange Act Release No. 86109
(June 14, 2019), 84 FR 28860 (June 20, 2019) (SR–
MIAX–2019–28).
8 The term ‘‘Electronic Exchange Member’’ or
‘‘EEM’’ means the holder of a Trading Permit who
is not a Market Maker. Electronic Exchange
Members are deemed ‘‘members’’ under the
Exchange Act. See Exchange Rule 100.
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9 Full Service MEI Ports provide Market Makers
with the ability to send Market Maker simple and
complex quotes, eQuotes, and quote purge messages
to the MIAX System. Full Service MEI Ports are also
capable of receiving administrative information.
Market Makers are limited to two Full Service MEI
Ports per matching engine. See Fee Schedule, note
27.
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Federal Register / Vol. 84, No. 201 / Thursday, October 17, 2019 / Notices
Type of trading permit
Market Maker assignments
(the lesser of the applicable measurements below) W
Monthly MIAX
trading permit
fee
* 22,000.00
Per class
% of national average daily volume
Over 100 Classes ...................
Over 50% of Classes by volume up to all Classes listed on
MIAX.
W Excludes Proprietary Products.
* For these Monthly MIAX Trading Permit Fee levels, if the Market Maker’s total monthly executed volume during the relevant month is less
than 0.060% of the total monthly executed volume reported by OCC in the market maker account type for MIAX-listed option classes for that
month, then the fee will be $15,500 instead of the fee otherwise applicable to such level.
MIAX proposes that the waiver for the
monthly Trading Permit fee for Market
Makers that trade solely in Proprietary
Products (including options on SPIKES)
will be extended from September 30,
2019 to December 31, 2019, which the
Exchange proposes to state in the Fee
Schedule. The purpose of this proposed
change is to continue to provide an
incentive for Market Makers to provide
liquidity in Proprietary Products on the
Exchange, which should result in
increasing potential order flow and
volume in Proprietary Products,
including options on SPIKES. Even
though the Exchange is proposing to
extend the waiver of this particular fee
for Market Makers trading solely in
Proprietary Products from September
30, 2019 until December 31, 2019, the
overall structure of the fee is outlined in
the Fee Schedule so that there is general
awareness by potential Members
seeking a Trading Permit on the
Exchange that the Exchange intends to
assess such a fee after December 31,
2019.
The Exchange also proposes that
Market Makers who trade Proprietary
Products (including options on SPIKES)
along with multi-listed classes will
continue to not have Proprietary
Products (including SPIKES) counted
toward those Market Makers’ class
assignment count or percentage of total
national average daily volume. This
exclusion is noted with the symbol ‘‘W’’
following the table that shows the
monthly Trading Permit Fees currently
assessed for Market Makers in Section
3)b) of the Fee Schedule.
API Testing and Certification Fee
The Exchange assesses an API Testing
and Certification fee to all Members
depending upon the type of Member.
An API makes it possible for Members’
software to communicate with MIAX
software applications, and is subject to
Members testing with, and certification
by, MIAX. The Exchange offers four
types of interfaces: (i) The Financial
Information Exchange Port (‘‘FIX
Port’’),10 which enables the FIX Port
10 A FIX Port is an interface with MIAX systems
that enables the Port user (typically an Electronic
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17:26 Oct 16, 2019
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user (typically an EEM or a Market
Maker) to submit simple and complex
orders electronically to MIAX; (ii) the
MEI Port, which enables Market Makers
to submit simple and complex
electronic quotes to MIAX; (iii) the
Clearing Trade Drop Port (‘‘CTD
Port’’),11 which provides real-time trade
clearing information to the participants
to a trade on MIAX and to the
participants’ respective clearing firms;
and (iv) the FIX Drop Copy Port (‘‘FXD
Port’’),12 which provides a copy of realtime trade execution, correction and
cancellation information through a FIX
Port to any number of FIX Ports
designated by an EEM to receive such
messages.
API Testing and Certification fees for
Market Makers are assessed (i) initially
per API for CTD and MEI in the month
the Market Maker has been credentialed
to use one or more ports in the
production environment for the tested
API and the Market Maker has been
assigned to quote in one or more classes,
and (ii) each time a Market Maker
initiates a change to its system that
Exchange Member or a Market Maker) to submit
simple and complex orders electronically to MIAX.
See Fee Schedule, note 24.
11 Clearing Trade Drop (‘‘CTD’’) provides
Exchange members with real-time clearing trade
updates. The updates include the Member’s
clearing trade messages on a low latency, real-time
basis. The trade messages are routed to a Member’s
connection containing certain information. The
information includes, among other things, the
following: (i) Trade date and time; (ii) symbol
information; (iii) trade price/size information; (iv)
Member type (for example, and without limitation,
Market Maker, Electronic Exchange Member,
Broker-Dealer); (v) Exchange Member Participant
Identifier (‘‘MPID’’) for each side of the transaction,
including Clearing Member MPID; and (vi) strategy
specific information for complex transactions. CTD
Port Fees will be assessed in any month the
Member is credentialed to use the CTD Port in the
production environment. See Fee Schedule, Section
5)d)iii.
12 The FIX Drop Copy Port (‘‘FXD’’) is a
messaging interface that will provide a copy of realtime trade execution, trade correction and trade
cancellation information for simple and complex
orders to FIX Drop Copy Port users who subscribe
to the service. FIX Drop Copy Port users are those
users who are designated by an EEM to receive the
information and the information is restricted for use
by the EEM only. FXD Port Fees will be assessed
in any month the Member is credentialed to use the
FXD Port in the production environment. See Fee
Schedule, Section 5)d)iv.
