Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule, 81996-81999 [2020-27719]
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81996
Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices
as applicable) 27 received in connection
with a Co-Investment Transaction will
be distributed to the participating
Regulated Entities and Affiliated
Investors on a pro rata basis based on
the amount they invested or committed,
as the case may be, in such CoInvestment Transaction. If any
transaction fee is to be held by an
Adviser pending consummation of the
transaction, the fee will be deposited
into an account maintained by the
Adviser at a bank or banks having the
qualifications prescribed in Section
26(a)(1) of the 1940 Act, and the account
will earn a competitive rate of interest
that will also be divided pro rata among
the participating Regulated Entities and
Affiliated Investors based on the amount
they invest in the Co-Investment
Transaction. None of the other
Regulated Entities, Affiliated Investors,
the applicable Adviser(s) nor any
affiliated person of the Regulated
Entities or the Affiliated Investors will
receive additional compensation or
remuneration of any kind as a result of
or in connection with a Co-Investment
Transaction (other than (a) in the case
of the Regulated Entities and the
Affiliated Investors, the pro rata
transaction fees described above and
fees or other compensation described in
condition 2(c)(iii)(B) and (b) in the case
of the Advisers, investment advisory
fees paid in accordance with the
Regulated Entities’ and the Affiliated
Investors’ investment advisory
agreements).
16. The Advisers to the Regulated
Entities and Affiliated Investors will
maintain written policies and
procedures reasonably designed to
ensure compliance with the foregoing
conditions. These policies and
procedures will require, among other
things, that each of the Advisers to each
Regulated Entity will be notified of all
Potential Co-Investment Transactions
that fall within such Regulated Entity’s
then-current Objectives and Strategies
and Board-Established Criteria and will
be given sufficient information to make
its independent determination and
recommendations under conditions 1,
2(a), 7, 8, 9 and 10.
17. If the Holders own in the aggregate
more than 25 percent of the Shares of
a Regulated Entity, then the Holders
will vote such Shares in the same
percentages as the Regulated Entity’s
other shareholders (not including the
Holders) when voting on (1) the election
of directors; (2) the removal of one or
27 Applicants are not requesting and the
Commission is not providing any relief for
transaction fees received in connection with any
Co-Investment Transaction.
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more directors; or (3) any other matter
under either the 1940 Act or applicable
state law affecting the Board’s
composition, size or manner of election.
18. Each Regulated Entity’s chief
compliance officer, as defined in Rule
38a–1(a)(4), will prepare an annual
report for its Board each year that
evaluates (and documents the basis of
that evaluation) the Regulated Entity’s
compliance with the terms and
conditions of the application and the
procedures established to achieve such
compliance.
For the Commission, by the Division of
Investment Management, under delegated
authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–27714 Filed 12–16–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90638; File No. SR–MIAX–
2020–37]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the Fee Schedule
December 11, 2020.
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 December 1, 2020, Miami
International Securities Exchange LLC
(‘‘MIAX Options’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX Options Fee Schedule
(‘‘Fee Schedule’’).
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings, at MIAX’s principal office, and
at the Commission’s Public Reference
Room.
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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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 (i) make a
minor, corrective edit and clarifying
change to one of the footnotes in Section
1)b)i) of the Fee Schedule; and (ii)
amend the exchange groupings of
options exchanges within the routing
fee table in Section 1)c) of the Fee
Schedule.
Fee Schedule Cleanup
First, the Exchange proposes to
amend footnote ‘‘!’’ in Section 1)b)i) of
the Fee Schedule to make a minor,
corrective edit and clarifying change.
