Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend MRX Options 7, Section 6, 79924-79930 [2022-28199]
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Federal Register / Vol. 87, No. 248 / Wednesday, December 28, 2022 / Notices
assigned duties. The Commission
believes that the proposed clarifications
to ICC’s rules would improve
transparency and readability by
avoiding unnecessary repetition and
duplication in the Treasury Policy,
which could help avoid confusion and
potential future inconsistencies between
policies. The Commission therefore
believes that, by unifying and
expanding the detail in the CRMF for
the collateral assets risk management
methodology in the CRMF, the proposed
rule change would promote the prompt
and accurate clearance and settlement of
securities transactions, consistent with
Section 17A(b)(3)(F) of the Act.11
ddrumheller on DSK6VXHR33PROD with NOTICES
B. Consistency With Rule 17Ad–
22(e)(2)(i) and (v)
Rules 17Ad–22(e)(2)(i) and (v) 12
require ICC to establish, implement,
maintain, and enforce written policies
and procedures reasonably designed to
provide for governance arrangements
that are clear and transparent and
specify clear and direct lines of
responsibility. As discussed above, the
proposed changes strengthen the
governance procedures related to ICC’s
collateral assets risk management
approach by memorializing associated
governance processes and procedures in
the CRMF. The CRMF details
governance procedures associated with
haircut factor updates, implementation,
and review, including the responsible
ICC personnel, department, group, or
committee. The Commission therefore
believes the proposed rule change
should help ensure that ICC maintains
policies and procedures that are
reasonably designed to provide for clear
and transparent governance
arrangements and specify clear and
direct lines of responsibility, consistent
with Rule 17Ad–22(e)(2)(i) and (v).13
C. Consistency With Rule 17Ad–22(e)(5)
Rule 17Ad–22(e)(5) 14 requires ICC to
establish, implement, maintain, and
enforce written policies and procedures
reasonably designed to limit the assets
it accepts as collateral to those with low
credit, liquidity, and market risks, and
set and enforce appropriately
conservative haircuts and concentration
limits if the covered clearing agency
requires collateral to manage its or its
participants’ credit exposure; and
require a review of the sufficiency of its
collateral haircuts and concentration
limits to be performed not less than
annually. ICC’s proposed changes
11 15
U.S.C. 78q–1(b)(3)(F).
12 17 CFR 240.17Ad–22(e)(2)(i) and (v).
13 Id.
14 17 CFR 240.17Ad–22(e)(5).
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would not change which assets it
accepts as collateral. In addition to ICC’s
existing collateral requirements, the
CRMF would provide a framework for
setting and enforcing collateral haircuts.
The Commission believes the additional
procedures defined in Section III of the
CRMF would help ensure that ICC
establishes, reviews, and updates
haircuts within defined intervals, and
more frequently if deemed necessary. As
described above, collateral haircut factor
estimations are executed daily, and the
ICC Risk Department reviews the results
and determines at least monthly
whether it will made any updates to
collateral haircuts. Haircut factors can
be updated more frequently at the
discretion of the CRO or designee. The
Commission therefore finds the
proposed rule change is consistent with
Rule 17Ad–22(e)(5).15
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act, and in
particular, with the requirements of
Section 17A(b)(3)(F) of the Act 16 and
Rules 17Ad–22(e)(2)(i) and (v) and
17Ad–22(e)(5) thereunder.17
It is therefore ordered pursuant to
Section 19(b)(2) of the Act 18 that the
proposed rule change (SR–ICC–2022–
013), be, and hereby is, approved.19
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–28195 Filed 12–27–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96564; File No. SR–MRX–
2022–28]
Self-Regulatory Organizations; Nasdaq
MRX, LLC; Notice of Withdrawal of
Proposed Rule Change To Amend
Options 7, Section 6 To Add Port Fees
December 21, 2022.
On December 8, 2022, Nasdaq MRX,
LLC (‘‘MRX’’) filed with the Securities
and Exchange Commission
15 Id.
16 15
17 17
U.S.C. 78q–1(b)(3)(F).
CFR 240.17Ad–22(e)(2)(i), (e)(2)(v), and
(e)(5).
18 15 U.S.C. 78s(b)(2).
19 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
20 17 CFR 200.30–3(a)(12).
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(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 1 and Rule 19b–4 thereunder,2 a
proposed rule change to assess port fees.
On December 16, 2022, MRX
withdrew the proposed rule change
(SR–MRX–2022–28).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.3
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–28200 Filed 12–27–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96563; File No. SR–MRX–
2022–29]
Self-Regulatory Organizations; Nasdaq
MRX, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend MRX Options
7, Section 6
December 21, 2022.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
16, 2022, Nasdaq MRX, LLC (‘‘MRX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
MRX’s Pricing Schedule at Options 7,
Section 6.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/mrx/rules, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
2 17
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Federal Register / Vol. 87, No. 248 / Wednesday, December 28, 2022 / Notices
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
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1. Purpose
MRX proposes to amend its Pricing
Schedule at Options 7, Section 6, Ports
and Other Services, to assess port fees,
which were not assessed until this year.
Prior to this year, MRX did not assess
its Members any port fees. MRX
launched its options market in 2016 3
and Members did not pay any port fees
until 2022.
Newly-opened exchanges often charge
no fees for certain services, such as
ports, in order to attract order flow to an
exchange, and later amend their fees to
charge for those services.4 The proposed
port fees within Options 7, Section 6,
Ports and Other Services, are described
below.
The Exchange proposes to amend fees
for the following ports within Options 7,
Section 6: (1) FIX,5 (2) SQF; 6 (3) SQF
3 The Exchange initially filed the proposed
pricing changes on May 2, 2022 (SR–MRX–2022–
04) instituting fees for membership, ports and
market data. On June 29, 2022, the Exchange
withdrew that filing, and submitted separate filings
for membership, ports and market data. SR–MRX–
2022–06 replaced the port fees set forth in SR–
MRX–2022–04. On July 1, 2022, SR–MRX–2022–06
was withdrawn and replaced with SR–MRX–2022–
09. On August 25, 2022, SR–MRX–2022–09 was
withdrawn and replaced with SR–MRX–2022–12.
On October 11, 2022, SR–MRX–2022–12 was
withdrawn and replaced with SR–MRX–2022–20.
On December 8, 2022, SR–MRX–2022–20 was
withdrawn and replaced with SR–MRX–2022–28.
The instant filing replaces SR–MRX–2022–28
which was withdrawn on December 16, 2022.
4 See, e.g., Securities Exchange Act Release No
90076 (October 2, 2020), 85 FR 63620 (October 8,
2020) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change To Adopt the Initial Fee
Schedule and Other Fees for MEMX LLC).
5 ‘‘Financial Information eXchange’’ or ‘‘FIX’’ is
an interface that allows Members and their
Sponsored Customers to connect, send, and receive
messages related to orders and auction orders to the
Exchange. Features include the following: (1)
execution messages; (2) order messages; (3) risk
protection triggers and cancel notifications; and (4)
post trade allocation messages. See Supplementary
Material .03(a) to Options 3, Section 7.
6 ‘‘Specialized Quote Feed’’ or ‘‘SQF’’ is an
interface that allows Market Makers to connect,
send, and receive messages related to quotes,
Immediate-or-Cancel Orders, and auction responses
to the Exchange. Features include the following: (1)
options symbol directory messages (e.g., underlying
and complex instruments); (2) system event
messages (e.g., start of trading hours messages and
start of opening); (3) trading action messages (e.g.,
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Purge; 7 (4) OTTO; 8 (5) CTI; 9 (6) FIX
DROP; 10 and Disaster Recovery Ports.11
Currently, no fees are being assessed for
these ports.
The Exchange proposes to assess no
fee for the first FIX Port obtained by an
halts and resumes); (4) execution messages; (5)
quote messages; (6) Immediate-or-Cancel Order
messages; (7) risk protection triggers and purge
notifications; (8) opening imbalance messages; (9)
auction notifications; and (10) auction responses.
The SQF Purge Interface only receives and notifies
of purge requests from the Market Maker. Market
Makers may only enter interest into SQF in their
assigned options series. See Supplementary
Material .03(c) to Options 3, Section 7.
7 SQF Purge is a specific port for the SQF
interface that only receives and notifies of purge
requests from the Market Maker. Dedicated SQF
Purge Ports enable Market Makers to seamlessly
manage their ability to remove their quotes in a
swift manner. The SQF Purge Port is designed to
assist Market Makers in the management of, and
risk control over, their quotes. Market Makers may
utilize a purge port to reduce uncertainty and to
manage risk by purging all quotes in their assigned
options series. Of note, Market Makers may only
enter interest into SQF in their assigned options
series. Additionally, the SQF Purge Port may be
utilized by a Market Maker in the event that the
Member has a system issue and determines to purge
its quotes from the order book.