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Sfmt 4703
requires testing and certification. API
Testing and Certification fees will not be
assessed in situations where the
Exchange initiates a mandatory change
to the Exchange’s system that requires
testing and certification. The Exchange
currently assesses a Market Maker an
API Testing and Certification fee of
$2,500.00. The API Testing and
Certification fees represent costs
incurred by the Exchange as it works
with each Member for testing and
certifying that the Member’s software
systems communicate properly with
MIAX’s interfaces.
MIAX proposes to extend the waiver
of the API Testing and Certification fee
for Market Makers that trade solely in
Proprietary Products (including options
on SPIKES) from September 30, 2019
until December 31, 2019, which the
Exchange proposes to state in the Fee
Schedule. The purpose of this proposed
change is to continue to provide an
incentive for potential Market Makers to
develop software applications to trade
in Proprietary Products, including
options on SPIKES. Even though the
Exchange is proposing to extend the
waiver of this particular fee for Market
Makers who trade solely in Proprietary
Products from September 30, 2019 until
December 31, 2019, the overall structure
of the fee is outlined in the Fee
Schedule so that there is general
awareness that the Exchange intends to
assess such a fee after December 31,
2019.
MEI Port Fees
MIAX provides four (4) Port types,
including (i) the FIX Port, which
enables the FIX Port user (typically an
EEM or a Market Maker) to submit
simple and complex orders
electronically to MIAX; (ii) the MEI
Port, which enables Market Makers to
submit simple and complex electronic
quotes to MIAX; (iii) the CTD Port,
which provides real-time trade clearing
information to the participants to a trade
on MIAX and to the participants’
respective clearing firms; and (iv) the
FXD Port, which provides a copy of
real-time trade execution, correction
and cancellation information through a
FIX Port to any number of FIX Ports
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Federal Register / Vol. 84, No. 201 / Thursday, October 17, 2019 / Notices
designated by an EEM to receive such
messages.
MIAX assesses monthly MEI Port Fees
to Market Makers in each month the
Member has been credentialed to use
the MEI Port in the production
environment and has been assigned to
quote in at least one class. The amount
of the monthly MEI Port Fee is based
upon the number of classes in which the
Market Maker was assigned to quote on
any given day within the calendar
month, and upon the class volume
percentages set forth in the above table.
The class volume percentage is based on
the total national average daily volume
in classes listed on MIAX in the prior
calendar quarter. Newly listed option
classes are excluded from the
calculation of the monthly MEI Port Fee
until the calendar quarter following
their listing, at which time the newly
listed option classes will be included in
both the per class count and the
percentage of total national average
daily volume. The Exchange assesses
55661
MIAX Market Makers the monthly MEI
Port Fee based on the greatest number
of classes listed on MIAX that the MIAX
Market Maker was assigned to quote in
on any given day within a calendar
month and the applicable fee rate that
is the lesser of either the per class basis
or percentage of total national average
daily volume measurement. MIAX
assesses MEI Port Fees on Market
Makers according to the following table:
Market Maker assignments
(the lesser of the applicable measurements below) W
Monthly MIAX MEI fees
Per class
$5,000.00 ........................................
$10,000.00 ......................................
$14,000.00 ......................................
$17,500.00 * ....................................
$20,500.00 * ....................................
% of national average daily volume
Up to 5 Classes .............................
Up to 10 Classes ...........................
Up to 40 Classes ...........................
Up to 100 Classes .........................
Over 100 Classes ..........................
Up to 10% of Classes by volume.
Up to 20% of Classes by volume.
Up to 35% of Classes by volume.
Up to 50% of Classes by volume.
Over 50% of Classes by volume up to all Classes listed on MIAX.
W Excludes Proprietary Products.
* For these Monthly MIAX MEI Fees levels, if the Market Maker’s total monthly executed volume during the relevant month is less than 0.060%
of the total monthly executed volume reported by OCC in the market maker account type for MIAX-listed option classes for that month, then the
fee will be $14,500 instead of the fee otherwise applicable to such level.
MIAX proposes to extend the waiver
of the monthly MEI Port Fee for Market
Makers that trade solely in Proprietary
Products (including options on SPIKES)
from September 30, 2019 until
December 31, 2019, which the Exchange
proposes to state in the Fee Schedule.
The purpose of this proposal is to
continue to provide an incentive to
Market Makers to connect to MIAX
through the MEI Port such that they will
be able to trade in MIAX Proprietary
Products. Even though the Exchange is
proposing to extend the waiver of this
particular fee for Market Makers trading
solely in Proprietary Products until
September 30, 2019, the overall
structure of the fee is outlined in the Fee
Schedule so that there is general
awareness that the Exchange intends to
assess such a fee after December 31,
2019.
The Exchange notes that for the
purposes of this proposed change, other
Market Makers who trade MIAX
Proprietary Products (including options
on SPIKES) along with multi-listed
classes will continue to not have
Proprietary Products (including SPIKES)
counted toward those Market Makers’
class assignment count or percentage of
total national average daily volume.
This exclusion is noted by the symbol
‘‘W’’ following the table that shows the
monthly MEI Port Fees currently
assessed for Market Makers in Section
5)d)ii) of the Fee Schedule.
