Self-Regulatory Organizations; MIAX EMERALD, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 15460-15464 [2022-05699]
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15460
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Notices
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For information about filing a petition
and about participation by a person not
a party under 10 CFR 2.315, see ADAMS
Accession No. ML20340A053 and on
the NRC website at https://www.nrc.gov/
about-nrc/regulatory/adjudicatory/
hearing.html#participate.
V. Electronic Submissions (E-Filing)
All documents filed in NRC
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recognized Indian Tribe, or designated
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be filed in accordance with 10 CFR
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adjudicatory documents over the
internet, or in some cases, to mail copies
on electronic storage media, unless an
exemption permitting an alternative
filing method, as further discussed, is
granted. Detailed guidance on electronic
submissions is located in the Guidance
for Electronic Submissions to the NRC
(ADAMS Accession No. ML13031A056)
and on the NRC website at https://
www.nrc.gov/site-help/e-submittals.
html.
To comply with the procedural
requirements of E-Filing, at least 10
days prior to the filing deadline, the
participant should contact the Office of
the Secretary by email at
Hearing.Docket@nrc.gov, or by
telephone at 301–415–1677, to (1)
request a digital identification (ID)
certificate, which allows the participant
(or its counsel or representative) to
digitally sign submissions and access
the E-Filing system for any proceeding
in which it is participating; and (2)
advise the Secretary that the participant
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counsel or representative, already holds
an NRC-issued digital ID certificate).
Based upon this information, the
Secretary will establish an electronic
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Secretary has not already established an
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Information about applying for a
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getting-started.html. After a digital ID
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Document Format. Guidance on
submissions is available on the NRC’s
public website at https://www.nrc.gov/
site-help/electronic-sub-ref-mat.html. A
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filing is considered complete at the time
the document is submitted through the
NRC’s E-Filing system. To be timely, an
electronic filing must be submitted to
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Upon receipt of a transmission, the EFiling system time-stamps the document
and sends the submitter an email
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and any others who have advised the
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participate in the proceeding, so that the
filer need not serve the document on
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applicants and other participants (or
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certificate before adjudicatory
documents are filed to obtain access to
the documents via the E-Filing system.
A person filing electronically using
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may seek assistance by contacting the
NRC’s Electronic Filing Help Desk
through the ‘‘Contact Us’’ link located
on the NRC’s public website at https://
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html, by email to MSHD.Resource@
nrc.gov, or by a toll-free call at 1–866–
672–7640. The NRC Electronic Filing
Help Desk is available between 9 a.m.
and 6 p.m., Eastern Time, Monday
through Friday, excluding government
holidays.
Participants who believe that they
have good cause for not submitting
documents electronically must file an
exemption request, in accordance with
10 CFR 2.302(g), with their initial paper
filing stating why there is good cause for
not filing electronically and requesting
authorization to continue to submit
documents in paper format. Such filings
must be submitted in accordance with
10 CFR 2.302(b)–(d). Participants filing
adjudicatory documents in this manner
are responsible for serving their
documents on all other participants.
Participants granted an exemption
under 10 CFR 2.302(g)(2) must still meet
the electronic formatting requirement in
10 CFR 2.302(g)(1), unless the
participant also seeks and is granted an
exemption from 10 CFR 2.302(g)(1).
Documents submitted in adjudicatory
proceedings will appear in the NRC’s
electronic hearing docket, which is
publicly available at https://
adams.nrc.gov/ehd, unless excluded
pursuant to an order of the presiding
officer. If you do not have an NRCissued digital ID certificate as
previously described, click ‘‘cancel’’
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when the link requests certificates and
you will be automatically directed to the
NRC’s electronic hearing dockets where
you will be able to access any publicly
available documents in a particular
hearing docket. Participants are
requested not to include personal
privacy information such as social
security numbers, home addresses, or
personal phone numbers in their filings
unless an NRC regulation or other law
requires submission of such
information. With respect to
copyrighted works, except for limited
excerpts that serve the purpose of the
adjudicatory filings and would
constitute a Fair Use application,
participants should not include
copyrighted materials in their
submission.
For further details with respect to this
action, see the application for license
amendment dated March 11, 2021
(ADAMS Accession No. ML21070A412),
as supplemented by letters dated May 5,
2021, December 15, 2021, and February
14, 2022 (ADAMS Accession Nos.
ML21125A215, ML21349B364, and
ML22045A480, respectively).
Attorney for licensee: Tamra Domeyer,
Associate General Counsel,
Constellation Energy Generation, LLC,
4300 Winfield Road, Warrenville, IL
60555.
NRC Branch Chief: James Danna.
Dated: March 15, 2022.
For the Nuclear Regulatory Commission.
Venkataiah Sreenivas,
Project Manager, Plant Licensing Branch I,
Division of Operating Reactor Licensing,
Office of Nuclear Reactor Regulation.
[FR Doc. 2022–05733 Filed 3–17–22; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94406; File No. SR–
EMERALD–2022–10]
Self-Regulatory Organizations; MIAX
EMERALD, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee
Schedule
March 14, 2022.
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Notices
notice is hereby given that on February
28, 2022, MIAX Emerald, LLC (‘‘MIAX
Emerald’’ 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 Emerald 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/emerald, 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
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The Exchange proposes to amend
Section 1)a)i) of the Fee Schedule to
amend the Simple Maker (defined
below) rebates in Tier 4 for options
transactions in Penny Classes and nonPenny Classes (defined below) for
executed Priority Customer 3 orders
3 ‘‘Priority Customer’’ means a person or entity
that (i) is not a broker or dealer in securities, and
(ii) does not place more than 390 orders in listed
options per day on average during a calendar month
for its own beneficial account(s). See Exchange Rule
100, including Interpretation and Policy .01.