8 ‘‘Ouch to Trade Options’’ or ‘‘OTTO’’ is an
interface that allows Members and their Sponsored
Customers to connect, send, and receive messages
related to orders, auction orders, and auction
responses to the Exchange. Features include the
following: (1) options symbol directory messages
(e.g., underlying and complex instruments); (2)
system event messages (e.g., start of trading hours
messages and start of opening); (3) trading action
messages (e.g., halts and resumes); (4) execution
messages; (5) order messages; (6) risk protection
triggers and cancel notifications; (7) auction
notifications; (8) auction responses; and (9) post
trade allocation messages. See Supplementary
Material .03(b) to Options 3, Section 7. Unlike FIX,
which offers routing capability, OTTO does not
permit routing.
9 Clearing Trade Interface (‘‘CTI’’) is a real-time
cleared trade update message that is sent to a
Member after an execution has occurred and
contains trade details specific to that Member. The
information includes, among other things, the
following: (i) The Clearing Member Trade
Agreement (‘‘CMTA’’) or The Options Clearing
Corporation (‘‘OCC’’) number; (ii) badge or
mnemonic; (iii) account number; (iv) information
which identifies the transaction type (e.g., auction
type) for billing purposes; and (v) market
participant capacity. See Options 3, Section
23(b)(1). CTI Ports are not required for an MRX
Member to meet its regulatory obligations. Members
receive free daily reports listing trade executions
from the Exchange.
10 FIX DROP is a real-time order and execution
update message that is sent to a Member after an
order been received/modified or an execution has
occurred and contains trade details specific to that
Member. The information includes, among other
things, the following: (i) executions; (ii)
cancellations; (iii) modifications to an existing
order; and (iv) busts or post-trade corrections. See
Options 3, Section 23(b)(3). FIX DROP Ports are not
required for an MRX Member to meet its regulatory
obligations. Members receive free daily reports
listing open orders and trade executions from the
Exchange.
11 Disaster Recovery ports provide connectivity to
the Exchange’s disaster recovery data center, to be
utilized in the event the Exchange should failover
during a trading day.
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79925
Electronic Access Member 12 or the first
SQF Port obtained by a Market Maker.13
The Exchange proposes to assess a FIX
Port Fee of $650 per port, per month,
per account number 14 for each
subsequent port beyond the first port.
The Exchange proposes to assess an
SQF Port Fee of $1,250 per port, per
month for each subsequent port beyond
the first port.15 The Exchange proposes
to assess an SQF Purge Port Fee of
$1,250 per port, per month. The
Exchange proposes to assess an OTTO
Port Fee of $650 per port, per month,
per account number. The Exchange
proposes to assess a CTI Port Fee and a
FIX Drop Port Fee of $650 per port, per
month.
The Exchange proposes to assess no
fee for the first FIX Disaster Recovery
Port obtained by an Electronic Access
Member 16 or the first SQF Disaster
12 The first FIX Port would be provided to each
Electronic Access Member. The term ‘‘Electronic
Access Member’’ or ‘‘EAM’’ means a Member that
is approved to exercise trading privileges associated
with EAM Rights. See General 1, Section 1(a)(6).
Also, the first SQF Port would be provided to each
Market Maker. The term ‘‘Market Makers’’ refers to
‘‘Competitive Market Makers’’ and ‘‘Primary Market
Makers’’ collectively. See Options 1, Section
1(a)(21). The term ‘‘Competitive Market Maker’’
means a Member that is approved to exercise
trading privileges associated with CMM Rights. See
Options 1, Section 1(a)(12). The term ‘‘Primary
Market Maker’’ means a Member that is approved
to exercise trading privileges associated with PMM
Rights. See Options 1, Section 1(a)(35).
13 The first SQF Port would be provided to each
Market Maker. The term ‘‘Market Makers’’ refers to
‘‘Competitive Market Makers’’ and ‘‘Primary Market
Makers’’ collectively. See Options 1, Section
1(a)(21). The term ‘‘Competitive Market Maker’’
means a Member that is approved to exercise
trading privileges associated with CMM Rights. See
Options 1, Section 1(a)(12). The term ‘‘Primary
Market Maker’’ means a Member that is approved
to exercise trading privileges associated with PMM
Rights. See Options 1, Section 1(a)(35).
14 An ‘‘account number’’ shall mean a number
assigned to a Member. Members may have more
than one account number. See Options 1, Section
1(a)(1). Account numbers are free on MRX.
15 SQF’s Port Fees are assessed a higher dollar fee
as compared to FIX and OTTO ports ($1,250 vs.
$650) because the Exchange has to maintain options
assignments within SQF and manage quoting
traffic. Market Makers may utilize SQF Ports in
their assigned options series. Market Maker badges
are assigned to specific SQF ports to manage the
option series in which a Market Maker may quote.
Additionally, because of quoting obligations
provided for within Options 2, Section 5, Market
Makers are required to provide liquidity in their
assigned options series which generates quote
traffic. The Exchange notes because of the higher
fee, SQF ports are billed per port, per month while
FIX and OTTO ports are billed per port, per month,
per account number. Members may have more than
one account number.
16 The first FIX Port would be provided to each
Electronic Access Member. The term ‘‘Electronic
Access Member’’ or ‘‘EAM’’ means a Member that
is approved to exercise trading privileges associated
with EAM Rights. See General 1, Section 1(a)(6).
Also, the first SQF Port would be provided to each
Market Maker. The term ‘‘Market Makers’’ refers to
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Recovery Port obtained by a Market
Maker.17 The Exchange proposes to
assess each additional FIX Disaster
Recovery Port and each additional SQF
Disaster Recovery Port a fee of $50 per
port, per month, per account number.
Additionally, the Exchange proposes to
assess a Disaster Recovery Fee for SQF
Purge and OTTO Ports of $50 per port,
per month, per account number. Finally,
the Exchange proposes to assess a
Disaster Recovery Fee for CTI Ports and
FIX DROP Ports of $50 per port, per
month.
The OTTO Port, CTI Port, FIX Port,
FIX Drop Port and all Disaster Recovery
Ports 18 are available to all Electronic
Access Members, and will be subject to
a monthly cap of $7,500.
The SQF Port and the SQF Purge Port
are available to all Market Makers, and
will be subject to a monthly cap of
$17,500.19
The Exchange is not amending the
Nasdaq MRX Depth of Market, Nasdaq
MRX Order Feed, Nasdaq MRX Top
Quote Feed, Nasdaq MRX Trades Feed,
or Nasdaq MRX Spread Feed Ports; all
of these aforementioned ports will
continue to be assessed no fees.
Additionally, as is the case today, the
Disaster Recovery Ports for the Nasdaq
MRX Depth of Market, Nasdaq MRX
Order Feed, Nasdaq MRX Top Quote
Feed, Nasdaq MRX Trades Feed and
Nasdaq MRX Spread Feed Ports will not
be assessed a fee.
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Order and Quote Entry Protocols
Only one FIX order protocol is
required for an MRX Member to submit
orders into MRX and to meet its
regulatory requirements.20 The
‘‘Competitive Market Makers’’ and ‘‘Primary Market
Makers’’ collectively. See Options 1, Section
1(a)(21). The term ‘‘Competitive Market Maker’’
means a Member that is approved to exercise
trading privileges associated with CMM Rights. See
Options 1, Section 1(a)(12). The term ‘‘Primary
Market Maker’’ means a Member that is approved
to exercise trading privileges associated with PMM
Rights. See Options 1, Section 1(a)(35).
17 The first SQF Port would be provided to each
Market Maker. The term ‘‘Market Makers’’ refers to
‘‘Competitive Market Makers’’ and ‘‘Primary Market
Makers’’ collectively. See Options 1, Section
1(a)(21). The term ‘‘Competitive Market Maker’’
means a Member that is approved to exercise
trading privileges associated with CMM Rights. See
Options 1, Section 1(a)(12). The term ‘‘Primary
Market Maker’’ means a Member that is approved
to exercise trading privileges associated with PMM
Rights. See Options 1, Section 1(a)(35).
18 This includes FIX, SQF, SQF Purge, OTTO, CTI
and FIX Drop Disaster Recovery Ports.
19 Only Market Makers may quote on MRX. The
Exchange is proposing non-substantive technical
amendments to add commas within the
‘‘Production’’ column of the proposed rule text to
separate terms.
20 MRX Members have trade-through
requirements under Regulation NMS as well as
broker-dealers’ best execution obligations.
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Exchange will provide each Electronic
Access Member 21 the first FIX Port at
no cost to submit orders into MRX. Only
one account number is necessary to
transact an options business on MRX
and account numbers are available to
Members at no cost.
Only one SQF quote protocol is
required for an MRX Market Maker to
submit quotes into MRX and to meet its
regulatory requirements.22 The
Exchange will provide each Market
Maker the first SQF Port at no cost to
submit quotes into MRX. A quoting
protocol, such as SQF, is only required
to the extent an MRX Member has been
appointed as a Market Maker in an
options series pursuant to Options 2,
Section 1.
Only MRX Members may utilize ports
on MRX. Any market participant that
sends orders to a Member would not
need to utilize a port. The Member can
send all orders, proprietary and agency,
through one port to MRX. Members may
elect to obtain multiple account
numbers to organize their business,
however only one account number and
one port for orders and one port for
quotes is necessary for a Member to
trade on MRX. All other ports offered by
MRX are not required for an MRX
Member to meet its regulatory
obligations.