Footnote ‘‘!’’ currently provides as
follows: ‘‘The SPIKES Combination
portion of a SPIKES Combination Order
will be charged at the Combination rate
and other legs will be charged at the
Complex rate. All fees are per contract
per leg.’’ Pursuant to Exchange Rule
518, Interpretation and Policy .07(a), a
‘‘SPIKES Combination’’ is a purchase
(sale) of a SPIKES call option and sale
(purchase) of a SPIKES put option
having the same expiration date and
strike price.3 Further, a ‘‘SPIKES Combo
Order’’ is an order to purchase or sell
one or more SPIKES option series and
the offsetting number of SPIKES
Combinations defined by the delta.4 The
Exchange proposes to amend footnote
‘‘!’’ to delete the word ‘‘Combination’’ in
the phrase ‘‘SPIKES Combination
Order’’ and replace it with the word
‘‘Combo.’’ The purpose of this proposed
change is to provide the correct name of
the type of order in footnote ‘‘!’’.
3 See Exchange Rule 518, Interpretation and
Policy .07(a)(1).
4 See Exchange Rule 518, Interpretation and
Policy .07(a)(3).
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Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices
Update Group of Certain Options
Exchanges
Next, the Exchange proposes to
amend the exchange groupings of
options exchanges within the routing
fee table in Section 1)c) of the Fee
Schedule to adjust certain groupings of
options exchanges.
Currently, the Exchange assesses
routing fees based upon (i) the origin
type of the order, (ii) whether or not it
is an order for standard option classes
in the Penny Interval Program 5 (‘‘Penny
classes’’) or an order for standard option
classes which are not in the Penny
Interval Program (‘‘Non-Penny classes’’)
(or other explicitly identified classes),
and (iii) to which away market it is
being routed. This assessment practice
is identical to the routing fees
assessment practice currently utilized
by the Exchange’s affiliates, MIAX
PEARL, LLC (‘‘MIAX PEARL’’) and
MIAX Emerald, LLC (‘‘MIAX Emerald’’).
This is also similar to the methodologies
utilized by other competing options
exchanges, such as the Cboe BZX
Exchange, Inc. (‘‘Cboe BZX’’), in
assessing routing fees. Cboe BZX has
exchange groupings in its fee schedule,
similar to those of the Exchange,
whereby several exchanges are grouped
into the same category, dependent on
the order’s origin type and whether it is
a Penny or Non-Penny class.6
As a result of conducting a periodic
review of the current transaction fees
and rebates charged by away markets,
the Exchange has determined to amend
the exchange groupings of options
exchanges within the routing fee table to
better reflect the associated costs of
routing customer orders to those options
exchanges for execution. In particular,
the Exchange proposes to amend the
seventh ‘‘Routed, Public Customer that
is not a Priority Customer, Non-Penny
Program’’ exchange grouping to move
81997
Nasdaq MRX from the seventh exchange
grouping into the eighth ‘‘Routed,
Public Customer that is not a Priority
Customer, Non-Penny Program’’
exchange grouping. The impact of this
proposed change will be that the routing
fee for Public Customer orders that are
not Priority Customer orders in the
Penny Program, that are routed to
Nasdaq MRX, LLC (‘‘Nasdaq MRX’’),
will increase from $1.15 to $1.25. The
Exchange notes that no options
exchanges were removed from the
routing fee table entirely, with the only
change being the change in
categorization for Nasdaq MRX. The
purpose of the proposed rule change is
to adjust the routing fee for certain
orders routed to Nasdaq MRX to reflect
the associated costs for that routed
execution.
Accordingly, with the proposed
change, the routing fee table will be as
follows:
Description
Fees
Routed, Priority Customer, Penny Program, to: NYSE American, BOX, Cboe, Cboe EDGX Options, Nasdaq MRX, Nasdaq PHLX
(except SPY), Nasdaq BX Options ..........................................................................................................................................................