The proposed extension of the fee
waivers are targeted at market
participants, particularly market
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17:26 Oct 16, 2019
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makers, who are not currently members
of MIAX, who may be interested in
being a Market Maker in Proprietary
Products on the Exchange. The
Exchange estimates that there are fewer
than ten (10) such market participants
that could benefit from the extension of
these fee waivers. The proposed
extension of the fee waivers does not
apply differently to different sizes of
market participants, however the fee
waivers do only apply to Market Makers
(and not EEMs).
Market Makers, unlike other market
participants, take on a number of
obligations, including quoting
obligations that other market
participants do not have. Further,
Market Makers have added market
making and regulatory requirements,
which normally do not apply to other
market participants. For example,
Market Makers have obligations to
maintain continuous markets, engage in
a course of dealings reasonably
calculated to contribute to the
maintenance of a fair and orderly
market, and to not make bids or offers
or enter into transactions that are
inconsistent with a course of dealing.
Accordingly, the Exchange believes it is
reasonable and not unfairly
discriminatory to continue to offer the
fee waivers to Market Makers because
the Exchange is seeking additional
liquidity providers for Proprietary
Products, in order to enhance liquidity
and spreads in Proprietary Products,
which is traditionally provided by
Market Makers, as opposed to EEMs.
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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
particular, in that it is an equitable
allocation of reasonable fees and other
charges among its 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 in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest and is
not designed to permit unfair
discrimination between customers,
issuers, brokers and dealers.
The Exchange believes that the
proposal to extend the fee waiver period
for certain non-transaction fees for
Market Makers in Proprietary Products
is an equitable allocation of reasonable
fees because the proposal continues to
waive non-transaction fees for a limited
period of time in order to enable the
Exchange to improve its overall
competitiveness and strengthen its
market quality for all market
participants in MIAX’s Proprietary
Products, including options on SPIKES.
The Exchange believe the proposed
extension of the fee waivers is fair and
13 15
14 15
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U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
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Federal Register / Vol. 84, No. 201 / Thursday, October 17, 2019 / Notices
equitable and not unreasonably
discriminatory because it applies to all
market participants not currently
registered as Market Makers at the
Exchange. Any market participant may
choose to satisfy the additional
requirements and obligations of being a
Market Maker and trade solely in
Proprietary Products in order to qualify
for the fee waivers.
The Exchange believes that the
proposed extension of the fee waivers is
equitable and not unfairly
discriminatory for Market Makers as
compared to EEMs because Market
Makers, unlike other market
participants, take on a number of
obligations, including quoting
obligations that other market
participants do not have. Further,
Market Makers have added market
making and regulatory requirements,
which normally do not apply to other
market participants. For example,
Market Makers have obligations to
maintain continuous markets, engage in
a course of dealings reasonably
calculated to contribute to the
maintenance of a fair and orderly
market, and to not make bids or offers
or enter into transactions that are
inconsistent with a course of dealing.
The Exchange believes it is reasonable
and equitable to continue to waive the
one-time Membership Application Fee,
monthly Trading Permit Fee, API
Testing and Certification Fee, and
monthly MEI Port Fee for Market
Makers that trade solely in Proprietary
Products (including options on SPIKES)
until December 31, 2019, since the
waiver of such fees provides incentives
to interested market participants to
trade in Proprietary Products. This
should result in increasing potential
order flow and liquidity in MIAX
Proprietary Products, including options
on SPIKES.
The Exchange believes it is reasonable
and equitable to continue to waive the
API Testing and Certification fee
assessable to Market Makers that trade
solely in Proprietary Products
(including options on SPIKES) until
December 31, 2019, since the waiver of
such fees provides incentives to
interested Members to develop and test
their APIs sooner. Determining system
operability with the Exchange’s system
will in turn provide MIAX with
potential order flow and liquidity
providers in Proprietary Products.
The Exchange believes it is
reasonable, equitable and not unfairly
discriminatory that Market Makers who
trade in Proprietary Products along with
multi-listed classes will continue to not
have Proprietary Products counted
toward those Market Makers’ class
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assignment count or percentage of total
national average daily volume for
monthly Trading Permit Fees and
monthly MEI Port Fees in order to
incentivize existing Market Makers who
currently trade in multi-listed classes to
also trade in Proprietary Products,
without incurring certain additional
fees.
The Exchange believes that the
proposed extension of the fee waivers
constitutes an equitable allocation of
reasonable fees and other charges among
its members and issuers and other
persons using its facilities. The
proposed extension of the fee waivers
means that all prospective market
makers that wish to become Market
Maker Members of the Exchange and
quote solely in Proprietary Products
may do so and have the abovementioned fees waived until December
31, 2019. The proposed extension of the
fee waivers will continue to not apply
to potential EEMs because the Exchange
is seeking to enhance the quality of its
markets in Proprietary Products through
introducing more competition among
Market Makers in Proprietary Products.
In order to increase the competition, the
Exchange believes that it must continue
to waive entry type fees for such Market
Makers. EEMs do not provide the
benefit of enhanced liquidity which is
provided by Market Makers, therefore
the Exchange believes it is reasonable
and not unfairly discriminatory to
continue to only offer the proposed fee
waivers to Market Makers (and not
EEMs). Further, the Exchange believes it
is reasonable and not unfairly
discriminatory to continue to exclude
Proprietary Products from an existing
Market Maker’s permit fees and port
fees, in order to incentive such Market
Makers to quote in Proprietary Products.
The amount of a Market Maker’s permit
and port fee is determined by the
number of classes quoted and volume of
the Market Maker. By excluding
Proprietary Products from such fees, the
Exchange is able to incentivize Market
Makers to quote in Proprietary Products.