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when the contra is an Affiliated 4 Market
Maker.5
Background
The Exchange currently assesses
transaction rebates and fees to all
market participants, which are based
upon a threshold tier structure (‘‘Tier’’).
Tiers are determined on a monthly basis
and are based on three alternative
calculation methods, as defined in
Section 1)a)ii) of the Fee Schedule. The
calculation method that results in the
highest Tier achieved by the Member 6
shall apply to all Origin types by the
Member, except the Priority Customer
Origin type. For the Priority Customer
Origin calculation, the Tier applied for
a Member and its Affiliates’ is solely
determined by calculation Method 3, as
defined in Section 1)a)ii) of the Fee
Schedule, titled ‘‘Total Priority
Customer, Maker sides volume, based
on % of CTCV (‘Method 3’).’’ The
monthly volume thresholds for each of
4 ‘‘Affiliate’’ means (i) an affiliate of a Member of
at least 75% common ownership between the firms
as reflected on each firm’s Form BD, Schedule A,
or (ii) the Appointed Market Maker of an Appointed
EEM (or, conversely, the Appointed EEM of an
Appointed Market Maker). An ‘‘Appointed Market
Maker’’ is a MIAX Emerald Market Maker (who
does not otherwise have a corporate affiliation
based upon common ownership with an EEM) that
has been appointed by an EEM and an ‘‘Appointed
EEM’’ is an EEM (who does not otherwise have a
corporate affiliation based upon common
ownership with a MIAX Emerald Market Maker)
that has been appointed by a MIAX Emerald Market
Maker, pursuant to the following process. A MIAX
Emerald Market Maker appoints an EEM and an
EEM appoints a MIAX Emerald Market Maker, for
the purposes of the Fee Schedule, by each
completing and sending an executed Volume
Aggregation Request Form by email to
membership@miaxoptions.com no later than 2
business days prior to the first business day of the
month in which the designation is to become
effective. Transmittal of a validly completed and
executed form to the Exchange along with the
Exchange’s acknowledgement of the effective
designation to each of the Market Maker and EEM
will be viewed as acceptance of the appointment.
The Exchange will only recognize one designation
per Member. A Member may make a designation
not more than once every 12 months (from the date
of its most recent designation), which designation
shall remain in effect unless or until the Exchange
receives written notice submitted 2 business days
prior to the first business day of the month from
either Member indicating that the appointment has
been terminated. Designations will become
operative on the first business day of the effective
month and may not be terminated prior to the end
of the month. Execution data and reports will be
provided to both parties. See the Definitions
Section of the Fee Schedule.
5 ‘‘Market Maker’’ refers to ‘‘Lead Market Maker’’
(‘‘LMM’’), ‘‘Primary Lead Market Maker’’ (‘‘PLMM’’)
and ‘‘Registered Market Maker’’ (‘‘RMM’’),
collectively. See the Definitions Section of the Fee
Schedule and Exchange Rule 100.
6 ‘‘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 the
Definitions Section of the Fee Schedule and
Exchange Rule 100.
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15461
the methods, associated with each Tier,
are calculated as the total monthly
volume executed by the Member in all
options classes on MIAX Emerald in the
relevant Origins and/or applicable
liquidity, not including Excluded
Contracts,7 (as the numerator) expressed
as a percentage of (divided by) Customer
Total Consolidated Volume (‘‘CTCV’’)
(as the denominator). CTCV is
calculated as the total national volume
cleared at The Options Clearing
Corporation (‘‘OCC’’) in the Customer
range in those classes listed on MIAX
Emerald for the month for which fees
apply, excluding volume cleared at the
OCC in the Customer range executed
during the period of time in which the
Exchange experiences an ‘‘Exchange
System Disruption’’ 8 (solely in the
option classes of the affected Matching
Engine).9 In addition, the per contract
transaction rebates and fees shall be
applied retroactively to all eligible
volume once the Tier has been reached
by the Member. Members that place
resting liquidity, i.e., orders on the
MIAX Emerald System, will be assessed
the specified ‘‘maker’’ rebate or fee
(each a ‘‘Maker’’) and Members that
execute against resting liquidity will be
assessed the specified ‘‘taker’’ fee or
rebate (each a ‘‘Taker’’).10 Members are
also assessed lower transaction fees and
smaller rebates for order executions in
standard option classes in the Penny
Interval Program 11 (‘‘Penny Classes’’)
than for order executions in standard
option classes which are not in the
Penny Program (‘‘non-Penny Classes’’),
for which Members will be assessed a
higher transaction fees and larger
rebates.
7 ‘‘Excluded Contracts’’ means any contracts
routed to an away market for execution. See the
Definitions Section of the Fee Schedule.
8 The term ‘‘Exchange System Disruption’’ means
an outage of a Matching Engine or collective
Matching Engines for a period of two consecutive
hour or more, during trading hours. See the
Definitions Section of the Fee Schedule.
9 A ‘‘Matching Engine’’ is a part of the MIAX
Emerald electronic system that processes options
orders and trades on a symbol-by-symbol basis. See
the Definitions Section of the Fee Schedule.
10 For a Priority Customer complex order taking
liquidity in both a Penny class and non-Penny class
against Origins other than Priority Customer, the
Priority Customer order will receive a rebate based
on the Tier achieved.