Routed, Priority Customer, Penny Program, to: NYSE Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, Nasdaq ISE,
NOM, Nasdaq PHLX (SPY only), MIAX Emerald, MIAX PEARL ............................................................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE American, BOX, Cboe, Cboe EDGX Options, Nasdaq ISE, Nasdaq MRX,
Nasdaq PHLX, Nasdaq BX Options ........................................................................................................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE Arca Options, Cboe BZX Options, Cboe C2, MIAX PEARL, MIAX Emerald, Nasdaq GEMX, NOM ........................................................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Penny Program, to: NYSE American, NYSE Arca Options, Cboe BZX Options, BOX, Cboe, Cboe C2, Cboe EDGX Options, Nasdaq GEMX, Nasdaq ISE, Nasdaq MRX, MIAX PEARL, MIAX Emerald,
NOM, Nasdaq PHLX, Nasdaq BX Options ..............................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: NYSE American, Cboe, Nasdaq PHLX, Nasdaq
ISE, Cboe EDGX Options ........................................................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: Cboe C2, BOX, Nasdaq BX Options, NOM, MIAX
PEARL, MIAX Emerald ............................................................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: Cboe BZX Options, NYSE Arca Options, Nasdaq
GEMX, Nasdaq MRX ...............................................................................................................................................................................
$0.15
0.65
0.15
1.00
0.65
1.00
1.15
1.25
In determining to amend its Routing
Fees, the Exchange took into account
transaction fees and rebates assessed by
the away markets to which the
Exchange routes orders, as well as the
Exchange’s clearing costs,7
administrative, regulatory, and technical
costs associated with routing orders to
an away market. The Exchange uses
unaffiliated routing brokers to route
orders to the away markets; the costs
associated with the use of these services
are included in the routing fees
specified in the Fee Schedule. This
routing fees structure is not only similar
to the Exchange’s affiliates, MIAX
PEARL and MIAX Emerald, but is also
comparable to the structures in place at
other competing options exchanges,
such as Cboe BZX.8 The Exchange’s
routing fee structure approximates the
Exchange’s costs associated with routing
orders to away markets. The percontract transaction fee amount
associated with each grouping closely
approximates the Exchange’s all-in cost
(plus an additional, non-material
amount) to execute that corresponding
contract at that corresponding exchange.
The Exchange notes that in determining
whether to adjust certain groupings of
options exchanges in the routing fee
table, the Exchange considered the
transaction fees and rebates assessed by
away markets, and determined to amend
the grouping of exchanges that assess
transaction fees for routed orders within
a similar range. This same logic and
structure applies to all of the groupings
in the routing fees table. By utilizing the
same structure that is utilized by the
Exchange’s affiliates, MIAX PEARL and
5 See Securities Exchange Act Release No. 88988
(June 2, 2020), 85 FR 35153 (June 8, 2020) (SR–
MIAX–2020–13) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 404, Series of Option Contracts
Open for Trading, Exchange Rule 510, Minimum
Price Variations and Minimum Trading Increments,
and Exchange Rule 516, Order Types Defined, To
Conform the Rules to Section 3.1 of the Plan for the
Purpose of Developing and Implementing
Procedures Designed To Facilitate the Listing and
Trading of Standardized Options).
6 See Cboe BZX Fee Schedule under ‘‘Fee Codes
and Associated Fees.’’
7 The OCC amended its clearing fee from $0.01
per contract side to $0.02 per contract side. See
Securities Exchange Act Release No. 71769 (March
21, 2014), 79 FR 17214 (March 27, 2014) (SR–OCC–
2014–05).
8 See supra note 6. The Cboe BZX fee schedule
has exchange groupings, whereby several exchanges
are grouped into the same category, dependent on
the order’s Origin type and whether it is a Penny
or Non-Penny class. For example, Cboe BZX fee
code RR covers routed customer orders in NonPenny classes to NYSE Arca, Cboe C2, Nasdaq ISE,
Nasdaq Gemini, MIAX Emerald, MIAX PEARL, or
NOM, with a single fee of $1.25 per contract. Id.
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81998
Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices
MIAX Emerald, the Exchange’s
Members 9 will be assessed routing fees
in a similar manner. The Exchange
believes that this structure will
minimize any confusion as to the
method of assessing routing fees
between the three exchanges. The
Exchange notes that its affiliates, MIAX
PEARL and MIAX Emerald, will file to
make the same proposed routing fee
change for Nasdaq MRX.
