Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule, 82008-82010 [2020-27721]
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82008
Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any written
comments from members or other
interested parties.
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)
of the Act 14 and paragraph (f) of Rule
19b–4 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 will institute proceedings
to determine whether the proposed rule
change 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–
CBOE–2020–115 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–2020–115. 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. 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–
2020–115 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. 2020–27723 Filed 12–16–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90640; File No. SR–
PEARL–2020–31]
Self-Regulatory Organizations; MIAX
PEARL, 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, MIAX PEARL,
LLC (‘‘MIAX PEARL’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
14 15
U.S.C. 78s(b)(3)(A).
15 17 CFR 240.19b–4(f).
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proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX PEARL Fee Schedule
(the ‘‘Fee Schedule’’).
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal
office, and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule for the Exchange’s options
market to amend the exchange
groupings of options exchanges within
the routing fee table in Section 1)b) of
the Fee Schedule.
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 3 (‘‘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, Miami
International Securities Exchange, LLC
3 See Securities Exchange Act Release No. 88992
(June 2, 2020), 85 FR 35142 (June 8, 2020) (SR–
PEARL–2020–06) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 404, Series of Option Contracts
Open for Trading, and Rule 510, Minimum Price
Variations and Minimum Trading Increments, 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).
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Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices
(‘‘MIAX’’) 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.4
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
82009
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, MIAX, 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 ....................................................................................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE American, BOX, Cboe, Cboe EDGX Options, Nasdaq ISE, Nasdaq MRX,
MIAX, Nasdaq PHLX, Nasdaq BX Options .............................................................................................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, NOM, MIAX
Emerald ....................................................................................................................................................................................................
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 Emerald, MIAX, NOM,
Nasdaq PHLX, Nasdaq BX Options ........................................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: NYSE American, MIAX, Cboe, Nasdaq PHLX,
Nasdaq ISE, Cboe EDGX Options ..........................................................................................................................................................
Routed, Public Customer that is not a Priority Customer, Non-Penny Program, to: Cboe C2, NOM, BOX, Nasdaq BX Options, 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,5
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 and
MIAX Emerald, but is also comparable
to the structures in place at other
competing options exchanges, such as
Cboe BZX.6 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 and MIAX
Emerald, the Exchange’s Members 7 will
be assessed routing fees in a similar
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 8
in general, and furthers the objectives of
Section 6(b)(4) of the Act 9 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 10 in that it is designed to
4 See Cboe BZX Fee Schedule under ‘‘Fee Codes
and Associated Fees.’’
5 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).
6 See supra note 4. 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.
7 The term ‘‘Member’’ means an individual or
organization that is registered with the Exchange
pursuant to Chapter II of Exchange Rules for
purposes of trading on the Exchange as an
‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’
Members are deemed ‘‘members’’ under the
Exchange Act. See the Definitions section of the Fee
Schedule and Exchange Rule 100.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(4).
10 15 U.S.C. 78f(b)(5).
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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
and MIAX Emerald, will file to make the
same proposed routing fee change for
Nasdaq MRX.
2. Statutory Basis
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Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices
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 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 believes its proposed recategorization 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
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behalf of Members and other exchanges
have similar routing fee structures.11
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,12 and Rule
19b–4(f)(2) 13 thereunder. At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
PEARL–2020–31 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–PEARL–2020–31. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
11 See
supra note 6.
U.S.C. 78s(b)(3)(A)(ii).
13 17 CFR 240.19b–4(f)(2).
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–PEARL–2020–31, and
should be submitted on or before
January 7, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–27721 Filed 12–16–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IA–5646]
Notice of Intention to Cancel
Registration Pursuant to section
203(H) of the Investment Advisers Act
of 1940
December 14, 2020.
Notice is given that the Securities and
Exchange Commission (the
‘‘Commission’’) intends to issue an
order, pursuant to section 203(h) of the
Investment Advisers Act of 1940 (the
‘‘Act’’), cancelling the registration of
Family Office Partners, Inc. [File No.
801–110022], hereinafter referred to as
the ‘‘registrant.’’
Section 203(h) of the Act provides, in
pertinent part, that if the Commission
finds that any person registered under
section 203 of the Act, or who has
pending an application for registration
filed under that section, is no longer in
existence, is not engaged in business as
an investment adviser, or is prohibited
from registering as an investment
12 15
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14 17
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CFR 200.30–3(a)(12).
17DEN1
]]>Agencies
[Federal Register Volume 85, Number 243 (Thursday, December 17, 2020)]
[Notices]
[Pages 82008-82010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27721]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-90640; File No. SR-PEARL-2020-31]
Self-Regulatory Organizations; MIAX PEARL, 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, MIAX PEARL, LLC (``MIAX
PEARL'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 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 PEARL Fee
Schedule (the ``Fee Schedule'').
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/pearl at MIAX
PEARL's principal office, and at the Commission's Public Reference
Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule for the Exchange's
options market to amend the exchange groupings of options exchanges
within the routing fee table in Section 1)b) of the Fee Schedule.
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 \3\ (``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, Miami
International Securities Exchange, LLC
[[Page 82009]]
(``MIAX'') 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.\4\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 88992 (June 2,
2020), 85 FR 35142 (June 8, 2020) (SR-PEARL-2020-06) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Exchange Rule 404, Series of Option Contracts Open for
Trading, and Rule 510, Minimum Price Variations and Minimum Trading
Increments, 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).
\4\ See Cboe BZX Fee Schedule under ``Fee Codes and Associated
Fees.''
---------------------------------------------------------------------------
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, MIAX, 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...................
Routed, Priority Customer, Non-Penny Program, to: NYSE 0.15
American, BOX, Cboe, Cboe EDGX Options, Nasdaq ISE, Nasdaq
MRX, MIAX, Nasdaq PHLX, Nasdaq BX Options...................
Routed, Priority Customer, Non-Penny Program, to: NYSE Arca 1.00
Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, NOM, MIAX
Emerald.....................................................
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 Emerald, MIAX, NOM,
Nasdaq PHLX, Nasdaq BX Options..............................
Routed, Public Customer that is not a Priority Customer, Non- 1.00
Penny Program, to: NYSE American, MIAX, 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, NOM, BOX, Nasdaq BX Options,
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.....................................
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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,\5\ 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 and MIAX Emerald, but
is also comparable to the structures in place at other competing
options exchanges, such as Cboe BZX.\6\ 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
and MIAX Emerald, the Exchange's Members \7\ 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 and MIAX Emerald, will file to make the same proposed routing fee
change for Nasdaq MRX.
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\5\ 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).
\6\ See supra note 4. 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.
\7\ The term ``Member'' means an individual or organization that
is registered with the Exchange pursuant to Chapter II of Exchange
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See the Definitions section of
the Fee Schedule and Exchange Rule 100.
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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 \8\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \9\ 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 \10\ in that it is designed to
[[Page 82010]]
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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
\10\ 15 U.S.C. 78f(b)(5).
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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 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.\11\
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\11\ 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,\12\ and Rule 19b-4(f)(2) \13\ 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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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-PEARL-2020-31 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-PEARL-2020-31. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-PEARL-2020-31, and should be submitted
on or before January 7, 2021.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-27721 Filed 12-16-20; 8:45 am]
BILLING CODE 8011-01-P