11 See Securities Exchange Act Release No. 88993
(June 2, 2020), 85 FR 35145 (June 8, 2020) (SR–
EMERALD–2020–05) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
To Amend Exchange Rule 510, Minimum Price
Variations and Minimum Trading Increments, To
Conform the Rule 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) (the ‘‘Penny
Program’’).
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Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Notices
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Proposal
The Exchange proposes to amend
Section 1)a)i) of the Fee Schedule to
amend the Simple Maker rebates in Tier
4 for options transactions in Penny
Classes and non-Penny Classes for
executed Priority Customer orders when
the contra is an Affiliated Market Maker.
Currently, the Exchange provides
Simple Maker rebates of ($0.53) and
($1.05) for executed Priority Customer
orders in Tier 4 in options in Penny
Classes and non-Penny Classes,
respectively, if the contra is not an
Affiliated Market Maker. If the contra is
an Affiliated Market Maker, the
Exchange provides lower Simple Maker
rebates of ($0.49) and ($0.95) for
executed Priority Customer orders in
Tier 4 in options in Penny Classes and
non-Penny Classes, respectively.12 The
lower Simple Maker rebate for an
Affiliated Market Maker transaction for
executed Priority Customer orders in
Tier 4 in options in Penny Classes is
denoted by the symbol ‘‘D’’ following the
table of fees and rebates in Section 1)a)i)
of the Fee Schedule. The lower Simple
Maker rebate for an Affiliated Market
Maker transaction for executed Priority
Customer orders in Tier 4 in options in
non-Penny Classes is denoted by the
symbol ‘‘D’’ following the table of fees
and rebates in Section 1)a)i) of the Fee
Schedule.13
The Exchange now proposes to lower
the Simple Maker rebates in Tier 4 for
options transactions in Penny Classes
and non-Penny Classes for executed
Priority Customer orders when the
contra is an Affiliated Market Maker.
Specifically, the Exchange proposes to
lower the Simple Maker rebate for
executed Priority Customer orders in
options in Penny Classes in Tier 4 from
($0.49) to ($0.43) when the contra is an
Affiliated Market Maker. The Exchange
also proposes to lower the Simple
Maker rebate for executed Priority
Customer orders in options in nonPenny Classes in Tier 4 from ($0.95) to
($0.85) when the contra is an Affiliated
Market Maker. The proposed changes
would be reflected in current footnotes
‘‘D’’ and ‘‘D’’ for Penny and non-Penny
Classes, respectively. Accordingly, the
Exchange proposes to update footnote
‘‘D’’ to now read: ‘‘This Maker rebate is
for executed Priority Customer Simple
Orders when the contra is not an
Affiliated Market Maker. When the
12 See
Fee Schedule, Section 1)a)i), notes ‘‘D’’ and
‘‘D’’. See also Securities Exchange Act Release No.
89927 (September 21, 2020), 85 FR 60498
(September 25, 2020) (SR–EMERALD–2020–07)
(establishing lower Priority Customer Tier 4 Simple
Maker rebates in Penny and non-Penny Classes
when the contra is an Affiliated Market Maker).
13 See id.
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contra is an Affiliated Market Maker,
this Maker rebate for executed Priority
Customer Simple Orders will be
($0.43).’’ The Exchange also proposes to
update footnote ‘‘D’’ to now read: ‘‘This
Maker rebate is for executed Priority
Customer Simple Orders when the
contra is not an Affiliated Market
Maker. When the contra is an Affiliated
Market Maker, this Maker rebate for
executed Priority Customer Simple
Orders will be ($0.85).’’
The purpose of adjusting the specified
Simple Maker rebates is for business
and competitive reasons. In order to
attract order flow, the Exchange initially
set its Maker rebates and Taker fees so
that they were meaningfully higher/
lower than other options exchanges that
operate comparable maker/taker pricing
models.14 The Exchange now believes
that it is appropriate to further adjust
these specified Maker rebates so that
they are more in line with other
exchanges, but will still remain highly
competitive such that they should
enable the Exchange to continue to
attract order flow and maintain market
share.15
Implementation
The proposed changes are effective
beginning March 1, 2022.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 16
in general, and furthers the objectives of
Section 6(b)(4) of the Act,17 in that it is
an equitable allocation of reasonable
dues, fees and other charges among
Exchange members and issuers and
other persons using its facilities, and
6(b)(5) of the Act,18 in that it is designed
to prevent fraudulent and manipulative
acts and practices, promote just and
equitable principles of trade, foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system and, in
14 See Securities Exchange Act Release No. 85393
(March 21, 2019), 84 FR 11599 (March 27, 2019)
(SR–EMERALD–2019–15).
15 See Cboe BZX Options Exchange Fee Schedule,
under ‘‘Transaction Fees’’ (providing Customer
rebates for Penny Program Securities ranging from
$0.25 to $0.53 and Non-Penny Program Securities
ranging from $0.90 to $1.05); see also Nasdaq Stock
Market, Options 7, Pricing Schedule, Section 2
Nasdaq Options Market—Fees and Rebates, note 2
(providing lower rates when the Participant is both
the buyer and seller).
16 15 U.S.C. 78f(b).
17 15 U.S.C. 78f(b)(4).
18 15 U.S.C. 78f(b)(1) and (b)(5).
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general, protect investors and the public
interest.