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
particular, in that it is an equitable
allocation of reasonable dues, 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 12 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 the proposed
change to make a minor, corrective edit
and clarifying change to footnote ‘‘!’’ in
Section 1)b)i) of the Fee Schedule
promotes just and equitable principles
of trade and removes impediments to
and perfects the mechanism of a free
and open market and a national market
system because the proposed change
will provide greater clarity to Members
and the public regarding the Exchange’s
Fee Schedule. The Exchange believes
that it is in the public interest for the
Fee Schedule to be accurate and concise
so as to eliminate the potential for
confusion.
The Exchange believes the proposed
change to the exchange groupings of
options exchanges within the routing
fee table furthers the objectives of
Section 6(b)(4) of the Act and is
reasonable, equitable and not unfairly
discriminatory because the proposed
change will continue to apply in the
same manner to all Members that are
subject to routing fees. The Exchange
believes the proposed change to the
9 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(4).
12 15 U.S.C. 78f(b)(5).
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routing fee table exchange groupings
furthers the objectives of Section 6(b)(5)
of the Act and is designed to promote
just and equitable principles of trade
and is not unfairly discriminatory
because the proposed change seeks to
recoup costs that are incurred by the
Exchange when routing customer orders
to away markets on behalf of Members
and does so in the same manner to all
Members that are subject to routing fees.
The costs to the Exchange to route
orders to away markets for execution
primarily includes transaction fees and
rebates assessed by the away markets to
which the Exchange routes orders, in
addition to the Exchange’s clearing
costs, administrative, regulatory and
technical costs. The Exchange believes
that the proposed re-categorization of
certain exchange groupings would
enable the Exchange to recover the costs
it incurs to route orders to Nasdaq MRX.
The per-contract transaction fee amount
associated with each grouping
approximates the Exchange’s all-in cost
(plus an additional, non-material
amount) to execute the corresponding
contract at the corresponding exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange’s proposal to make a minor,
corrective edit and clarifying change to
footnote ‘‘!’’ in Section 1)b)i) of the Fee
Schedule is not a competitive change
but rather is designed to remedy a minor
non-substantive issue and provide
added clarity to the Fee Schedule in
order to avoid potential confusion on
the part of market participants. In
addition, the Exchange does not believe
the proposal will impose any burden on
inter-market competition as the
proposal does not address any
competitive issues and is intended to
protect investors by providing further
transparency regarding the Exchange’s
Fee Schedule.
The Exchange believes its proposed
re-categorization of certain exchange
groupings is intended to enable the
Exchange to recover the costs it incurs
to route orders to away markets,
particularly Nasdaq MRX. The Exchange
does not believe that this proposal
imposes any unnecessary burden on
competition because it seeks to recoup
costs incurred by the Exchange when
routing orders to away markets on
behalf of Members and other exchanges
have similar routing fee structures.13
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act,14 and Rule
19b–4(f)(2) 15 thereunder. At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
MIAX–2020–37 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–2020–37. 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
14 15
13 See
PO 00000
supra note 6.
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U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
17DEN1
Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / 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–MIAX–2020–37, and
should be submitted on or before
January 7, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–27719 Filed 12–16–20; 8:45 am]
December 21, 2020, during the Open
Meeting:
3. The Commission will consider
whether to approve a proposed rule
change by New York Stock Exchange
LLC to amend Chapter One of the Listed
Company Manual to modify the
provisions relating to direct listings.
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed, please contact the
Office of the Secretary at (202) 551–
5400.
Dated: December 14, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020–27867 Filed 12–15–20; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90650; File No. SR–
NYSEAMER–2020–84]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the NYSE
American Options Fee Schedule
BILLING CODE 8011–01–P
December 11, 2020.
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
FEDERAL REGISTER CITATION OF PREVIOUS
ANNOUNCEMENTS: 85 FR 80875,
December 14, 2020.