EEMs do not pay permit and port fees
based on the classes traded or volume,
so the Exchange believes it is
reasonable, equitable, and not unfairly
discriminatory to only offer the
exclusion to Market Makers (and not
EEMs).
Intra-Market Competition
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Written comments were neither
solicited nor received.
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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
PO 00000
Frm 00123
Fmt 4703
Sfmt 4703
The Exchange believes that the
proposal to extend certain of the nontransaction fee waivers until December
31, 2019 for Market Makers in
Proprietary Products would increase
intra-market competition by
incentivizing new potential Market
Makers to quote in Proprietary Products,
which will enhance the quality of
quoting and increase the volume of
contracts in Proprietary Products traded
on MIAX. To the extent that this
purpose is achieved, all the Exchange’s
market participants should benefit from
the improved market liquidity for the
Exchange’s Proprietary Products.
Enhanced market quality and increased
transaction volume in Proprietary
Products that results from the
anticipated increase in Market Maker
activity on the Exchange will benefit all
market participants and improve
competition on the Exchange.
The Exchange does not believe that
the proposed rule change will impose
any burden on intra-market competition
that is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed changes for each
separate type of market participant (new
Market Makers and existing Market
Makers) will be assessed equally to all
such market participants. While
different fees are assessed to different
market participants in some
circumstances, these different market
participants have different obligations
and different circumstances as
discussed above. For example, Market
Makers have quoting obligations that
other market participants (such as
EEMs) do not have.
Inter-Market Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on inter-market competition
that is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed extension of the
fee waivers apply only to the Exchange’s
Proprietary Products (including options
on SPIKES), which are traded
exclusively on the Exchange.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The foregoing rule change has become
effective pursuant to Section
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17OCN1
Federal Register / Vol. 84, No. 201 / Thursday, October 17, 2019 / Notices
19(b)(3)(A)(ii) of the Act,15 and Rule
19b–4(f)(2) 16 thereunder. At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
MIAX–2019–43 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–2019–43. 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
offices 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–2019–43, and
should be submitted on or before
November 7, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22599 Filed 10–16–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87272; File No. SR–CBOE–
2019–090]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Move the
Rules in Chapter V of the Currently
Effective Rulebook to Proposed
Section A of Chapter 4 of the Shell
Structure for the Exchange’s Rulebook
That Will Become Effective Upon the
Migration of the Exchange’s Trading
Platform
October 10, 2019.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
3, 2019, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
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
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to move
the Rules in Chapter V of the currently
effective Rulebook (‘‘current
Rulebook’’), which governs securities
dealt in on the Exchange, to proposed
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
15 15
U.S.C. 78s(b)(3)(A)(ii).
16 17 CFR 240.19b–4(f)(2).
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1 15
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Fmt 4703
Sfmt 4703
55663
Section A of Chapter 4 of the shell
structure for the Exchange’s Rulebook
that will become effective upon the
migration of the Exchange’s trading
platform to the same system used by the
Cboe Affiliated Exchanges (as defined
below) (‘‘shell Rulebook’’). The text of
the proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/
AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
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
In 2016, the Exchange’s parent
company, Cboe Global Markets, Inc.
(formerly named CBOE Holdings, Inc.)
(‘‘Cboe Global’’), which is also the
parent company of Cboe C2 Exchange,
Inc. (‘‘C2’’), acquired Cboe EDGA
Exchange, Inc. (‘‘EDGA’’), Cboe EDGX
Exchange, Inc. (‘‘EDGX’’ or ‘‘EDGX
Options’’), Cboe BZX Exchange, Inc.
(‘‘BZX’’ or ‘‘BZX Options’’), and Cboe
BYX Exchange, Inc. (‘‘BYX’’ and,
together with Cboe Options, C2, EDGX,
EDGA, and BZX, the ‘‘Cboe Affiliated
Exchanges’’). The Cboe Affiliated
Exchanges are working to align certain
system functionality, retaining only
intended differences, between the Cboe
Affiliated Exchanges, in the context of a
technology migration. Cboe Options
intends to migrate its trading platform to
the same system used by the Cboe
Affiliated Exchanges, which the
Exchange expects to complete on
October 7, 2019. In connection with this
technology migration, the Exchange has
a shell Rulebook that resides alongside
its current Rulebook, which shell
Rulebook will contain the Rules that
E:\FR\FM\17OCN1.SGM
17OCN1
]]>Agencies
[Federal Register Volume 84, Number 201 (Thursday, October 17, 2019)]
[Notices]
[Pages 55658-55663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22599]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87282; File No. SR-MIAX-2019-43]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule
October 10, 2019.
Pursuant to 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 October 1, 2019, Miami International Securities Exchange LLC (``MIAX
Options'' or ``Exchange'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the 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'') to extend the waiver period for certain
non-transaction fees applicable to Market Makers \3\ that trade solely
in Proprietary Products \4\ until December 31, 2019.
---------------------------------------------------------------------------
\3\ The term ``Market Makers'' refers to ``Lead Market Makers'',
``Primary Lead Market Makers'' and ``Registered Market Makers''
collectively. See Exchange Rule 100.
\4\ The term ``Proprietary Product'' means a class of options
that is listed exclusively on the Exchange. See Exchange Rule 100.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
website at
[[Page 55659]]
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
Background
On October 12, 2018, the Exchange received approval from the
Commission to list and trade on the Exchange, options on the
SPIKES[supreg] Index, a new index that measures expected 30-day
volatility of the SPDR S&P 500 ETF Trust (commonly known and referred
to by its ticker symbol, ``SPY'').\5\ The Exchange adopted its initial
SPIKES transaction fees on February 15, 2019.\6\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 84417 (October 12,
2018), 83 FR 52865 (October 18, 2018) (SR-MIAX-2018-14) (Order
Granting Approval of a Proposed Rule Change by Miami International
Securities Exchange, LLC to List and Trade on the Exchange Options
on the SPIKES[supreg] Index).