The Commission has repeatedly
expressed its preference for competition
over regulatory intervention in
determining prices, products, and
services in the securities markets. In
Regulation NMS, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 19
There are currently 16 registered
options exchanges competing for order
flow. Based on publicly-available
information, and excluding index-based
options, no single exchange has a
market share of more than
approximately 13–14% of the equity
options market.20 Therefore, no
exchange possesses significant pricing
power. More specifically, as of February
25, 2022, the Exchange had a market
share of approximately 3.68% of
executed volume of multiply-listed
equity and exchange traded fund
(‘‘ETF’’) options for the month of
February 2022.21
The Exchange believes that the evershifting market share among the
exchanges from month to month
demonstrates that market participants
can discontinue or reduce use of certain
categories of products and services,
terminate an existing membership or
determine to not become a new member,
and/or shift order flow, in response to
transaction fee changes. For example, on
February 28, 2019, the Exchange’s
affiliate, MIAX PEARL, LLC (‘‘MIAX
Pearl’’), filed with the Commission a
proposal to increase Taker fees in
certain Tiers for options transactions in
certain Penny classes for Priority
Customers and decrease Maker rebates
in certain Tiers for options transactions
in Penny classes for Priority Customers
(which fee was to be effective March 1,
2019).22 MIAX Pearl experienced a
decrease in total market share for the
month of March 2019, after the proposal
went into effect. Accordingly, the
Exchange believes that the MIAX Pearl
March 1, 2019 fee change, to increase
certain transaction fees and decrease
certain transaction rebates, may have
19 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496 (June 29, 2005).
20 See ‘‘The Market at a Glance,’’ (last visited
February 25, 2022), available at https://
www.miaxoptions.com/.
21 See id.
22 See Securities Exchange Act Release No. 85304
(March 13, 2019), 84 FR 10144 (March 19, 2019)
(SR–PEARL–2019–07).
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contributed to the decrease in MIAX
Pearl’s market share and, as such, the
Exchange believes competitive forces
constrain the Exchange’s, and other
options exchanges, ability to set
transaction fees and market participants
can shift order flow based on fee
changes instituted by the exchanges.
The Exchange believes its proposal to
decrease the Simple Maker rebates in
Tier 4 for options transactions in Penny
and non-Penny Classes for Priority
Customers is reasonable, equitable and
not unfairly discriminatory because all
similarly situated market participants in
the same Origin type are subject to the
same tiered Maker rebates and Taker
fees and access to the Exchange is
offered on terms that are not unfairly
discriminatory. The Exchange believes
it is equitable and not unfairly
discriminatory to reduce the Simple
Maker rebates to Priority Customer
orders in Penny and non-Penny Classes
for competitive and business reasons
because the Exchange initially set its
Simple Maker rebates for such orders
higher than certain other options
exchanges that operate comparable
maker/taker pricing models.23 The
Exchange now believes that it is
appropriate to further decrease the
specified Simple Maker rebates so that
they are more in line with other
exchanges, and will still remain highly
competitive such that they should
enable the Exchange to continue to
attract order flow and maintain market
share.
Furthermore, the proposed decrease
to the Simple Maker rebates for Priority
Customers promotes just and equitable
principles of trade, fosters cooperation
and coordination with persons engaged
in facilitating transactions in securities,
and protects investors and the public
interest, because even with the decrease,
the Exchange’s proposed Simple Maker
rebates for such orders still remain
highly competitive with certain other
options exchanges offering comparable
pricing models, and should enable the
Exchange to continue to attract order
flow and maintain market share.24 The
Exchange believes that the amount of
such fees, as proposed to be decreased,
will continue to encourage those market
participants to send orders to the
Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule changes will impose
any burden on competition not
23 See
24 See
supra note 15.
id.
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18:27 Mar 17, 2022
necessary or appropriate in furtherance
of the purposes of the Act.
Intra-Market Competition
The Exchange believes that the
proposed changes to the specified
Simple Maker rebates for the applicable
market participants should continue to
encourage the provision of liquidity that
enhances the quality of the Exchange’s
market and increases the number of
trading opportunities on the Exchange
for all participants who will be able to
compete for such opportunities. The
proposed rule change should enable the
Exchange to continue to attract and
compete for order flow with other
exchanges. However, this competition
does not create an undue burden on
competition but rather offers all market
participants the opportunity to receive
the benefit of competitive pricing.
Inter-Market Competition
The Exchange operates in a highly
competitive market in which market
participants can readily favor competing
venues if they deem fee levels at a
particular venue to be excessive. There
are currently 16 registered options
exchanges competing for order flow.
Based on publicly-available
information, and excluding index-based
options, no single exchange has a
market share of more than
approximately 13–14% of the equity
options market.25 Therefore, no
exchange possesses significant pricing
power. More specifically, as of February
25, 2022, the Exchange had a market
share of approximately 3.68% of
executed volume of multiply-listed
equity and ETF options for the month of
February 2022.26 Therefore, no
exchange possesses significant pricing
power in the execution of multiplylisted equity and ETF options order
flow. In such an environment, the
Exchange must continually adjust its
transaction and non-transaction fees to
remain competitive with other
exchanges and to attract order flow. The
Exchange believes that the proposed
rule changes reflect this competitive
environment because it modifies the
Exchange’s rebates in a manner that will
allow the Exchange to remain
competitive.
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.
25 See
26 See
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supra note 20.
id.