PREVIOUSLY ANNOUNCED TIME AND DATE OF
THE MEETINGS: Wednesday, December
16, 2020 at 10:00 a.m.
The following
item will not be considered during the
Open Meeting on Wednesday, December
16, 2020:
2. The Commission will consider
whether to adopt amendments under
the Investment Advisers Act of 1940
(the ‘‘Advisers Act’’) to update rules that
govern investment adviser marketing to
accommodate the continual evolution
and interplay of technology and advice,
while preserving investor protections.
The Commission will also consider
whether to adopt amendments to Form
ADV to provide the Commission with
additional information about advisers’
marketing practices, and corresponding
amendments to the books and records
rule under the Advisers Act.
In addition, the following previously
scheduled matter will be considered on
CHANGES IN THE MEETING:
16 17
CFR 200.30–3(a)(12).
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Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on December
7, 2020, NYSE American LLC (‘‘NYSE
American’’ or the ‘‘Exchange’’) 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 selfregulatory organization. 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 proposes to amend the
NYSE American Options Fee Schedule
(‘‘Fee Schedule’’) regarding credits and
incentives relating to Complex
Customer Best Execution Auctions. The
Exchange proposes to implement the fee
changes effective December 7, 2020.4
The proposed change is available on the
Exchange’s website at www.nyse.com, at
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 The Exchange originally filed to amend the Fee
Schedule on December 1, 2020 (SR–NYSEAMER–
2020–82) and withdrew such filing on December 7,
2020.
2 15
PO 00000
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81999
the principal office of the Exchange, 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
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to modify
the Fee Schedule to (1) amend the
criteria to qualify for a credit available
to Initiating Participants in a Complex
Customer Best Execution (‘‘CUBE’’)
Auction,5 and (2) eliminate an unused
incentive that had been designed to
encourage the use of Complex CUBE
Auctions. The Exchange proposes to
implement the rule changes on
December 7, 2020.
Proposed Modifications to the Fee
Schedule
Volume Qualification for Alternative
Initiating Participant Rebate
Section I.G. of the Fee Schedule sets
forth the rates for per contract fees and
credits for executions associated with
Single-Leg and Complex CUBE
Auctions.6 To encourage participants to
utilize Complex CUBE Auctions, the
Exchange offers rebates and credits on
certain initiating Complex CUBE
volume. Currently, the Exchange offers
Initiating Participant Rebates for the
first 1,000 contracts per leg of a
Complex CUBE Order executed in a
Complex CUBE Auction.7 The Exchange
offers an ACE Initiating Participant
Rebate to ATP Holders that qualify for
the American Customer Engagement
5 See generally Rule 971.2NY (regarding Complex
CUBE Auctions). Unless otherwise specified,
capitalized terms have the same meaning as the
defined terms in Rule 971.2NY.
6 See Fee Schedule, Section I.G., CUBE Auction
Fees & Credits.
7 See id., Complex CUBE Auction, note 2 (setting
forth both the ACE Initiating Participant Rebate and
the Alternative Initiating Participant Rebate).
E:\FR\FM\17DEN1.SGM
17DEN1
]]>Agencies
[Federal Register Volume 85, Number 243 (Thursday, December 17, 2020)]
[Notices]
[Pages 81996-81999]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27719]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-90638; File No. SR-MIAX-2020-37]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fee Schedule
December 11, 2020.
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 December 1, 2020, Miami International
Securities Exchange LLC (``MIAX Options'' or ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') a proposed rule
change as described in Items I, II, and III below, which Items have
been prepared by the Exchange. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend the MIAX Options Fee
Schedule (``Fee Schedule'').
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings, at MIAX's principal
office, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to (i) make a minor, corrective edit and
clarifying change to one of the footnotes in Section 1)b)i) of the Fee
Schedule; and (ii) amend the exchange groupings of options exchanges
within the routing fee table in Section 1)c) of the Fee Schedule.