MRX also offers an OTTO protocol.23
MRX Members utilizing the first FIX
Port offered at no cost do not need to
purchase an OTTO Port to meet their
regulatory obligations.
Further, while only one FIX protocol
is necessary to submit orders into MRX,
Members may choose to purchase a
greater number of order entry ports,
depending on that Member’s business
model.24 To the extent that Electronic
Access Members chose to utilize more
than one FIX Port, the Electronic Access
Member would be assessed $650 per
port, per month, per account number for
each subsequent port beyond the first
port. To the extent that Market Makers
chose to utilize more than one SQF Port,
the Market Maker would be assessed
$1,250 per port, per month for each
subsequent port beyond the first port.
Additionally, to the extent a Member
expended more than $7,500 for FIX
21 A Market Maker would receive both a FIX Port
and an SQF Port.
22 MRX Market Makers have intra-day quoting
requirements. See Options 2, Section 5(e).
Additionally, PMMs must submit a Valid Width
Quote each day to open their assigned options
series. See Options 3, Section 8(c)(1) and 8(c)(3).
23 See note 8, supra.
24 For example, a Member may desire to utilize
multiple FIX or OTTO Ports for accounting
purposes, to measure performance, for regulatory
reasons or other determinations that are specific to
that Member.
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Ports or more than $17,500 for SQF
Ports, the Exchange would not charge an
MRX Member for additional FIX or SQF
Ports, respectively, beyond the cap.
Other Protocols
The Exchange’s proposal to offer an
SQF Purge Port 25 for $1,250 per port,
per month is not required for an MRX
Member to meet its regulatory
obligations.
Disaster Recovery Ports
With respect to Disaster Recovery
Ports, the Exchange proposes to assess
no fee for the first FIX Disaster Recovery
Port obtained by an Electronic Access
Member or the first SQF Disaster
Recovery Port obtained by a Market
Maker. The Exchange proposes to assess
no fees for these ports to provide
Members with continuous access to
MRX in the event of a failover at no
cost. Electronic Access Members only
require one FIX Disaster Recovery Port
to submit orders in the event of a
failover. Market Makers only require
one SQF Disaster Recovery Port to
submit quotes in the event of a failover.
Electronic Access Members may elect to
purchase additional FIX Disaster
Recovery Ports for $50 per port, per
month, per account number. Market
Makers may elect to purchase additional
SQF Disaster Recovery Ports for $50 per
port, per month, per account number.
The additional FIX and SQF Disaster
Recovery Ports are not necessary to
connect to the Exchange in the event of
a failover because the Exchange has
provided Members with a FIX Disaster
Recovery Port and an SQF Disaster
Recovery Port at no cost. Additional FIX
and SQF Disaster Recovery Ports are not
necessary for an MRX Member to meet
its regulatory obligations.26
The Exchange’s proposal to offer
Disaster Recovery Ports for SQF Purge
Ports and OTTO Ports for $50 per port,
per month, per account number and
Disaster Recovery Ports for CTI Ports
and FIX DROP Ports for $50 per port,
per month is not required for an MRX
Member to meet its regulatory
obligations. The proposed Disaster
Recovery Port fees are intended to
encourage Members to be efficient when
purchasing Disaster Recovery Ports.
Finally, in the event that an MRX
Member elects to subscribe to multiple
ports, the Exchange offers a monthly cap
beyond which a Member would be
assessed no additional port fees in a
given month. As noted above, the SQF
Port and the SQF Purge Port are subject
to a monthly cap of $17,500 and the
25 See
26 See
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note 7, supra.
General 2, Section 12(b).
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OTTO Port, CTI Port, FIX Port, FIX Drop
Port and all Disaster Recovery Ports are
subject to a monthly cap of $7,500.
These different protocols are not all
necessary to conduct business on MRX;
a Member may choose among protocols
based on their business workflow. The
Exchange’s proposal to offer the first
FIX and SQF Port at no cost as well as
the first FIX and SQF Disaster Recovery
Ports at no cost would allow MRX
Members to submit orders and quotes
into MRX at no cost while meeting their
regulatory obligations.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,27 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,28 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among members and issuers and other
persons using any facility, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
MRX proposes to amend its Pricing
Schedule at Options 7, Section 6, Ports
and Other Services, to assess port fees,
which were not assessed until this year.
Prior to this year, MRX did not assess
its Members any port fees. MRX
launched its options market in 2016 29
and Members did not pay any port fees
until 2022. Of the 16 operating options
exchanges, MRX has the smallest market
share at 1.37% as of November 2022.
The Exchange notes that, as of May 2,
2022, one MRX Member, who was also
a Market Maker, cancelled all of their
ports (1 SQF Port and 1 OTTO Port) to
avoid being assessed any MRX port
fees.30 As of July 1, 2022, the Exchange
did not assess MRX Members for their
first SQF Port or FIX Port. Further, in
October 2022, an additional MRX
27 See
15 U.S.C. 78f(b).
15 U.S.C. 78f(b)(4) and (5).
29 The Exchange initially filed the proposed
pricing changes on May 2, 2022 (SR–MRX–2022–
04) instituting fees for membership, ports and
market data. On June 29, 2022, the Exchange
withdrew that filing, and submitted separate filings
for membership, ports and market data. SR–MRX–
2022–06 replaced the port fees set forth in SR–
MRX–2022–04. On July 1, 2022, SR–MRX–2022–06
was withdrawn and replaced with SR–MRX–2022–
09. On August 25, 2022, SR–MRX–2022–09 was
withdrawn and replaced with SR–MRX–2022–12.
On October 11, 2022, SR–MRX–2022–12 was
withdrawn and replaced with SR–MRX–2022–20.
On December 8, 2022, SR–MRX–2022–20 was
withdrawn and replaced with SR–MRX–2022–28.
The instant filing replaces SR–MRX–2022–28
which was withdrawn on December 16, 2022.
30 MRX originally filed to assess a fee for all FIX
Ports.
ddrumheller on DSK6VXHR33PROD with NOTICES
28 See
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18:26 Dec 27, 2022
Jkt 259001
Member, who is also a Market Maker,
cancelled 3 SQF Ports.31
Proposed Port Fees Are Reasonable,
Equitable and Not Unfairly
Discriminatory
Only one FIX order protocol is
required for an MRX Member to submit
orders into MRX and to meet its
regulatory requirements 32 at no cost
while meeting its regulatory
requirements. The Exchange will
provide each Electronic Access Member
the first FIX Port at no cost to submit
orders into MRX. Only one account
number is necessary to transact an
options business on MRX and account
numbers are available to Members at no
cost.
Only one SQF quote protocol is
required for an MRX Market Maker to
submit quotes into MRX and to meet its
regulatory requirements 33 at no cost
while meeting its regulatory
requirements. The Exchange will
provide each Market Maker the first
SQF Port at no cost to submit quotes
into MRX. A quoting protocol, such as
SQF, is only required to the extent an
MRX Member has been appointed as a
Market Maker in an options series
pursuant to Options 2, Section 1.
The Exchange proposes to offer the
first FIX and SQF Port at no cost in
addition to the first FIX Disaster
Recovery Port and the first SQF Disaster
Recovery Port at no cost to meet its
regulatory requirements. As noted
above, Members may freely choose to
rely on one or many ports, depending
on their business model.
The Exchange’s proposal is
reasonable, equitable and not unfairly
discriminatory as MRX is providing
MRX Electronic Access Members the
first FIX Port to submit orders and MRX
Market Makers the first SQF Port to
submit quotes to MRX, at no cost, in
addition to providing the first FIX
Disaster Recovery Port and the first SQF
Disaster Recovery Port at no cost. These
ports, which are offered at no cost,
would allow an MRX Member to meet
31 This Member informed the Exchange that they
elected to utilize less ports in response to the
current port pricing. This Member had a total of 8
SQF Ports at the time they instructed MRX to cancel
3 of those ports.
32 MRX Members have trade-through
requirements under Regulation NMS as well as
broker-dealers’ best execution obligations. See Rule
611 of Regulation NMS; 17 CFR 242.611 and FINRA
Rule 5310.
33 MRX Members have trade-through
requirements under Regulation NMS as well as
broker-dealers’ best execution obligations. MRX
Market Makers have intra-day quoting
requirements. See Options 2, Section 5(e). PMMs
must submit a Valid Width Quote each day to open
their assigned options series. See Options 3, Section
8(c)(1) and 8(c)(3).
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
79927
its regulatory requirements. All other
ports offered by MRX are not required
for an MRX Member to meet its
regulatory obligations. Therefore, for the
foregoing reasons, it is reasonable to
assess no fee for the first FIX Port
obtained by an Electronic Access
Member or the first SQF Port obtained
by a Market Maker as an MRX Member
is able to meet its regulatory
requirements with these ports.
Further it is equitable and not unfairly
discriminatory to assess no fee for the
first FIX Port to Electronic Access
Members as all Electronic Access
Members would be entitled to the first
FIX Port at no cost. Also, it is equitable
and not unfairly discriminatory to
assess no fee for the first SQF Port to
Market Makers as all Market Makers
would be entitled to the first SQF Port
at no cost. With this proposal, MRX
Members may organize their business in
such a way as to submit orders and/or
quotes continuously to MRX at no cost.