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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,27 and Rule
19b–4(f)(2) 28 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–
EMERALD–2022–10 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–EMERALD–2022–10. 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
27 15
28 17
Sfmt 4703
15463
E:\FR\FM\18MRN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
18MRN1
15464
Federal Register / Vol. 87, No. 53 / Friday, March 18, 2022 / Notices
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–EMERALD–2022–10, and
should be submitted on or before April
8, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–05699 Filed 3–17–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Modify the
External Subscriber Fees Applicable to
Cboe One Summary Derived Data API
Service
March 14, 2022.
jspears on DSK121TN23PROD with NOTICES1
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 March 10,
2022, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) 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 BZX Exchange, Inc. (‘‘BZX’’ or
the ‘‘Exchange’’) is filing with the
Securities and Exchange Commission
(the ‘‘Commission’’) a proposed rule
change to modify the External
Subscriber fees applicable to Cboe One
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
18:27 Mar 17, 2022
Jkt 256001
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
[Release No. 34–94408; File No. SR–
CboeBZX–2022–019]
29 17
Summary Derived Data API Service. 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://markets.cboe.com/us/
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
1. Purpose
The Exchange proposes to modify fees
charged to External Distributors that
distribute Cboe One Summary Derived
Data through an Application
Programming Interface (‘‘API’’)—i.e., the
Derived Data API Service, effective
March 1, 2022.3
Background
By way of background, the Exchange
offers a Financial Product Distribution
Program (‘‘Program’’), under which a
Distributor may subscribe to one of
three Derived Data Service options,
White Label Service,4 API Service 5 or
3 The Exchange initially filed the proposed fee
changes on March 1, 2022 (SR–BZX–2022–010). On
March 10, 2022, the Exchange withdrew that filing
and submitted this proposal.
4 A ‘‘White Label Service’’ is a type of hosted
display solution in which a Distributor hosts or
maintains a website or platform on behalf of a thirdparty entity. The service allows Distributors to
make Derived Data available on a platform that is
branded with a third-party brand, or co-branded
with a third party and a Distributor. The Distributor
maintains control of the application’s data,
entitlements and display.
5 An ‘‘API Service’’ is a type of data feed
distribution in which a Distributor delivers an API
or similar distribution mechanism to a third-party
entity for use within one or more platforms. The
service allows Distributors to provide Derived Data
to a third-party entity for use within one or more
downstream platforms that are operated and
maintained by the third-party entity. The
Distributor maintains control of the entitlements,
but does not maintain technical control of the usage
or the display.
PO 00000
Frm 00107
Fmt 4703
Sfmt 4703
Platform Service,6 each of which offers
either BZX Top Data, which is an
uncompressed data feed that offers top
of book quotations and execution
information based on equity orders
entered into the System 7 or Cboe One
Summary Data, which is a proprietary
data product that provides the top of
book quotations and execution
information for all listed equity
securities traded across the Exchange
and its affiliated U.S. equities exchanges
(the ‘‘Cboe equity exchanges’’).8 Under
the Program, regardless of the Service
option selected by a Distributor, the
Distributors receive the same real-time
Exchange data (i.e., BZX Top or Cboe
One Summary) as all other subscribers
of such Exchange data. From the
Exchange data, a Distributor may create
‘‘Derived Data’’, which is pricing data or
other data that (i) is created in whole or
in part from Exchange data, (ii) is not an
index or financial product, and (iii)
cannot be readily reverse-engineered to
recreate Exchange data or used to create
other data that is a reasonable facsimile
or substitute for Exchange data. Derived
Data may be created by Distributors for
a number of different purposes, as
determined by the Distributor. The
specific use of Exchange data is
determined by the Distributor, as
applicable fees do not depend on the
purpose for placing the Derived Data
under the Program.
Cboe One Summary Derived Data API
Service External Subscriber Fees
The Derived Data API Service
program offers discounted fees for
Distributors that make Derived Data
available through an API, thereby
allowing Distributors to benefit from
reduced fees when distributing Derived
Data to subscribers that establish their
own platforms (rather than relying on a
hosted display solution). Instead of the
regular flat fee for External Distribution
of Exchange data, Distributors of
Derived Data under the API Service are
charged a tiered External Subscriber Fee
based on the number of API Service
Platforms (i.e., ‘‘External Subscribers’’)
that receive Derived Data from the
Distributor through a Derived Data API
Service and may benefit from
6 A ‘‘Platform Service’’ is a type of hosted display
solution in which a Distributor provides derivative
products to Platform Service Data Users within
their infrastructure. The service allows Distributors
to make Derived Data available as part of a platform,
providing users remote access to derivative
products based in whole or in part on Exchange
Data.
7 See Exchange Rule 13.8(c).
8 See Exchange Rule 13.8(b). The Cboe One
Summary external distribution fee is equal to the
aggregate EDGX Top, BZX, Top, BYX Top, and
EDGA Top fees external distribution fees.
E:\FR\FM\18MRN1.SGM
18MRN1
]]>Agencies
[Federal Register Volume 87, Number 53 (Friday, March 18, 2022)]
[Notices]
[Pages 15460-15464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-05699]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94406; File No. SR-EMERALD-2022-10]
Self-Regulatory Organizations; MIAX EMERALD, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule
March 14, 2022.
Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 15461]]
notice is hereby given that on February 28, 2022, MIAX Emerald, LLC
(``MIAX Emerald'' 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 Emerald 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/emerald, at MIAX's
principal office, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Section 1)a)i) of the Fee Schedule
to amend the Simple Maker (defined below) rebates in Tier 4 for options
transactions in Penny Classes and non-Penny Classes (defined below) for
executed Priority Customer \3\ orders when the contra is an Affiliated
\4\ Market Maker.\5\
---------------------------------------------------------------------------
\3\ ``Priority Customer'' means a person or entity that (i) is
not a broker or dealer in securities, and (ii) does not place more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See Exchange Rule
100, including Interpretation and Policy .01.