Fee Schedule Cleanup
First, the Exchange proposes to amend footnote ``!'' in Section
1)b)i) of the Fee Schedule to make a minor, corrective edit and
clarifying change. Footnote ``!'' currently provides as follows: ``The
SPIKES Combination portion of a SPIKES Combination Order will be
charged at the Combination rate and other legs will be charged at the
Complex rate. All fees are per contract per leg.'' Pursuant to Exchange
Rule 518, Interpretation and Policy .07(a), a ``SPIKES Combination'' is
a purchase (sale) of a SPIKES call option and sale (purchase) of a
SPIKES put option having the same expiration date and strike price.\3\
Further, a ``SPIKES Combo Order'' is an order to purchase or sell one
or more SPIKES option series and the offsetting number of SPIKES
Combinations defined by the delta.\4\ The Exchange proposes to amend
footnote ``!'' to delete the word ``Combination'' in the phrase
``SPIKES Combination Order'' and replace it with the word ``Combo.''
The purpose of this proposed change is to provide the correct name of
the type of order in footnote ``!''.
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\3\ See Exchange Rule 518, Interpretation and Policy .07(a)(1).
\4\ See Exchange Rule 518, Interpretation and Policy .07(a)(3).
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[[Page 81997]]
Update Group of Certain Options Exchanges
Next, the Exchange proposes to amend the exchange groupings of
options exchanges within the routing fee table in Section 1)c) of the
Fee Schedule to adjust certain groupings of options exchanges.
Currently, the Exchange assesses routing fees based upon (i) the
origin type of the order, (ii) whether or not it is an order for
standard option classes in the Penny Interval Program \5\ (``Penny
classes'') or an order for standard option classes which are not in the
Penny Interval Program (``Non-Penny classes'') (or other explicitly
identified classes), and (iii) to which away market it is being routed.
This assessment practice is identical to the routing fees assessment
practice currently utilized by the Exchange's affiliates, MIAX PEARL,
LLC (``MIAX PEARL'') and MIAX Emerald, LLC (``MIAX Emerald''). This is
also similar to the methodologies utilized by other competing options
exchanges, such as the Cboe BZX Exchange, Inc. (``Cboe BZX''), in
assessing routing fees. Cboe BZX has exchange groupings in its fee
schedule, similar to those of the Exchange, whereby several exchanges
are grouped into the same category, dependent on the order's origin
type and whether it is a Penny or Non-Penny class.\6\
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\5\ See Securities Exchange Act Release No. 88988 (June 2,
2020), 85 FR 35153 (June 8, 2020) (SR-MIAX-2020-13) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Exchange Rule 404, Series of Option Contracts Open for
Trading, Exchange Rule 510, Minimum Price Variations and Minimum
Trading Increments, and Exchange Rule 516, Order Types Defined, To
Conform the Rules to Section 3.1 of the Plan for the Purpose of
Developing and Implementing Procedures Designed To Facilitate the
Listing and Trading of Standardized Options).
\6\ See Cboe BZX Fee Schedule under ``Fee Codes and Associated
Fees.''
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As a result of conducting a periodic review of the current
transaction fees and rebates charged by away markets, the Exchange has
determined to amend the exchange groupings of options exchanges within
the routing fee table to better reflect the associated costs of routing
customer orders to those options exchanges for execution. In
particular, the Exchange proposes to amend the seventh ``Routed, Public
Customer that is not a Priority Customer, Non-Penny Program'' exchange
grouping to move Nasdaq MRX from the seventh exchange grouping into the
eighth ``Routed, Public Customer that is not a Priority Customer, Non-
Penny Program'' exchange grouping. The impact of this proposed change
will be that the routing fee for Public Customer orders that are not
Priority Customer orders in the Penny Program, that are routed to
Nasdaq MRX, LLC (``Nasdaq MRX''), will increase from $1.15 to $1.25.