\6\ See Securities Exchange Release No. 85283 (March 11, 2019),
84 FR 9567 (March 15, 2019) (SR-MIAX-2019-11). The Exchange
initially filed the proposal on February 15, 2019 (SR-MIAX-2019-04).
That filing was withdrawn and replaced with (SR-MIAX-2019-11).
---------------------------------------------------------------------------
On May 31, 2019, the Exchange filed a proposal with the Commission
to amend the Fee Schedule to waive certain non-transaction fees
applicable to Market Makers that trade solely in Proprietary Products
(including options on the SPIKES Index) until September 30, 2019.\7\ In
particular, the Exchange adopted waivers for Membership Application
fees, monthly Market Maker Trading Permit fees, Application Programming
Interface (``API'') Testing and Certification fees for Members, and
monthly MEI Port fees assessed to Market Makers that trade solely in
Proprietary Products (including options on SPIKES) until September 30,
2019.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 86109 (June 14,
2019), 84 FR 28860 (June 20, 2019) (SR-MIAX-2019-28).
---------------------------------------------------------------------------
Proposal
The Exchange now proposes to extend the waiver period for the same
non-transaction fees applicable to Market Makers that trade solely in
Proprietary Products (including options on SPIKES) until December 31,
2019. In particular, the Exchange proposes to waive Membership
Application fees, monthly Market Maker Trading Permit fees, Member API
Testing and Certification fees, and monthly MEI Port fees assessed to
Market Makers that trade solely in Proprietary Products (including
options on SPIKES) until December 31, 2019.
Membership Application Fees
The Exchange currently assesses Membership fees for applications of
potential Members. The Exchange assesses a one-time Membership
Application fee on the earlier of (i) the date the applicant is
certified in the membership system, or (ii) once an application for
MIAX membership is finally denied. The one-time application fee is
based upon the applicant's status as either a Market Maker or an
Electronic Exchange Member (``EEM'').\8\ A Market Maker is assessed a
one-time Membership Application fee of $3,000.00.
---------------------------------------------------------------------------
\8\ The term ``Electronic Exchange Member'' or ``EEM'' means the
holder of a Trading Permit who is not a Market Maker. Electronic
Exchange Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
---------------------------------------------------------------------------
The Exchange proposes that the waiver for the one-time Membership
Application fee of $3,000.00 for Market Makers that trade solely in
Proprietary Products (including options on SPIKES) will be extended
from September 30, 2019 until December 31, 2019, which the Exchange
proposes to state in the Fee Schedule. The purpose of this proposed
change is to continue to provide an incentive for potential Market
Makers to submit membership applications, which should result in
increasing potential liquidity in Proprietary Products, including
options on SPIKES. Even though the Exchange is proposing to extend the
waiver of this particular fee for Market Makers who will trade solely
in Proprietary Products from September 30, 2019 until December 31,
2019, the overall structure of the fee is outlined in the Fee Schedule
so that there is general awareness that the Exchange intends to assess
such a fee after December 31, 2019.
Trading Permit Fees
The Exchange issues Trading Permits that confer the ability to
transact on the Exchange. MIAX Trading Permits are issued to Market
Makers and EEMs. Members receiving Trading Permits during a particular
calendar month are assessed monthly Trading Permit fees as set forth in
the Fee Schedule. As it relates to Market Makers, MIAX currently
assesses a monthly Trading Permit fee in any month the Market Maker is
certified in the membership system, is credentialed to use one or more
MIAX Express Interface Ports (``MEI Ports'') \9\ in the production
environment and is assigned to quote in one or more classes. MIAX
assesses its Market Makers the monthly Market Maker Trading Permit fee
based on the greatest number of classes listed on MIAX that the MIAX
Market Maker was assigned to quote in on any given day within a
calendar month and the applicable fee rate is the lesser of either the
per class basis or percentage of total national average daily volume
measurements. A MIAX Market Maker is assessed a monthly Trading Permit
Fee according to the following table:
---------------------------------------------------------------------------
\9\ Full Service MEI Ports provide Market Makers with the
ability to send Market Maker simple and complex quotes, eQuotes, and
quote purge messages to the MIAX System. Full Service MEI Ports are
also capable of receiving administrative information. Market Makers
are limited to two Full Service MEI Ports per matching engine. See
Fee Schedule, note 27.
----------------------------------------------------------------------------------------------------------------
Market Maker assignments (the lesser of the applicable
Monthly MIAX measurements below) [Omega]
Type of trading permit trading permit -------------------------------------------------------
fee % of national average
Per class daily volume
----------------------------------------------------------------------------------------------------------------
Market Maker (includes RMM, LMM, PLMM).. $7,000.00 Up to 10 Classes.......... Up to 20% of Classes by
volume.
12,000.00 Up to 40 Classes.......... Up to 35% of Classes by
volume.
* 17,000.00 Up to 100 Classes......... Up to 50% of Classes by
volume.
[[Page 55660]]
* 22,000.00 Over 100 Classes.......... Over 50% of Classes by
volume up to all Classes
listed on MIAX.
----------------------------------------------------------------------------------------------------------------
[Omega] Excludes Proprietary Products.