\4\ ``Affiliate'' means (i) an affiliate of a Member of at least
75% common ownership between the firms as reflected on each firm's
Form BD, Schedule A, or (ii) the Appointed Market Maker of an
Appointed EEM (or, conversely, the Appointed EEM of an Appointed
Market Maker). An ``Appointed Market Maker'' is a MIAX Emerald
Market Maker (who does not otherwise have a corporate affiliation
based upon common ownership with an EEM) that has been appointed by
an EEM and an ``Appointed EEM'' is an EEM (who does not otherwise
have a corporate affiliation based upon common ownership with a MIAX
Emerald Market Maker) that has been appointed by a MIAX Emerald
Market Maker, pursuant to the following process. A MIAX Emerald
Market Maker appoints an EEM and an EEM appoints a MIAX Emerald
Market Maker, for the purposes of the Fee Schedule, by each
completing and sending an executed Volume Aggregation Request Form
by email to [email protected] no later than 2 business days
prior to the first business day of the month in which the
designation is to become effective. Transmittal of a validly
completed and executed form to the Exchange along with the
Exchange's acknowledgement of the effective designation to each of
the Market Maker and EEM will be viewed as acceptance of the
appointment. The Exchange will only recognize one designation per
Member. A Member may make a designation not more than once every 12
months (from the date of its most recent designation), which
designation shall remain in effect unless or until the Exchange
receives written notice submitted 2 business days prior to the first
business day of the month from either Member indicating that the
appointment has been terminated. Designations will become operative
on the first business day of the effective month and may not be
terminated prior to the end of the month. Execution data and reports
will be provided to both parties. See the Definitions Section of the
Fee Schedule.
\5\ ``Market Maker'' refers to ``Lead Market Maker'' (``LMM''),
``Primary Lead Market Maker'' (``PLMM'') and ``Registered Market
Maker'' (``RMM''), collectively. See the Definitions Section of the
Fee Schedule and Exchange Rule 100.
---------------------------------------------------------------------------
Background
The Exchange currently assesses transaction rebates and fees to all
market participants, which are based upon a threshold tier structure
(``Tier''). Tiers are determined on a monthly basis and are based on
three alternative calculation methods, as defined in Section 1)a)ii) of
the Fee Schedule. The calculation method that results in the highest
Tier achieved by the Member \6\ shall apply to all Origin types by the
Member, except the Priority Customer Origin type. For the Priority
Customer Origin calculation, the Tier applied for a Member and its
Affiliates' is solely determined by calculation Method 3, as defined in
Section 1)a)ii) of the Fee Schedule, titled ``Total Priority Customer,
Maker sides volume, based on % of CTCV (`Method 3').'' The monthly
volume thresholds for each of the methods, associated with each Tier,
are calculated as the total monthly volume executed by the Member in
all options classes on MIAX Emerald in the relevant Origins and/or
applicable liquidity, not including Excluded Contracts,\7\ (as the
numerator) expressed as a percentage of (divided by) Customer Total
Consolidated Volume (``CTCV'') (as the denominator). CTCV is calculated
as the total national volume cleared at The Options Clearing
Corporation (``OCC'') in the Customer range in those classes listed on
MIAX Emerald for the month for which fees apply, excluding volume
cleared at the OCC in the Customer range executed during the period of
time in which the Exchange experiences an ``Exchange System
Disruption'' \8\ (solely in the option classes of the affected Matching
Engine).\9\ In addition, the per contract transaction rebates and fees
shall be applied retroactively to all eligible volume once the Tier has
been reached by the Member. Members that place resting liquidity, i.e.,
orders on the MIAX Emerald System, will be assessed the specified
``maker'' rebate or fee (each a ``Maker'') and Members that execute
against resting liquidity will be assessed the specified ``taker'' fee
or rebate (each a ``Taker'').\10\ Members are also assessed lower
transaction fees and smaller rebates for order executions in standard
option classes in the Penny Interval Program \11\ (``Penny Classes'')
than for order executions in standard option classes which are not in
the Penny Program (``non-Penny Classes''), for which Members will be
assessed a higher transaction fees and larger rebates.
---------------------------------------------------------------------------
\6\ ``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 the
Definitions Section of the Fee Schedule and Exchange Rule 100.
\7\ ``Excluded Contracts'' means any contracts routed to an away
market for execution. See the Definitions Section of the Fee
Schedule.
\8\ The term ``Exchange System Disruption'' means an outage of a
Matching Engine or collective Matching Engines for a period of two
consecutive hour or more, during trading hours. See the Definitions
Section of the Fee Schedule.
\9\ A ``Matching Engine'' is a part of the MIAX Emerald
electronic system that processes options orders and trades on a
symbol-by-symbol basis. See the Definitions Section of the Fee
Schedule.
\10\ For a Priority Customer complex order taking liquidity in
both a Penny class and non-Penny class against Origins other than
Priority Customer, the Priority Customer order will receive a rebate
based on the Tier achieved.
\11\ See Securities Exchange Act Release No. 88993 (June 2,
2020), 85 FR 35145 (June 8, 2020) (SR-EMERALD-2020-05) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Exchange Rule 510, Minimum Price Variations and Minimum
Trading Increments, To Conform the Rule 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) (the
``Penny Program'').