The Exchange notes that no options exchanges were removed from the
routing fee table entirely, with the only change being the change in
categorization for Nasdaq MRX. The purpose of the proposed rule change
is to adjust the routing fee for certain orders routed to Nasdaq MRX to
reflect the associated costs for that routed execution.
Accordingly, with the proposed change, the routing fee table will
be as follows:
------------------------------------------------------------------------
Description Fees
------------------------------------------------------------------------
Routed, Priority Customer, Penny Program, to: NYSE American, $0.15
BOX, Cboe, Cboe EDGX Options, Nasdaq MRX, Nasdaq PHLX
(except SPY), Nasdaq BX Options.............................
Routed, Priority Customer, Penny Program, to: NYSE Arca 0.65
Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, Nasdaq ISE,
NOM, Nasdaq PHLX (SPY only), MIAX Emerald, MIAX PEARL.......
Routed, Priority Customer, Non-Penny Program, to: NYSE 0.15
American, BOX, Cboe, Cboe EDGX Options, Nasdaq ISE, Nasdaq
MRX, Nasdaq PHLX, Nasdaq BX Options.........................
Routed, Priority Customer, Non-Penny Program, to: NYSE Arca 1.00
Options, Cboe BZX Options, Cboe C2, MIAX PEARL, MIAX
Emerald, Nasdaq GEMX, NOM...................................
Routed, Public Customer that is not a Priority Customer, 0.65
Penny Program, to: NYSE American, NYSE Arca Options, Cboe
BZX Options, BOX, Cboe, Cboe C2, Cboe EDGX Options, Nasdaq
GEMX, Nasdaq ISE, Nasdaq MRX, MIAX PEARL, MIAX Emerald, NOM,
Nasdaq PHLX, Nasdaq BX Options..............................
Routed, Public Customer that is not a Priority Customer, Non- 1.00
Penny Program, to: NYSE American, Cboe, Nasdaq PHLX, Nasdaq
ISE, Cboe EDGX Options......................................
Routed, Public Customer that is not a Priority Customer, Non- 1.15
Penny Program, to: Cboe C2, BOX, Nasdaq BX Options, NOM,
MIAX PEARL, MIAX Emerald....................................
Routed, Public Customer that is not a Priority Customer, Non- 1.25
Penny Program, to: Cboe BZX Options, NYSE Arca Options,
Nasdaq GEMX, Nasdaq MRX.....................................
------------------------------------------------------------------------
In determining to amend its Routing Fees, the Exchange took into
account transaction fees and rebates assessed by the away markets to
which the Exchange routes orders, as well as the Exchange's clearing
costs,\7\ administrative, regulatory, and technical costs associated
with routing orders to an away market. The Exchange uses unaffiliated
routing brokers to route orders to the away markets; the costs
associated with the use of these services are included in the routing
fees specified in the Fee Schedule. This routing fees structure is not
only similar to the Exchange's affiliates, MIAX PEARL and MIAX Emerald,
but is also comparable to the structures in place at other competing
options exchanges, such as Cboe BZX.\8\ The Exchange's routing fee
structure approximates the Exchange's costs associated with routing
orders to away markets. The per-contract transaction fee amount
associated with each grouping closely approximates the Exchange's all-
in cost (plus an additional, non-material amount) to execute that
corresponding contract at that corresponding exchange. The Exchange
notes that in determining whether to adjust certain groupings of
options exchanges in the routing fee table, the Exchange considered the
transaction fees and rebates assessed by away markets, and determined
to amend the grouping of exchanges that assess transaction fees for
routed orders within a similar range. This same logic and structure
applies to all of the groupings in the routing fees table. By utilizing
the same structure that is utilized by the Exchange's affiliates, MIAX
PEARL and
[[Page 81998]]
MIAX Emerald, the Exchange's Members \9\ will be assessed routing fees
in a similar manner. The Exchange believes that this structure will
minimize any confusion as to the method of assessing routing fees
between the three exchanges. The Exchange notes that its affiliates,
MIAX PEARL and MIAX Emerald, will file to make the same proposed
routing fee change for Nasdaq MRX.