* For these Monthly MIAX Trading Permit Fee levels, if the Market Maker's total monthly executed volume during
the relevant month is less than 0.060% of the total monthly executed volume reported by OCC in the market
maker account type for MIAX-listed option classes for that month, then the fee will be $15,500 instead of the
fee otherwise applicable to such level.
MIAX proposes that the waiver for the monthly Trading Permit fee
for Market Makers that trade solely in Proprietary Products (including
options on SPIKES) will be extended from September 30, 2019 to December
31, 2019, which the Exchange proposes to state in the Fee Schedule. The
purpose of this proposed change is to continue to provide an incentive
for Market Makers to provide liquidity in Proprietary Products on the
Exchange, which should result in increasing potential order flow and
volume in Proprietary Products, including options on SPIKES. Even
though the Exchange is proposing to extend the waiver of this
particular fee for Market Makers trading solely in Proprietary Products
from September 30, 2019 until December 31, 2019, the overall structure
of the fee is outlined in the Fee Schedule so that there is general
awareness by potential Members seeking a Trading Permit on the Exchange
that the Exchange intends to assess such a fee after December 31, 2019.
The Exchange also proposes that Market Makers who trade Proprietary
Products (including options on SPIKES) along with multi-listed classes
will continue to not have Proprietary Products (including SPIKES)
counted toward those Market Makers' class assignment count or
percentage of total national average daily volume. This exclusion is
noted with the symbol ``[Omega]'' following the table that shows the
monthly Trading Permit Fees currently assessed for Market Makers in
Section 3)b) of the Fee Schedule.
API Testing and Certification Fee
The Exchange assesses an API Testing and Certification fee to all
Members depending upon the type of Member. An API makes it possible for
Members' software to communicate with MIAX software applications, and
is subject to Members testing with, and certification by, MIAX. The
Exchange offers four types of interfaces: (i) The Financial Information
Exchange Port (``FIX Port''),\10\ which enables the FIX Port user
(typically an EEM or a Market Maker) to submit simple and complex
orders electronically to MIAX; (ii) the MEI Port, which enables Market
Makers to submit simple and complex electronic quotes to MIAX; (iii)
the Clearing Trade Drop Port (``CTD Port''),\11\ which provides real-
time trade clearing information to the participants to a trade on MIAX
and to the participants' respective clearing firms; and (iv) the FIX
Drop Copy Port (``FXD Port''),\12\ which provides a copy of real-time
trade execution, correction and cancellation information through a FIX
Port to any number of FIX Ports designated by an EEM to receive such
messages.
---------------------------------------------------------------------------
\10\ A FIX Port is an interface with MIAX systems that enables
the Port user (typically an Electronic Exchange Member or a Market
Maker) to submit simple and complex orders electronically to MIAX.
See Fee Schedule, note 24.
\11\ Clearing Trade Drop (``CTD'') provides Exchange members
with real-time clearing trade updates. The updates include the
Member's clearing trade messages on a low latency, real-time basis.
The trade messages are routed to a Member's connection containing
certain information. The information includes, among other things,
the following: (i) Trade date and time; (ii) symbol information;
(iii) trade price/size information; (iv) Member type (for example,
and without limitation, Market Maker, Electronic Exchange Member,
Broker-Dealer); (v) Exchange Member Participant Identifier
(``MPID'') for each side of the transaction, including Clearing
Member MPID; and (vi) strategy specific information for complex
transactions. CTD Port Fees will be assessed in any month the Member
is credentialed to use the CTD Port in the production environment.
See Fee Schedule, Section 5)d)iii.
\12\ The FIX Drop Copy Port (``FXD'') is a messaging interface
that will provide a copy of real-time trade execution, trade
correction and trade cancellation information for simple and complex
orders to FIX Drop Copy Port users who subscribe to the service. FIX
Drop Copy Port users are those users who are designated by an EEM to
receive the information and the information is restricted for use by
the EEM only. FXD Port Fees will be assessed in any month the Member
is credentialed to use the FXD Port in the production environment.
See Fee Schedule, Section 5)d)iv.
---------------------------------------------------------------------------
API Testing and Certification fees for Market Makers are assessed
(i) initially per API for CTD and MEI in the month the Market Maker has
been credentialed to use one or more ports in the production
environment for the tested API and the Market Maker has been assigned
to quote in one or more classes, and (ii) each time a Market Maker
initiates a change to its system that requires testing and
certification. API Testing and Certification fees will not be assessed
in situations where the Exchange initiates a mandatory change to the
Exchange's system that requires testing and certification. The Exchange
currently assesses a Market Maker an API Testing and Certification fee
of $2,500.00. The API Testing and Certification fees represent costs
incurred by the Exchange as it works with each Member for testing and
certifying that the Member's software systems communicate properly with
MIAX's interfaces.
MIAX proposes to extend the waiver of the API Testing and
Certification fee for Market Makers that trade solely in Proprietary
Products (including options on SPIKES) from September 30, 2019 until
December 31, 2019, which the Exchange proposes to state in the Fee
Schedule. The purpose of this proposed change is to continue to provide
an incentive for potential Market Makers to develop software
applications to trade in Proprietary Products, including options on
SPIKES. Even though the Exchange is proposing to extend the waiver of
this particular fee for Market Makers who trade solely in Proprietary
Products from September 30, 2019 until December 31, 2019, the overall
structure of the fee is outlined in the Fee Schedule so that there is
general awareness that the Exchange intends to assess such a fee after
December 31, 2019.