The Exchange’s proposal to assess
Members $650 per port, per month, per
account number for FIX Ports beyond
the first port and $1,250 per port, per
month for SQF Ports beyond the first
port is reasonable because these ports
are not required for a member to meet
its regulatory requirements. Members
only require one FIX Port to submit
orders to MRX and one SQF Port to
submit quotes to MRX. Members
electing to subscribe to more than one
FIX or SQF Port are choosing the
additional ports to accommodate their
business model. Additionally, to the
extent a Member expended more than
$7,500 for FIX Ports or more than
$17,500 for SQF Ports, the Exchange
would not charge an MRX Member for
additional FIX or SQF Ports beyond the
cap. The fees for the proposed
additional FIX and SQF Ports are
equitable and not unfairly
discriminatory because any Member
may elect to subscribe to additional
ports. Electronic Access Members
would be subject to the same fees for
FIX Ports and Market Makers would be
subject to the same fees for SQF Ports.
Unlike other market participants,
Market Makers are required to provide
continuous two-sided quotes on a daily
basis,34 and are subject to various
obligations associated with providing
liquidity.35 Also, as noted herein,
account numbers are available on MRX
at no cost.
The Exchange’s proposal to assess
$650 per port, per month, per account
number for an OTTO Port is reasonable
because OTTO is not required for a
34 See
35 See
E:\FR\FM\28DEN1.SGM
MRX Options 2, Section 5.
MRX Options 2, Section 4.
28DEN1
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Federal Register / Vol. 87, No. 248 / Wednesday, December 28, 2022 / Notices
member to meet its regulatory
requirements. The Exchange is offering
the first FIX Port at no cost to submit
orders to MRX. In addition to the FIX
Port, all Members may elect to purchase
OTTO to submit orders to MRX. MRX
Members utilizing the FIX Port, which
is offered at no cost, do not need to
utilize OTTO.
The Exchange’s proposal to offer an
SQF Purge Port for $1,250 per port, per
month is reasonable because this port is
not required for a member to meet its
regulatory requirements. The SQF Purge
Port is designed to assist Market Makers
in the management of, and risk control
over, their quotes. Market Makers may
utilize a purge port to reduce
uncertainty and to manage risk by
purging all quotes in their assigned
options series. The proposed SQF Purge
Port is equitable and not unfairly
discriminatory because any Market
Maker may elect to purchase an SQF
Purge Port and would be subject to the
same fee.
The Exchange’s proposal to assess
$650 per port, per month for CTI Ports
and FIX DROP Ports is reasonable
because these ports are not required for
a member to meet its regulatory
requirements. The proposed CTI and
FIX DROP Ports are equitable and not
unfairly discriminatory because any
Member may elect to purchase an
additional CTI Port or FIX DROP Port
and would be subject to the same fee.
The Exchange’s proposal to assess no
fee for the first FIX Disaster Recovery
Port or the first SQF Disaster Recovery
Port is reasonable because it will
provide Members with continuous
access to MRX in the event of a failover,
at no cost and allow MRX Members to
meet their regulatory obligations.
Further it is equitable and not unfairly
discriminatory to assess no fee for the
first FIX Disaster Recovery Port to
Electronic Access Members as all
Electronic Access Members would be
entitled to the first FIX Disaster
Recovery Port at no cost. Also, it is
equitable and not unfairly
discriminatory to assess no fee for the
first SQF Disaster Recovery Port to
Market Makers as all Market Makers
would be entitled to the first SQF
Disaster Recovery Port at no cost.
The Exchange’s proposal to assess
Members $50 per port, per month, per
account number for additional FIX
Disaster Recovery Ports beyond the first
port offered at no cost and $50 per port,
per month, per account number for
additional SQF Disaster Recovery Ports
beyond the first port at no cost is
reasonable because these ports allow
MRX Members to meet their regulatory
obligations. Members only require one
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18:26 Dec 27, 2022
Jkt 259001
FIX Disaster Recovery Port to submit
orders to MRX in the event of a failover
and one SQF Disaster Recovery Port to
submit quotes to MRX in the event of a
failover. Additionally, to the extent a
Member expended more than $7,500 for
Disaster Recovery Ports, the Exchange
would not charge an MRX Member for
additional Disaster Recovery Ports
beyond the cap. The fees for the
proposed additional FIX and SQF
Disaster Recovery Ports are equitable
and not unfairly discriminatory because
any Member may elect additional ports
and would be subject to the same fees.
The Exchange’s proposal to offer
Disaster Recovery Ports for SQF Purge
Ports, and OTTO Ports at $50 per port,
per month, per account number and CTI
Ports, and FIX DROP Ports for $50 per
port, per month is reasonable because
these ports allow MRX Members to meet
their regulatory obligations. The
proposed Disaster Recovery Port fees are
intended to encourage Members to be
efficient when purchasing Disaster
Recovery Ports. The proposed Disaster
Recovery Ports are equitable and not
unfairly discriminatory because any
Member may elect to purchase an
additional Disaster Recovery Port and
would be subject to the same fee,
depending on the port.
Finally, in the event that an MRX
Member elects to subscribe to multiple
ports, the Exchange offers a monthly cap
beyond which a Member would be
assessed no additional fees for month.
As noted above, the SQF Port and the
SQF Purge Port are subject to a monthly
cap of $17,500 and the OTTO Port, CTI
Port, FIX Port, FIX Drop Port and all
Disaster Recovery Ports are subject to a
monthly cap of $7,500. These caps are
reasonable because they allow Members
to limit their fees beyond a certain level
if they elect to purchase multiple ports
in a given month. The caps are also
equitable and not unfairly
discriminatory because any Member
will be subject to the cap, provided they
exceeded the appropriate dollar amount
in a given month.
The proposed port fees are similar to
fees assessed today by GEMX, except
that GEMX does not offer the first FIX
and SQF Port at no cost, nor does GEMX
offer the first FIX Disaster Recovery Port
or the first SQF Disaster Recovery Port
at no cost.36 By way of comparison, ISE
assessed fees for ports 37 in 2019 while
36 See GEMX Options 7, Section 6.C. (Ports and
Other Services).
37 Since 2019, ISE has assessed the following port
fees: a FIX Port Fee of $300 per port, per month,
per mnemonic, an SQF Port Fee and SQF Purge Port
Fee of $1,100 per port, per month, an OTTO Port
Fee of $400 per port, per month, per mnemonic
with a monthly cap of $4,000, a CTI Port Fee and
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
offering the same suite of functionality
as MRX, with a limited exception.38
Cboe 39 port fees are within the range of
the proposed fees. While Cboe does not
offer the first order and quote entry port
at no cost or Disaster Recovery Ports at
no cost, it tiers its BOE and FIX Logical
ports and each subsequent port fee is
lower than MRX’s port fees. MRX’s FIX
DROP Port Fee is lower than Cboe’s
DROP Logical Port Fee.40 Cboe does not
cap its ports as MRX has proposed
herein. BOX port fees 41 are within the
range of the proposed fees. While BOX
does not offer the first order and quote
entry port at no cost or Disaster
Recovery Ports at no cost, it tiers its FIX
and SAIL port fees and each subsequent
port fee is lower than MRX’s port fees,
although the fees are not capped as
proposed herein. MRX’s FIX DROP Port
Fee is higher than BOX’s Drop Copy
Port Fee.42 MIAX port fees 43 are within
the range of the proposed fees. MRX
MEI Port users are allocated two (2) Full
Service MEI Ports and two (2) Limited
Service MEI Ports per matching engine
FIX DROP Port Fee of $500 per port, per month, per
mnemonic. See Securities Exchange Act Release
No. 82568 (January 23, 2018), 83 FR 4086 (January
29, 2018) (SR–ISE–2018–07) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
To Assess Fees for OTTO Port, CTI Port, FIX Port,
FIX Drop Port and Disaster Recovery Port
Connectivity). Of note, ISE assessed port fees prior
to 2019 as well.
38 See note 41, supra.
39 Cboe assesses a fee of $750 per port up to 5
BOE/FIX Logical Ports, and $800 per port for over
5 BOE/FIX Logical Ports. See Cboe’s Fees Schedule.
40 Cboe assesses $750 for Drop Logical Ports and
$850 for Purge Ports. See Cboe’s Fees Schedule.
41 BOX assesses tiered FIX Port Fees as follows:
$500 per port per month for the first FIX Port, $250
per port per month for FIX Ports 2–5 and $150 per
port per month for over 5 FIX Ports. BOX assesses
$1000 per month for all SAIL Ports for Market
Making and $500 per month per port up to 5 ports
for order entry and $150 per month for each
additional port. See BOX’s Fee Schedule.
42 BOX assesses Drop Copy Port Fees of $500 per
port per month for each month a Participant is
credentialed to use a Drop Copy Port. Drop Copy
Port Fees will be capped at $2,000 per month. See
BOX’s Fee Schedule.
43 MIAX tiers its FIX Port fees as follows: $550
per month for the 1st FIX Port, $350 per month per
port for the FIX Ports 2 through 5 and $150 per
month for over 5 FIX Ports. MIAX tiers its MEI Port
Fees and assesses fees per number of classes and
as a percentage of National Average Daily Volume.