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\7\ The OCC amended its clearing fee from $0.01 per contract
side to $0.02 per contract side. See Securities Exchange Act Release
No. 71769 (March 21, 2014), 79 FR 17214 (March 27, 2014) (SR-OCC-
2014-05).
\8\ See supra note 6. The Cboe BZX fee schedule has exchange
groupings, whereby several exchanges are grouped into the same
category, dependent on the order's Origin type and whether it is a
Penny or Non-Penny class. For example, Cboe BZX fee code RR covers
routed customer orders in Non-Penny classes to NYSE Arca, Cboe C2,
Nasdaq ISE, Nasdaq Gemini, MIAX Emerald, MIAX PEARL, or NOM, with a
single fee of $1.25 per contract. Id.
\9\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
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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 \10\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \11\ in
particular, in that it is an equitable allocation of reasonable dues,
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 \12\ 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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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed change to make a minor,
corrective edit and clarifying change to footnote ``!'' in Section
1)b)i) of the Fee Schedule promotes just and equitable principles of
trade and removes impediments to and perfects the mechanism of a free
and open market and a national market system because the proposed
change will provide greater clarity to Members and the public regarding
the Exchange's Fee Schedule. The Exchange believes that it is in the
public interest for the Fee Schedule to be accurate and concise so as
to eliminate the potential for confusion.
The Exchange believes the proposed change to the exchange groupings
of options exchanges within the routing fee table furthers the
objectives of Section 6(b)(4) of the Act and is reasonable, equitable
and not unfairly discriminatory because the proposed change will
continue to apply in the same manner to all Members that are subject to
routing fees. The Exchange believes the proposed change to the routing
fee table exchange groupings furthers the objectives of Section 6(b)(5)
of the Act and is designed to promote just and equitable principles of
trade and is not unfairly discriminatory because the proposed change
seeks to recoup costs that are incurred by the Exchange when routing
customer orders to away markets on behalf of Members and does so in the
same manner to all Members that are subject to routing fees. The costs
to the Exchange to route orders to away markets for execution primarily
includes transaction fees and rebates assessed by the away markets to
which the Exchange routes orders, in addition to the Exchange's
clearing costs, administrative, regulatory and technical costs. The
Exchange believes that the proposed re-categorization of certain
exchange groupings would enable the Exchange to recover the costs it
incurs to route orders to Nasdaq MRX. The per-contract transaction fee
amount associated with each grouping approximates the Exchange's all-in
cost (plus an additional, non-material amount) to execute the
corresponding contract at the corresponding exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange's proposal to make
a minor, corrective edit and clarifying change to footnote ``!'' in
Section 1)b)i) of the Fee Schedule is not a competitive change but
rather is designed to remedy a minor non-substantive issue and provide
added clarity to the Fee Schedule in order to avoid potential confusion
on the part of market participants. In addition, the Exchange does not
believe the proposal will impose any burden on inter-market competition
as the proposal does not address any competitive issues and is intended
to protect investors by providing further transparency regarding the
Exchange's Fee Schedule.
The Exchange believes its proposed re-categorization of certain
exchange groupings is intended to enable the Exchange to recover the
costs it incurs to route orders to away markets, particularly Nasdaq
MRX. The Exchange does not believe that this proposal imposes any
unnecessary burden on competition because it seeks to recoup costs
incurred by the Exchange when routing orders to away markets on behalf
of Members and other exchanges have similar routing fee structures.\13\
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\13\ See supra note 6.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\14\ and Rule 19b-4(f)(2) \15\ thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
\15\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-MIAX-2020-37 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-2020-37. 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 81999]]
proposed rule change between the Commission and any person, other than
those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-MIAX-2020-37, and should be
submitted on or before January 7, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-27719 Filed 12-16-20; 8:45 am]
BILLING CODE 8011-01-P