---------------------------------------------------------------------------
[[Page 15462]]
Proposal
The Exchange proposes to amend Section 1)a)i) of the Fee Schedule
to amend the Simple Maker rebates in Tier 4 for options transactions in
Penny Classes and non-Penny Classes for executed Priority Customer
orders when the contra is an Affiliated Market Maker. Currently, the
Exchange provides Simple Maker rebates of ($0.53) and ($1.05) for
executed Priority Customer orders in Tier 4 in options in Penny Classes
and non-Penny Classes, respectively, if the contra is not an Affiliated
Market Maker. If the contra is an Affiliated Market Maker, the Exchange
provides lower Simple Maker rebates of ($0.49) and ($0.95) for executed
Priority Customer orders in Tier 4 in options in Penny Classes and non-
Penny Classes, respectively.\12\ The lower Simple Maker rebate for an
Affiliated Market Maker transaction for executed Priority Customer
orders in Tier 4 in options in Penny Classes is denoted by the symbol
``[ssquf]'' following the table of fees and rebates in Section 1)a)i)
of the Fee Schedule. The lower Simple Maker rebate for an Affiliated
Market Maker transaction for executed Priority Customer orders in Tier
4 in options in non-Penny Classes is denoted by the symbol ``[ssquf]''
following the table of fees and rebates in Section 1)a)i) of the Fee
Schedule.\13\
---------------------------------------------------------------------------
\12\ See Fee Schedule, Section 1)a)i), notes ``[ssquf]'' and
``[ssquf]''. See also Securities Exchange Act Release No. 89927
(September 21, 2020), 85 FR 60498 (September 25, 2020) (SR-EMERALD-
2020-07) (establishing lower Priority Customer Tier 4 Simple Maker
rebates in Penny and non-Penny Classes when the contra is an
Affiliated Market Maker).
\13\ See id.
---------------------------------------------------------------------------
The Exchange now proposes to lower the Simple Maker rebates in Tier
4 for options transactions in Penny Classes and non-Penny Classes for
executed Priority Customer orders when the contra is an Affiliated
Market Maker. Specifically, the Exchange proposes to lower the Simple
Maker rebate for executed Priority Customer orders in options in Penny
Classes in Tier 4 from ($0.49) to ($0.43) when the contra is an
Affiliated Market Maker. The Exchange also proposes to lower the Simple
Maker rebate for executed Priority Customer orders in options in non-
Penny Classes in Tier 4 from ($0.95) to ($0.85) when the contra is an
Affiliated Market Maker. The proposed changes would be reflected in
current footnotes ``[ssquf]'' and ``[ssquf]'' for Penny and non-Penny
Classes, respectively. Accordingly, the Exchange proposes to update
footnote ``[ssquf]'' to now read: ``This Maker rebate is for executed
Priority Customer Simple Orders when the contra is not an Affiliated
Market Maker. When the contra is an Affiliated Market Maker, this Maker
rebate for executed Priority Customer Simple Orders will be ($0.43).''
The Exchange also proposes to update footnote ``[ssquf]'' to now read:
``This Maker rebate is for executed Priority Customer Simple Orders
when the contra is not an Affiliated Market Maker. When the contra is
an Affiliated Market Maker, this Maker rebate for executed Priority
Customer Simple Orders will be ($0.85).''
The purpose of adjusting the specified Simple Maker rebates is for
business and competitive reasons. In order to attract order flow, the
Exchange initially set its Maker rebates and Taker fees so that they
were meaningfully higher/lower than other options exchanges that
operate comparable maker/taker pricing models.\14\ The Exchange now
believes that it is appropriate to further adjust these specified Maker
rebates so that they are more in line with other exchanges, but will
still remain highly competitive such that they should enable the
Exchange to continue to attract order flow and maintain market
share.\15\
---------------------------------------------------------------------------
\14\ See Securities Exchange Act Release No. 85393 (March 21,
2019), 84 FR 11599 (March 27, 2019) (SR-EMERALD-2019-15).
\15\ See Cboe BZX Options Exchange Fee Schedule, under
``Transaction Fees'' (providing Customer rebates for Penny Program
Securities ranging from $0.25 to $0.53 and Non-Penny Program
Securities ranging from $0.90 to $1.05); see also Nasdaq Stock
Market, Options 7, Pricing Schedule, Section 2 Nasdaq Options
Market--Fees and Rebates, note 2 (providing lower rates when the
Participant is both the buyer and seller).
---------------------------------------------------------------------------
Implementation
The proposed changes are effective beginning March 1, 2022.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \16\ in general, and
furthers the objectives of Section 6(b)(4) of the Act,\17\ in that it
is an equitable allocation of reasonable dues, fees and other charges
among Exchange members and issuers and other persons using its
facilities, and 6(b)(5) of the Act,\18\ in that it is designed to
prevent fraudulent and manipulative acts and practices, promote just
and equitable principles of trade, foster cooperation and coordination
with persons engaged in facilitating transactions in securities, remove
impediments to and perfect the mechanisms of a free and open market and
a national market system and, in general, protect investors and the
public interest.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(4).
\18\ 15 U.S.C. 78f(b)(1) and (b)(5).
---------------------------------------------------------------------------
The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. In Regulation NMS,
the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \19\
---------------------------------------------------------------------------
\19\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005).