MEI Port Fees
MIAX provides four (4) Port types, including (i) the FIX Port,
which enables the FIX Port user (typically an EEM or a Market Maker) to
submit simple and complex orders electronically to MIAX; (ii) the MEI
Port, which enables Market Makers to submit simple and complex
electronic quotes to MIAX; (iii) the CTD Port, which provides real-time
trade clearing information to the participants to a trade on MIAX and
to the participants' respective clearing firms; and (iv) the FXD Port,
which provides a copy of real-time trade execution, correction and
cancellation information through a FIX Port to any number of FIX Ports
[[Page 55661]]
designated by an EEM to receive such messages.
MIAX assesses monthly MEI Port Fees to Market Makers in each month
the Member has been credentialed to use the MEI Port in the production
environment and has been assigned to quote in at least one class. The
amount of the monthly MEI Port Fee is based upon the number of classes
in which the Market Maker was assigned to quote on any given day within
the calendar month, and upon the class volume percentages set forth in
the above table. The class volume percentage is based on the total
national average daily volume in classes listed on MIAX in the prior
calendar quarter. Newly listed option classes are excluded from the
calculation of the monthly MEI Port Fee until the calendar quarter
following their listing, at which time the newly listed option classes
will be included in both the per class count and the percentage of
total national average daily volume. The Exchange assesses MIAX Market
Makers the monthly MEI Port Fee based on the greatest number of classes
listed on MIAX that the MIAX Market Maker was assigned to quote in on
any given day within a calendar month and the applicable fee rate that
is the lesser of either the per class basis or percentage of total
national average daily volume measurement. MIAX assesses MEI Port Fees
on Market Makers according to the following table:
------------------------------------------------------------------------
Market Maker assignments (the lesser of
the applicable measurements below)
[Omega]
Monthly MIAX MEI fees -----------------------------------------
% of national average
Per class daily volume
------------------------------------------------------------------------
$5,000.00..................... Up to 5 Classes.. Up to 10% of Classes
by volume.
$10,000.00.................... Up to 10 Classes. Up to 20% of Classes
by volume.
$14,000.00.................... Up to 40 Classes. Up to 35% of Classes
by volume.
$17,500.00 *.................. Up to 100 Classes Up to 50% of Classes
by volume.
$20,500.00 *.................. Over 100 Classes. Over 50% of Classes
by volume up to all
Classes listed on
MIAX.
------------------------------------------------------------------------
[Omega] Excludes Proprietary Products.
* For these Monthly MIAX MEI Fees levels, if the Market Maker's total
monthly executed volume during the relevant month is less than 0.060%
of the total monthly executed volume reported by OCC in the market
maker account type for MIAX-listed option classes for that month, then
the fee will be $14,500 instead of the fee otherwise applicable to
such level.
MIAX proposes to extend the waiver of the monthly MEI Port Fee for
Market Makers that trade solely in Proprietary Products (including
options on SPIKES) from September 30, 2019 until December 31, 2019,
which the Exchange proposes to state in the Fee Schedule. The purpose
of this proposal is to continue to provide an incentive to Market
Makers to connect to MIAX through the MEI Port such that they will be
able to trade in MIAX Proprietary Products. Even though the Exchange is
proposing to extend the waiver of this particular fee for Market Makers
trading solely in Proprietary Products until September 30, 2019, the
overall structure of the fee is outlined in the Fee Schedule so that
there is general awareness that the Exchange intends to assess such a
fee after December 31, 2019.
The Exchange notes that for the purposes of this proposed change,
other Market Makers who trade MIAX Proprietary Products (including
options on SPIKES) along with multi-listed classes will continue to not
have Proprietary Products (including SPIKES) counted toward those
Market Makers' class assignment count or percentage of total national
average daily volume. This exclusion is noted by the symbol ``[Omega]''
following the table that shows the monthly MEI Port Fees currently
assessed for Market Makers in Section 5)d)ii) of the Fee Schedule.
The proposed extension of the fee waivers are targeted at market
participants, particularly market makers, who are not currently members
of MIAX, who may be interested in being a Market Maker in Proprietary
Products on the Exchange. The Exchange estimates that there are fewer
than ten (10) such market participants that could benefit from the
extension of these fee waivers. The proposed extension of the fee
waivers does not apply differently to different sizes of market
participants, however the fee waivers do only apply to Market Makers
(and not EEMs).
Market Makers, unlike other market participants, take on a number
of obligations, including quoting obligations that other market
participants do not have. Further, Market Makers have added market
making and regulatory requirements, which normally do not apply to
other market participants. For example, Market Makers have obligations
to maintain continuous markets, engage in a course of dealings
reasonably calculated to contribute to the maintenance of a fair and
orderly market, and to not make bids or offers or enter into
transactions that are inconsistent with a course of dealing.
Accordingly, the Exchange believes it is reasonable and not unfairly
discriminatory to continue to offer the fee waivers to Market Makers
because the Exchange is seeking additional liquidity providers for
Proprietary Products, in order to enhance liquidity and spreads in
Proprietary Products, which is traditionally provided by Market Makers,
as opposed to EEMs.
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
particular, in that it is an equitable allocation of reasonable fees
and other charges among its 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 in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest and is not designed to permit unfair discrimination between
customers, issuers, brokers and dealers.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that the proposal to extend the fee waiver
period for certain non-transaction fees for Market Makers in
Proprietary Products is an equitable allocation of reasonable fees
because the proposal continues to waive non-transaction fees for a
limited period of time in order to enable the Exchange to improve its
overall competitiveness and strengthen its market quality for all
market participants in MIAX's Proprietary Products, including options
on SPIKES. The Exchange believe the proposed extension of the fee
waivers is fair and
[[Page 55662]]
equitable and not unreasonably discriminatory because it applies to all
market participants not currently registered as Market Makers at the
Exchange. Any market participant may choose to satisfy the additional
requirements and obligations of being a Market Maker and trade solely
in Proprietary Products in order to qualify for the fee waivers.