MEI Port fees range from $5,000 to $20,500 per
month. The applicable fee rate is the lesser of either
the per class basis or percentage of total national
average daily volume measurement. However, if the
Market Maker’s total monthly executed volume
during the relevant month is less than 0.060% of
the total monthly executed volume reported by The
Options Clearing Corporation in the market maker
account type for MIAX-listed option classes for that
month, then the fee will be $14,500 instead of the
fee otherwise applicable. MIAX will assess monthly
MEI Port Fees on Market Makers in each month the
Member has been credentialed to use the MEI Port
in the production environment and has been
assigned to quote in at least one class. See MIAX’s
Fee Schedule.
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to which they connect.44 A MIAX
Market Maker may request and be
allocated two (2) Purge Ports per
matching engine to which it connects
via a Full Service MEI Port.45 MIAX
assesses a Real-Time Clearing Trade
Drop Port Fee of $0.0030 per executed
contract side per month.46 MIAX
assesses a FIX Drop Copy Port fee of
$500 per month 47 which is lower than
MRX’s proposed fee. NYSE Arca port
fees 48 are within the range of the
proposed fees. For each order/quote
entry port utilized, NYSE Arca Market
Makers may utilize, free of charge, one
port dedicated to quote cancellation or
‘‘quote takedown,’’ which port(s) will
not be included in the count of order/
quote entry ports utilized.49 NYSE
ARCA assesses a DROP Copy Port fee of
$500 per port per month 50 which is
lower than MRX’s proposed fee.51
B. Self-Regulatory Organization’s
Statement on Burden on Competition
ddrumheller on DSK6VXHR33PROD with NOTICES
The Exchange does not believe that
the proposed rule change will impose
any intermarket burden on competition
not necessary or appropriate in
furtherance of the purposes of the Act.
44 MEI Port Fees include MEI Ports at the Primary,
Secondary and Disaster Recovery data centers.
MIAX Market Makers may request additional
Limited Service MEI Ports for which MIAX will
assess MIAX Market Makers $100 per month per
additional Limited Service MEI Port for each
engine. See MIAX’s Fee Schedule.
45 For each month in which the MIAX Market
Maker has been credentialed to use Purge Ports in
the production environment and has been assigned
to quote in at least one class, the Exchange will
assess the MIAX Market Maker a flat fee of $1,500
per month, regardless of the number of Purge Ports
allocated to the MIAX Market Maker. The MEI Port
Fee for a Market Maker that trades solely in
Proprietary Products is waived until December 31,
2022. See MIAX’s Fee Schedule.
46 See MIAX’s Fee Schedule.
47 See MIAX’s Fee Schedule.
48 NYSE Arca assesses a tiered order/quote entry
port fee of $450 for the first 40 ports and $150 per
port per month for the 41 ports or greater. For
purpose of calculating the number of order/quote
entry ports and quote takedown ports, NYSE ARCA
aggregates the ports of affiliates. See NYSE Arca
Options Fees and Charges.
49 Any quote takedown port utilized by a NYSE
Arca Market Maker that is in excess of the number
of order/quote entry ports utilized will be counted
and charged as an order/quote entry port. See NYSE
Arca Options Fees and Charges.
50 Only one fee per drop copy port shall apply,
even if receiving drop copies from multiple order/
quote entry ports and/or from NYSE Arca Equities).
For the backup datacenter port, no fee shall apply
if configured such that it is duplicative of another
drop copy port of the same user. See NYSE Arca
Options Fees and Charges.
51 NYSE ARCA capped fees for Order/Quote Entry
Ports, Quote Takedown Ports, and Drop Copy Ports
are based on the total number of such ports an OTP
Holder or OTP Firm is billed for in the month
preceding the beginning of the NYSE ARCA’s
migration to the Pillar platform, during the Pillar
Migration.
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18:26 Dec 27, 2022
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The Exchange believes its proposal to
offer the first FIX and SQF Ports for free,
as well as the first Disaster Recovery
version of these ports, permits MRX to
set fees, similar to other options
markets, while continuing to allow MRX
Members to meet their regulatory
obligations. MRX’s offering would
permit Electronic Access Members and
Market Makers the ability to submit
orders and quote to MRX at no cost. The
remainder of the port offerings
(additional FIX and SQF Ports,
additional FIX and SQF Disaster
Recovery Ports, SQF Purge Port, OTTO
Port, CTI Port, FIX DROP Port and
Disaster Recovery Ports for SQF Purge
Ports, OTTO Ports, CTI Ports, and FIX
DROP Ports) are not required for MRX
Members to meet their regulatory
obligations. The proposed fees do not
impose an undue burden on
competition because the Exchange
would uniformly assess the port fees to
all Members, as applicable, and would
uniformly apply monthly caps.
Other markets have higher market
share as compared to MRX (1.37%). The
proposed port fees are similar to port
fees assessed by other options markets
as noted in this proposal as noted above.
With respect to the higher fees
assessed for SQF Ports and SQF Purge
Ports, the Exchange notes that only
Market Makers may utilize these ports.
Market Makers are required to provide
continuous two-sided quotes on a daily
basis,52 and are subject to various
obligations associated with providing
liquidity.53 As a result of these quoting
obligations, the SQF Port and SQF Purge
Port are designed to handle higher
throughput to permit Market Makers to
bundle orders to meet their obligations.
The technology to permit Market
Makers to submit a greater number of
quotes, in addition to the various risk
protections 54 afforded to these market
participants when quoting, accounts for
the higher SQF Port and SQF Purge Port
fees.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or 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
52 See
MRX Options 2, Section 5.
MRX Options 2, Section 4.
54 See MRX Options 3, Section 15(a)(3). Market
Makers are offered risk protections to permit them
to manage their risk more effectively.
53 See
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Fmt 4703
Sfmt 4703
79929
19(b)(3)(A)(ii) of the Act.55 At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is: (i)
necessary or appropriate in the public
interest; (ii) for the protection of
investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
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–
MRX–2022–29 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–MRX–2022–29. 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
55 15
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U.S.C. 78s(b)(3)(A)(ii).
28DEN1
79930
Federal Register / Vol. 87, No. 248 / Wednesday, December 28, 2022 / Notices
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–MRX–2022–29 and should
be submitted on or before January 18,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.56
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–28199 Filed 12–27–22; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[License No. 05/05–0344]
ddrumheller on DSK6VXHR33PROD with NOTICES
Convergent Capital Partners IV, LP;
Notice Seeking Exemption Under
Section 312 of the Small Business
Investment Act, Conflicts of Interest
Notice is hereby given that
Convergent Capital Partners IV, LP,
9855 West 78th Street, Suite 320, Eden
Prairie, MN 55344, a Federal Licensee
under the Small Business Investment
Act of 1958, as amended (‘‘the Act’’), in
connection with the financing of a small
concern, has sought an exemption under
section 312 of the Act and 13 CFR
107.730, Financings which Constitute
Conflicts of Interest of the Code of
Federal Regulations. Convergent Capital
Partners IV, LP, is seeking a written
exemption from SBA for a proposed
financing to Optimum Healthcare IT,
LLC, 1300 Marsh Landing Parkway,
Jacksonville Beach, FL 32250.
The financing is brought within the
purview of 13 CFR 107.730(a)(4) of the
Code of Federal Regulations because
proceeds from the financing will
discharge the obligation of Convergent
Capital Partners III, LP, an Associate by
virtue of Common Control as defined at
13 CFR 107.50.
Notice is hereby given that any
interested person may submit written
comments on this transaction within
fifteen days of the date of this
publication to the Associate
Administrator, Office of Investment and
Innovation, U.S. Small Business
56 17
Administration, 409 Third Street SW,
Washington, DC 20416.
Administration, 409 Third Street SW,
Washington, DC 20416.
Bailey DeVries,
Associate Administrator, Office of Investment
and Innovation, U.S. Small Business
Administration.
Bailey DeVries,
Associate Administrator, Office of Investment
and Innovation, U.S. Small Business
Administration.
[FR Doc. 2022–28212 Filed 12–27–22; 8:45 am]
[FR Doc. 2022–28213 Filed 12–27–22; 8:45 am]
BILLING CODE P
BILLING CODE P
SMALL BUSINESS ADMINISTRATION
[Public Notice: 11952]
[License No. 04/04–0349]
New Canaan Funding Mezzanine VII
SBIC, LP; Notice Seeking Exemption
Under Section 312 of the Small
Business Investment Act, Conflicts of
Interest
Notice is hereby given that New
Canaan Funding Mezzanine VII SBIC,
LP, 305 Fifth Avenue South, Suite 204
Naples, FL 34102, a Federal Licensee
under the Small Business Investment
Act of 1958, as amended (‘‘the Act’’), in
connection with the financing of a small
concerns, has sought an exemption
under section 312 of the Act and 13 CFR
107.730, Financings which Constitute
Conflicts of Interest of the Code of
Federal Regulations. New Canaan
Funding Mezzanine VII SBIC, LP is
proposing to provide financing to
Safemark Inc., 200 W. Sand Lake Rd.,
Suite 800, Orlando, FL to support the
company’s growth.