---------------------------------------------------------------------------
There are currently 16 registered options exchanges competing for
order flow. Based on publicly-available information, and excluding
index-based options, no single exchange has a market share of more than
approximately 13-14% of the equity options market.\20\ Therefore, no
exchange possesses significant pricing power. More specifically, as of
February 25, 2022, the Exchange had a market share of approximately
3.68% of executed volume of multiply-listed equity and exchange traded
fund (``ETF'') options for the month of February 2022.\21\
---------------------------------------------------------------------------
\20\ See ``The Market at a Glance,'' (last visited February 25,
2022), available at https://www.miaxoptions.com/.
\21\ See id.
---------------------------------------------------------------------------
The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
discontinue or reduce use of certain categories of products and
services, terminate an existing membership or determine to not become a
new member, and/or shift order flow, in response to transaction fee
changes. For example, on February 28, 2019, the Exchange's affiliate,
MIAX PEARL, LLC (``MIAX Pearl''), filed with the Commission a proposal
to increase Taker fees in certain Tiers for options transactions in
certain Penny classes for Priority Customers and decrease Maker rebates
in certain Tiers for options transactions in Penny classes for Priority
Customers (which fee was to be effective March 1, 2019).\22\ MIAX Pearl
experienced a decrease in total market share for the month of March
2019, after the proposal went into effect. Accordingly, the Exchange
believes that the MIAX Pearl March 1, 2019 fee change, to increase
certain transaction fees and decrease certain transaction rebates, may
have
[[Page 15463]]
contributed to the decrease in MIAX Pearl's market share and, as such,
the Exchange believes competitive forces constrain the Exchange's, and
other options exchanges, ability to set transaction fees and market
participants can shift order flow based on fee changes instituted by
the exchanges.
---------------------------------------------------------------------------
\22\ See Securities Exchange Act Release No. 85304 (March 13,
2019), 84 FR 10144 (March 19, 2019) (SR-PEARL-2019-07).
---------------------------------------------------------------------------
The Exchange believes its proposal to decrease the Simple Maker
rebates in Tier 4 for options transactions in Penny and non-Penny
Classes for Priority Customers is reasonable, equitable and not
unfairly discriminatory because all similarly situated market
participants in the same Origin type are subject to the same tiered
Maker rebates and Taker fees and access to the Exchange is offered on
terms that are not unfairly discriminatory. The Exchange believes it is
equitable and not unfairly discriminatory to reduce the Simple Maker
rebates to Priority Customer orders in Penny and non-Penny Classes for
competitive and business reasons because the Exchange initially set its
Simple Maker rebates for such orders higher than certain other options
exchanges that operate comparable maker/taker pricing models.\23\ The
Exchange now believes that it is appropriate to further decrease the
specified Simple Maker rebates so that they are more in line with other
exchanges, and will still remain highly competitive such that they
should enable the Exchange to continue to attract order flow and
maintain market share.
---------------------------------------------------------------------------
\23\ See supra note 15.
---------------------------------------------------------------------------
Furthermore, the proposed decrease to the Simple Maker rebates for
Priority Customers promotes just and equitable principles of trade,
fosters cooperation and coordination with persons engaged in
facilitating transactions in securities, and protects investors and the
public interest, because even with the decrease, the Exchange's
proposed Simple Maker rebates for such orders still remain highly
competitive with certain other options exchanges offering comparable
pricing models, and should enable the Exchange to continue to attract
order flow and maintain market share.\24\ The Exchange believes that
the amount of such fees, as proposed to be decreased, will continue to
encourage those market participants to send orders to the Exchange.
---------------------------------------------------------------------------
\24\ See id.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes 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 proposed changes to the specified
Simple Maker rebates for the applicable market participants should
continue to encourage the provision of liquidity that enhances the
quality of the Exchange's market and increases the number of trading
opportunities on the Exchange for all participants who will be able to
compete for such opportunities. The proposed rule change should enable
the Exchange to continue to attract and compete for order flow with
other exchanges. However, this competition does not create an undue
burden on competition but rather offers all market participants the
opportunity to receive the benefit of competitive pricing.
Inter-Market Competition
The Exchange operates in a highly competitive market in which
market participants can readily favor competing venues if they deem fee
levels at a particular venue to be excessive. There are currently 16
registered options exchanges competing for order flow. Based on
publicly-available information, and excluding index-based options, no
single exchange has a market share of more than approximately 13-14% of
the equity options market.\25\ Therefore, no exchange possesses
significant pricing power. More specifically, as of February 25, 2022,
the Exchange had a market share of approximately 3.68% of executed
volume of multiply-listed equity and ETF options for the month of
February 2022.\26\ Therefore, no exchange possesses significant pricing
power in the execution of multiply-listed equity and ETF options order
flow. In such an environment, the Exchange must continually adjust its
transaction and non-transaction fees to remain competitive with other
exchanges and to attract order flow. The Exchange believes that the
proposed rule changes reflect this competitive environment because it
modifies the Exchange's rebates in a manner that will allow the
Exchange to remain competitive.
---------------------------------------------------------------------------
\25\ See supra note 20.
\26\ See id.
---------------------------------------------------------------------------
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,\27\ and Rule 19b-4(f)(2) \28\ 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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\27\ 15 U.S.C. 78s(b)(3)(A)(ii).
\28\ 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-EMERALD-2022-10 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-EMERALD-2022-10. 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
[[Page 15464]]
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-
EMERALD-2022-10, and should be submitted on or before April 8, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
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\29\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-05699 Filed 3-17-22; 8:45 am]
BILLING CODE 8011-01-P