The Exchange believes that the proposed extension of the fee
waivers is equitable and not unfairly discriminatory for Market Makers
as compared to EEMs because Market Makers, unlike other market
participants, take on a number of obligations, including quoting
obligations that other market participants do not have. Further, Market
Makers have added market making and regulatory requirements, which
normally do not apply to other market participants. For example, Market
Makers have obligations to maintain continuous markets, engage in a
course of dealings reasonably calculated to contribute to the
maintenance of a fair and orderly market, and to not make bids or
offers or enter into transactions that are inconsistent with a course
of dealing.
The Exchange believes it is reasonable and equitable to continue to
waive the one-time Membership Application Fee, monthly Trading Permit
Fee, API Testing and Certification Fee, and monthly MEI Port Fee for
Market Makers that trade solely in Proprietary Products (including
options on SPIKES) until December 31, 2019, since the waiver of such
fees provides incentives to interested market participants to trade in
Proprietary Products. This should result in increasing potential order
flow and liquidity in MIAX Proprietary Products, including options on
SPIKES.
The Exchange believes it is reasonable and equitable to continue to
waive the API Testing and Certification fee assessable to Market Makers
that trade solely in Proprietary Products (including options on SPIKES)
until December 31, 2019, since the waiver of such fees provides
incentives to interested Members to develop and test their APIs sooner.
Determining system operability with the Exchange's system will in turn
provide MIAX with potential order flow and liquidity providers in
Proprietary Products.
The Exchange believes it is reasonable, equitable and not unfairly
discriminatory that Market Makers who trade in Proprietary Products
along with multi-listed classes will continue to not have Proprietary
Products counted toward those Market Makers' class assignment count or
percentage of total national average daily volume for monthly Trading
Permit Fees and monthly MEI Port Fees in order to incentivize existing
Market Makers who currently trade in multi-listed classes to also trade
in Proprietary Products, without incurring certain additional fees.
The Exchange believes that the proposed extension of the fee
waivers constitutes an equitable allocation of reasonable fees and
other charges among its members and issuers and other persons using its
facilities. The proposed extension of the fee waivers means that all
prospective market makers that wish to become Market Maker Members of
the Exchange and quote solely in Proprietary Products may do so and
have the above-mentioned fees waived until December 31, 2019. The
proposed extension of the fee waivers will continue to not apply to
potential EEMs because the Exchange is seeking to enhance the quality
of its markets in Proprietary Products through introducing more
competition among Market Makers in Proprietary Products. In order to
increase the competition, the Exchange believes that it must continue
to waive entry type fees for such Market Makers. EEMs do not provide
the benefit of enhanced liquidity which is provided by Market Makers,
therefore the Exchange believes it is reasonable and not unfairly
discriminatory to continue to only offer the proposed fee waivers to
Market Makers (and not EEMs). Further, the Exchange believes it is
reasonable and not unfairly discriminatory to continue to exclude
Proprietary Products from an existing Market Maker's permit fees and
port fees, in order to incentive such Market Makers to quote in
Proprietary Products. The amount of a Market Maker's permit and port
fee is determined by the number of classes quoted and volume of the
Market Maker. By excluding Proprietary Products from such fees, the
Exchange is able to incentivize Market Makers to quote in Proprietary
Products. EEMs do not pay permit and port fees based on the classes
traded or volume, so the Exchange believes it is reasonable, equitable,
and not unfairly discriminatory to only offer the exclusion to Market
Makers (and not EEMs).
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.
Intra-Market Competition
The Exchange believes that the proposal to extend certain of the
non-transaction fee waivers until December 31, 2019 for Market Makers
in Proprietary Products would increase intra-market competition by
incentivizing new potential Market Makers to quote in Proprietary
Products, which will enhance the quality of quoting and increase the
volume of contracts in Proprietary Products traded on MIAX. To the
extent that this purpose is achieved, all the Exchange's market
participants should benefit from the improved market liquidity for the
Exchange's Proprietary Products. Enhanced market quality and increased
transaction volume in Proprietary Products that results from the
anticipated increase in Market Maker activity on the Exchange will
benefit all market participants and improve competition on the
Exchange.
The Exchange does not believe that the proposed rule change will
impose any burden on intra-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed changes for each separate type of market participant (new
Market Makers and existing Market Makers) will be assessed equally to
all such market participants. While different fees are assessed to
different market participants in some circumstances, these different
market participants have different obligations and different
circumstances as discussed above. For example, Market Makers have
quoting obligations that other market participants (such as EEMs) do
not have.
Inter-Market Competition
The Exchange does not believe that the proposed rule change will
impose any burden on inter-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed extension of the fee waivers apply only to the Exchange's
Proprietary Products (including options on SPIKES), which are traded
exclusively on 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
[[Page 55663]]
19(b)(3)(A)(ii) of the Act,\15\ and Rule 19b-4(f)(2) \16\ 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.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
\16\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-MIAX-2019-43 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-2019-43. 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 offices 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-2019-43, and should be submitted on
or before November 7, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-22599 Filed 10-16-19; 8:45 am]
BILLING CODE 8011-01-P