The proposed transaction is brought
within the purview of 13 CFR 107.730
of the Code of Federal Regulations
because New Canaan Funding
Mezzanine V SBIC, LP and New Canaan
Funding Mezzanine V, LP, Associates of
New Canaan Funding Mezzanine VII
SBIC, LP, by virtue of Common Control
as defined at 13 CFR 107.50, hold
investments in Safemark, Inc. which
will be discharged. In addition, New
Canaan Funding Mezzanine VII SBIC,
LP and its Associates did not previously
invest in Safemark, Inc. at the same time
and on the same terms and conditions
as the proposed financing to Safemark,
Inc.
Therefore, the proposed transaction is
considered self-deal pursuant to 13 CFR
107.730 and requires a regulatory
exemption. Notice is hereby given that
any interested person may submit
written comments on the transaction
within fifteen days of the date of this
publication to Associate Administrator
for Investment, U.S. Small Business
CFR 200.30–3(a)(12).
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18:26 Dec 27, 2022
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DEPARTMENT OF STATE
PO 00000
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U.S. Department of State Advisory
Committee on Private International
Law: Public Meeting on the Final
Report of the Experts Group on
Parentage/Surrogacy Project of the
Hague Conference on Private
International Law (HCCH).
The Department of State’s Advisory
Committee on Private International Law
(ACPIL) will hold a virtual meeting to
discuss the Hague Experts Group Final
Report on Parentage/Surrogacy Project
on Wednesday February 1, 2023. The
meeting will be held in WebEx. The
program is scheduled to run from 1 p.m.
to 4 p.m.
The meeting will discuss the Final
Report of the Experts’ Group regarding
the feasibility of one or more private
international law instruments on legal
parentage. The Final Report has been
made available on the HCCH website at
https://assets.hcch.net/docs/6d8eeb81ef67-4b21-be42-f7261d0cfa52.pdf. The
Report will be considered by the
Council on General Affairs and Policy
(CGAP) in March 2023, at which CGAP
is expected to decide on whether future
work on the project should be pursued.
This Report presents the HCCH Experts’
Group on Parentage/Surrogacy analysis
and main conclusions on the feasibility
of the core aspects of possible options
for two separate binding legal
instruments on legal parentage: one on
legal parentage in general, and another
on legal parentage established as a result
of an international surrogacy
arrangement (ISA) specifically. The
purpose of the public meeting is to
obtain the views of concerned
stakeholders on the matters presented in
the Report.
Members of the public may attend
this virtual session and will be
permitted to participate in the
discussion. Virtual attendance is limited
to 100 persons, so each member of the
public that wishes to attend this session
must provide: Name, contact
information, and affiliation to pil@
state.gov, not later than January 23,
2023. When you register, please indicate
whether you require captioning. The
E:\FR\FM\28DEN1.SGM
28DEN1
]]>Agencies
[Federal Register Volume 87, Number 248 (Wednesday, December 28, 2022)]
[Notices]
[Pages 79924-79930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28199]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96563; File No. SR-MRX-2022-29]
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend MRX
Options 7, Section 6
December 21, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 16, 2022, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend MRX's Pricing Schedule at Options 7,
Section 6.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/mrx/rules, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for
[[Page 79925]]
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
MRX proposes to amend its Pricing Schedule at Options 7, Section 6,
Ports and Other Services, to assess port fees, which were not assessed
until this year. Prior to this year, MRX did not assess its Members any
port fees. MRX launched its options market in 2016 \3\ and Members did
not pay any port fees until 2022.
---------------------------------------------------------------------------
\3\ The Exchange initially filed the proposed pricing changes on
May 2, 2022 (SR-MRX-2022-04) instituting fees for membership, ports
and market data. On June 29, 2022, the Exchange withdrew that
filing, and submitted separate filings for membership, ports and
market data. SR-MRX-2022-06 replaced the port fees set forth in SR-
MRX-2022-04. On July 1, 2022, SR-MRX-2022-06 was withdrawn and
replaced with SR-MRX-2022-09. On August 25, 2022, SR-MRX-2022-09 was
withdrawn and replaced with SR-MRX-2022-12. On October 11, 2022, SR-
MRX-2022-12 was withdrawn and replaced with SR-MRX-2022-20. On
December 8, 2022, SR-MRX-2022-20 was withdrawn and replaced with SR-
MRX-2022-28. The instant filing replaces SR-MRX-2022-28 which was
withdrawn on December 16, 2022.
---------------------------------------------------------------------------
Newly-opened exchanges often charge no fees for certain services,
such as ports, in order to attract order flow to an exchange, and later
amend their fees to charge for those services.\4\ The proposed port
fees within Options 7, Section 6, Ports and Other Services, are
described below.
---------------------------------------------------------------------------
\4\ See, e.g., Securities Exchange Act Release No 90076 (October
2, 2020), 85 FR 63620 (October 8, 2020) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Adopt the
Initial Fee Schedule and Other Fees for MEMX LLC).
---------------------------------------------------------------------------
The Exchange proposes to amend fees for the following ports within
Options 7, Section 6: (1) FIX,\5\ (2) SQF; \6\ (3) SQF Purge; \7\ (4)
OTTO; \8\ (5) CTI; \9\ (6) FIX DROP; \10\ and Disaster Recovery
Ports.\11\ Currently, no fees are being assessed for these ports.
---------------------------------------------------------------------------
\5\ ``Financial Information eXchange'' or ``FIX'' is an
interface that allows Members and their Sponsored Customers to
connect, send, and receive messages related to orders and auction
orders to the Exchange. Features include the following: (1)
execution messages; (2) order messages; (3) risk protection triggers
and cancel notifications; and (4) post trade allocation messages.
See Supplementary Material .03(a) to Options 3, Section 7.
\6\ ``Specialized Quote Feed'' or ``SQF'' is an interface that
allows Market Makers to connect, send, and receive messages related
to quotes, Immediate-or-Cancel Orders, and auction responses to the
Exchange. Features include the following: (1) options symbol
directory messages (e.g., underlying and complex instruments); (2)
system event messages (e.g., start of trading hours messages and
start of opening); (3) trading action messages (e.g., halts and
resumes); (4) execution messages; (5) quote messages; (6) Immediate-
or-Cancel Order messages; (7) risk protection triggers and purge
notifications; (8) opening imbalance messages; (9) auction
notifications; and (10) auction responses. The SQF Purge Interface
only receives and notifies of purge requests from the Market Maker.
Market Makers may only enter interest into SQF in their assigned
options series. See Supplementary Material .03(c) to Options 3,
Section 7.
\7\ SQF Purge is a specific port for the SQF interface that only
receives and notifies of purge requests from the Market Maker.
Dedicated SQF Purge Ports enable Market Makers to seamlessly manage
their ability to remove their quotes in a swift manner. The SQF
Purge Port is designed to assist Market Makers in the management of,
and risk control over, their quotes. Market Makers may utilize a
purge port to reduce uncertainty and to manage risk by purging all
quotes in their assigned options series. Of note, Market Makers may
only enter interest into SQF in their assigned options series.
Additionally, the SQF Purge Port may be utilized by a Market Maker
in the event that the Member has a system issue and determines to
purge its quotes from the order book.
\8\ ``Ouch to Trade Options'' or ``OTTO'' is an interface that
allows Members and their Sponsored Customers to connect, send, and
receive messages related to orders, auction orders, and auction
responses to the Exchange. Features include the following: (1)
options symbol directory messages (e.g., underlying and complex
instruments); (2) system event messages (e.g., start of trading
hours messages and start of opening); (3) trading action messages
(e.g., halts and resumes); (4) execution messages; (5) order
messages; (6) risk protection triggers and cancel notifications; (7)
auction notifications; (8) auction responses; and (9) post trade
allocation messages. See Supplementary Material .03(b) to Options 3,
Section 7. Unlike FIX, which offers routing capability, OTTO does
not permit routing.
\9\ Clearing Trade Interface (``CTI'') is a real-time cleared
trade update message that is sent to a Member after an execution has
occurred and contains trade details specific to that Member. The
information includes, among other things, the following: (i) The
Clearing Member Trade Agreement (``CMTA'') or The Options Clearing
Corporation (``OCC'') number; (ii) badge or mnemonic; (iii) account
number; (iv) information which identifies the transaction type
(e.g., auction type) for billing purposes; and (v) market
participant capacity. See Options 3, Section 23(b)(1). CTI Ports are
not required for an MRX Member to meet its regulatory obligations.
Members receive free daily reports listing trade executions from the
Exchange.
\10\ FIX DROP is a real-time order and execution update message
that is sent to a Member after an order been received/modified or an
execution has occurred and contains trade details specific to that
Member. The information includes, among other things, the following:
(i) executions; (ii) cancellations; (iii) modifications to an
existing order; and (iv) busts or post-trade corrections. See
Options 3, Section 23(b)(3). FIX DROP Ports are not required for an
MRX Member to meet its regulatory obligations. Members receive free
daily reports listing open orders and trade executions from the
Exchange.
\11\ Disaster Recovery ports provide connectivity to the
Exchange's disaster recovery data center, to be utilized in the
event the Exchange should failover during a trading day.
---------------------------------------------------------------------------
The Exchange proposes to assess no fee for the first FIX Port
obtained by an Electronic Access Member \12\ or the first SQF Port
obtained by a Market Maker.\13\ The Exchange proposes to assess a FIX
Port Fee of $650 per port, per month, per account number \14\ for each
subsequent port beyond the first port. The Exchange proposes to assess
an SQF Port Fee of $1,250 per port, per month for each subsequent port
beyond the first port.\15\ The Exchange proposes to assess an SQF Purge
Port Fee of $1,250 per port, per month. The Exchange proposes to assess
an OTTO Port Fee of $650 per port, per month, per account number. The
Exchange proposes to assess a CTI Port Fee and a FIX Drop Port Fee of
$650 per port, per month.
---------------------------------------------------------------------------
\12\ The first FIX Port would be provided to each Electronic
Access Member. The term ``Electronic Access Member'' or ``EAM''
means a Member that is approved to exercise trading privileges
associated with EAM Rights. See General 1, Section 1(a)(6). Also,
the first SQF Port would be provided to each Market Maker. The term
``Market Makers'' refers to ``Competitive Market Makers'' and
``Primary Market Makers'' collectively. See Options 1, Section
1(a)(21). The term ``Competitive Market Maker'' means a Member that
is approved to exercise trading privileges associated with CMM
Rights. See Options 1, Section 1(a)(12). The term ``Primary Market
Maker'' means a Member that is approved to exercise trading
privileges associated with PMM Rights. See Options 1, Section
1(a)(35).
\13\ The first SQF Port would be provided to each Market Maker.
The term ``Market Makers'' refers to ``Competitive Market Makers''
and ``Primary Market Makers'' collectively. See Options 1, Section
1(a)(21). The term ``Competitive Market Maker'' means a Member that
is approved to exercise trading privileges associated with CMM
Rights. See Options 1, Section 1(a)(12). The term ``Primary Market
Maker'' means a Member that is approved to exercise trading
privileges associated with PMM Rights. See Options 1, Section
1(a)(35).
\14\ An ``account number'' shall mean a number assigned to a
Member. Members may have more than one account number. See Options
1, Section 1(a)(1). Account numbers are free on MRX.
\15\ SQF's Port Fees are assessed a higher dollar fee as
compared to FIX and OTTO ports ($1,250 vs. $650) because the
Exchange has to maintain options assignments within SQF and manage
quoting traffic. Market Makers may utilize SQF Ports in their
assigned options series. Market Maker badges are assigned to
specific SQF ports to manage the option series in which a Market
Maker may quote. Additionally, because of quoting obligations
provided for within Options 2, Section 5, Market Makers are required
to provide liquidity in their assigned options series which
generates quote traffic. The Exchange notes because of the higher
fee, SQF ports are billed per port, per month while FIX and OTTO
ports are billed per port, per month, per account number. Members
may have more than one account number.
---------------------------------------------------------------------------
The Exchange proposes to assess no fee for the first FIX Disaster
Recovery Port obtained by an Electronic Access Member \16\ or the first
SQF Disaster
[[Page 79926]]
Recovery Port obtained by a Market Maker.\17\ The Exchange proposes to
assess each additional FIX Disaster Recovery Port and each additional
SQF Disaster Recovery Port a fee of $50 per port, per month, per
account number. Additionally, the Exchange proposes to assess a
Disaster Recovery Fee for SQF Purge and OTTO Ports of $50 per port, per
month, per account number. Finally, the Exchange proposes to assess a
Disaster Recovery Fee for CTI Ports and FIX DROP Ports of $50 per port,
per month.
---------------------------------------------------------------------------
\16\ The first FIX Port would be provided to each Electronic
Access Member. The term ``Electronic Access Member'' or ``EAM''
means a Member that is approved to exercise trading privileges
associated with EAM Rights. See General 1, Section 1(a)(6). Also,
the first SQF Port would be provided to each Market Maker. The term
``Market Makers'' refers to ``Competitive Market Makers'' and
``Primary Market Makers'' collectively. See Options 1, Section
1(a)(21). The term ``Competitive Market Maker'' means a Member that
is approved to exercise trading privileges associated with CMM
Rights. See Options 1, Section 1(a)(12). The term ``Primary Market
Maker'' means a Member that is approved to exercise trading
privileges associated with PMM Rights. See Options 1, Section
1(a)(35).
\17\ The first SQF Port would be provided to each Market Maker.
The term ``Market Makers'' refers to ``Competitive Market Makers''
and ``Primary Market Makers'' collectively. See Options 1, Section
1(a)(21). The term ``Competitive Market Maker'' means a Member that
is approved to exercise trading privileges associated with CMM
Rights. See Options 1, Section 1(a)(12). The term ``Primary Market
Maker'' means a Member that is approved to exercise trading
privileges associated with PMM Rights. See Options 1, Section
1(a)(35).
---------------------------------------------------------------------------
The OTTO Port, CTI Port, FIX Port, FIX Drop Port and all Disaster
Recovery Ports \18\ are available to all Electronic Access Members, and
will be subject to a monthly cap of $7,500.
---------------------------------------------------------------------------
\18\ This includes FIX, SQF, SQF Purge, OTTO, CTI and FIX Drop
Disaster Recovery Ports.
---------------------------------------------------------------------------
The SQF Port and the SQF Purge Port are available to all Market
Makers, and will be subject to a monthly cap of $17,500.\19\
---------------------------------------------------------------------------
\19\ Only Market Makers may quote on MRX. The Exchange is
proposing non-substantive technical amendments to add commas within
the ``Production'' column of the proposed rule text to separate
terms.
---------------------------------------------------------------------------
The Exchange is not amending the Nasdaq MRX Depth of Market, Nasdaq
MRX Order Feed, Nasdaq MRX Top Quote Feed, Nasdaq MRX Trades Feed, or
Nasdaq MRX Spread Feed Ports; all of these aforementioned ports will
continue to be assessed no fees. Additionally, as is the case today,
the Disaster Recovery Ports for the Nasdaq MRX Depth of Market, Nasdaq
MRX Order Feed, Nasdaq MRX Top Quote Feed, Nasdaq MRX Trades Feed and
Nasdaq MRX Spread Feed Ports will not be assessed a fee.
Order and Quote Entry Protocols
Only one FIX order protocol is required for an MRX Member to submit
orders into MRX and to meet its regulatory requirements.\20\ The
Exchange will provide each Electronic Access Member \21\ the first FIX
Port at no cost to submit orders into MRX. Only one account number is
necessary to transact an options business on MRX and account numbers
are available to Members at no cost.
---------------------------------------------------------------------------
\20\ MRX Members have trade-through requirements under
Regulation NMS as well as broker-dealers' best execution
obligations.
\21\ A Market Maker would receive both a FIX Port and an SQF
Port.
---------------------------------------------------------------------------
Only one SQF quote protocol is required for an MRX Market Maker to
submit quotes into MRX and to meet its regulatory requirements.\22\ The
Exchange will provide each Market Maker the first SQF Port at no cost
to submit quotes into MRX. A quoting protocol, such as SQF, is only
required to the extent an MRX Member has been appointed as a Market
Maker in an options series pursuant to Options 2, Section 1.
---------------------------------------------------------------------------
\22\ MRX Market Makers have intra-day quoting requirements. See
Options 2, Section 5(e). Additionally, PMMs must submit a Valid
Width Quote each day to open their assigned options series. See
Options 3, Section 8(c)(1) and 8(c)(3).
---------------------------------------------------------------------------
Only MRX Members may utilize ports on MRX. Any market participant
that sends orders to a Member would not need to utilize a port. The
Member can send all orders, proprietary and agency, through one port to
MRX. Members may elect to obtain multiple account numbers to organize
their business, however only one account number and one port for orders
and one port for quotes is necessary for a Member to trade on MRX. All
other ports offered by MRX are not required for an MRX Member to meet
its regulatory obligations.
MRX also offers an OTTO protocol.\23\ MRX Members utilizing the
first FIX Port offered at no cost do not need to purchase an OTTO Port
to meet their regulatory obligations.
---------------------------------------------------------------------------
\23\ See note 8, supra.
---------------------------------------------------------------------------
Further, while only one FIX protocol is necessary to submit orders
into MRX, Members may choose to purchase a greater number of order
entry ports, depending on that Member's business model.\24\ To the
extent that Electronic Access Members chose to utilize more than one
FIX Port, the Electronic Access Member would be assessed $650 per port,
per month, per account number for each subsequent port beyond the first
port. To the extent that Market Makers chose to utilize more than one
SQF Port, the Market Maker would be assessed $1,250 per port, per month
for each subsequent port beyond the first port. Additionally, to the
extent a Member expended more than $7,500 for FIX Ports or more than
$17,500 for SQF Ports, the Exchange would not charge an MRX Member for
additional FIX or SQF Ports, respectively, beyond the cap.
---------------------------------------------------------------------------
\24\ For example, a Member may desire to utilize multiple FIX or
OTTO Ports for accounting purposes, to measure performance, for
regulatory reasons or other determinations that are specific to that
Member.
---------------------------------------------------------------------------
Other Protocols
The Exchange's proposal to offer an SQF Purge Port \25\ for $1,250
per port, per month is not required for an MRX Member to meet its
regulatory obligations.
---------------------------------------------------------------------------
\25\ See note 7, supra.
---------------------------------------------------------------------------
Disaster Recovery Ports
With respect to Disaster Recovery Ports, the Exchange proposes to
assess no fee for the first FIX Disaster Recovery Port obtained by an
Electronic Access Member or the first SQF Disaster Recovery Port
obtained by a Market Maker. The Exchange proposes to assess no fees for
these ports to provide Members with continuous access to MRX in the
event of a failover at no cost. Electronic Access Members only require
one FIX Disaster Recovery Port to submit orders in the event of a
failover. Market Makers only require one SQF Disaster Recovery Port to
submit quotes in the event of a failover. Electronic Access Members may
elect to purchase additional FIX Disaster Recovery Ports for $50 per
port, per month, per account number. Market Makers may elect to
purchase additional SQF Disaster Recovery Ports for $50 per port, per
month, per account number. The additional FIX and SQF Disaster Recovery
Ports are not necessary to connect to the Exchange in the event of a
failover because the Exchange has provided Members with a FIX Disaster
Recovery Port and an SQF Disaster Recovery Port at no cost. Additional
FIX and SQF Disaster Recovery Ports are not necessary for an MRX Member
to meet its regulatory obligations.\26\
---------------------------------------------------------------------------
\26\ See General 2, Section 12(b).
---------------------------------------------------------------------------
The Exchange's proposal to offer Disaster Recovery Ports for SQF
Purge Ports and OTTO Ports for $50 per port, per month, per account
number and Disaster Recovery Ports for CTI Ports and FIX DROP Ports for
$50 per port, per month is not required for an MRX Member to meet its
regulatory obligations. The proposed Disaster Recovery Port fees are
intended to encourage Members to be efficient when purchasing Disaster
Recovery Ports.
Finally, in the event that an MRX Member elects to subscribe to
multiple ports, the Exchange offers a monthly cap beyond which a Member
would be assessed no additional port fees in a given month. As noted
above, the SQF Port and the SQF Purge Port are subject to a monthly cap
of $17,500 and the
[[Page 79927]]
OTTO Port, CTI Port, FIX Port, FIX Drop Port and all Disaster Recovery
Ports are subject to a monthly cap of $7,500.
These different protocols are not all necessary to conduct business
on MRX; a Member may choose among protocols based on their business
workflow. The Exchange's proposal to offer the first FIX and SQF Port
at no cost as well as the first FIX and SQF Disaster Recovery Ports at
no cost would allow MRX Members to submit orders and quotes into MRX at
no cost while meeting their regulatory obligations.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\27\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\28\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees, and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\27\ See 15 U.S.C. 78f(b).
\28\ See 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
MRX proposes to amend its Pricing Schedule at Options 7, Section 6,
Ports and Other Services, to assess port fees, which were not assessed
until this year. Prior to this year, MRX did not assess its Members any
port fees. MRX launched its options market in 2016 \29\ and Members did
not pay any port fees until 2022. Of the 16 operating options
exchanges, MRX has the smallest market share at 1.37% as of November
2022.
---------------------------------------------------------------------------
\29\ The Exchange initially filed the proposed pricing changes
on May 2, 2022 (SR-MRX-2022-04) instituting fees for membership,
ports and market data. On June 29, 2022, the Exchange withdrew that
filing, and submitted separate filings for membership, ports and
market data. SR-MRX-2022-06 replaced the port fees set forth in SR-
MRX-2022-04. On July 1, 2022, SR-MRX-2022-06 was withdrawn and
replaced with SR-MRX-2022-09. On August 25, 2022, SR-MRX-2022-09 was
withdrawn and replaced with SR-MRX-2022-12. On October 11, 2022, SR-
MRX-2022-12 was withdrawn and replaced with SR-MRX-2022-20. On
December 8, 2022, SR-MRX-2022-20 was withdrawn and replaced with SR-
MRX-2022-28. The instant filing replaces SR-MRX-2022-28 which was
withdrawn on December 16, 2022.
---------------------------------------------------------------------------
The Exchange notes that, as of May 2, 2022, one MRX Member, who was
also a Market Maker, cancelled all of their ports (1 SQF Port and 1
OTTO Port) to avoid being assessed any MRX port fees.\30\ As of July 1,
2022, the Exchange did not assess MRX Members for their first SQF Port
or FIX Port. Further, in October 2022, an additional MRX Member, who is
also a Market Maker, cancelled 3 SQF Ports.\31\
---------------------------------------------------------------------------
\30\ MRX originally filed to assess a fee for all FIX Ports.
\31\ This Member informed the Exchange that they elected to
utilize less ports in response to the current port pricing. This
Member had a total of 8 SQF Ports at the time they instructed MRX to
cancel 3 of those ports.
---------------------------------------------------------------------------
Proposed Port Fees Are Reasonable, Equitable and Not Unfairly
Discriminatory
Only one FIX order protocol is required for an MRX Member to submit
orders into MRX and to meet its regulatory requirements \32\ at no cost
while meeting its regulatory requirements. The Exchange will provide
each Electronic Access Member the first FIX Port at no cost to submit
orders into MRX. Only one account number is necessary to transact an
options business on MRX and account numbers are available to Members at
no cost.
---------------------------------------------------------------------------
\32\ MRX Members have trade-through requirements under
Regulation NMS as well as broker-dealers' best execution
obligations. See Rule 611 of Regulation NMS; 17 CFR 242.611 and
FINRA Rule 5310.
---------------------------------------------------------------------------
Only one SQF quote protocol is required for an MRX Market Maker to
submit quotes into MRX and to meet its regulatory requirements \33\ at
no cost while meeting its regulatory requirements. The Exchange will
provide each Market Maker the first SQF Port at no cost to submit
quotes into MRX. A quoting protocol, such as SQF, is only required to
the extent an MRX Member has been appointed as a Market Maker in an
options series pursuant to Options 2, Section 1.
---------------------------------------------------------------------------
\33\ MRX Members have trade-through requirements under
Regulation NMS as well as broker-dealers' best execution
obligations. MRX Market Makers have intra-day quoting requirements.
See Options 2, Section 5(e). PMMs must submit a Valid Width Quote
each day to open their assigned options series. See Options 3,
Section 8(c)(1) and 8(c)(3).
---------------------------------------------------------------------------
The Exchange proposes to offer the first FIX and SQF Port at no
cost in addition to the first FIX Disaster Recovery Port and the first
SQF Disaster Recovery Port at no cost to meet its regulatory
requirements. As noted above, Members may freely choose to rely on one
or many ports, depending on their business model.
The Exchange's proposal is reasonable, equitable and not unfairly
discriminatory as MRX is providing MRX Electronic Access Members the
first FIX Port to submit orders and MRX Market Makers the first SQF
Port to submit quotes to MRX, at no cost, in addition to providing the
first FIX Disaster Recovery Port and the first SQF Disaster Recovery
Port at no cost. These ports, which are offered at no cost, would allow
an MRX Member to meet its regulatory requirements. All other ports
offered by MRX are not required for an MRX Member to meet its
regulatory obligations. Therefore, for the foregoing reasons, it is
reasonable to assess no fee for the first FIX Port obtained by an
Electronic Access Member or the first SQF Port obtained by a Market
Maker as an MRX Member is able to meet its regulatory requirements with
these ports.
Further it is equitable and not unfairly discriminatory to assess
no fee for the first FIX Port to Electronic Access Members as all
Electronic Access Members would be entitled to the first FIX Port at no
cost. Also, it is equitable and not unfairly discriminatory to assess
no fee for the first SQF Port to Market Makers as all Market Makers
would be entitled to the first SQF Port at no cost. With this proposal,
MRX Members may organize their business in such a way as to submit
orders and/or quotes continuously to MRX at no cost.
The Exchange's proposal to assess Members $650 per port, per month,
per account number for FIX Ports beyond the first port and $1,250 per
port, per month for SQF Ports beyond the first port is reasonable
because these ports are not required for a member to meet its
regulatory requirements. Members only require one FIX Port to submit
orders to MRX and one SQF Port to submit quotes to MRX. Members
electing to subscribe to more than one FIX or SQF Port are choosing the
additional ports to accommodate their business model. Additionally, to
the extent a Member expended more than $7,500 for FIX Ports or more
than $17,500 for SQF Ports, the Exchange would not charge an MRX Member
for additional FIX or SQF Ports beyond the cap. The fees for the
proposed additional FIX and SQF Ports are equitable and not unfairly
discriminatory because any Member may elect to subscribe to additional
ports. Electronic Access Members would be subject to the same fees for
FIX Ports and Market Makers would be subject to the same fees for SQF
Ports. Unlike other market participants, Market Makers are required to
provide continuous two-sided quotes on a daily basis,\34\ and are
subject to various obligations associated with providing liquidity.\35\
Also, as noted herein, account numbers are available on MRX at no cost.
---------------------------------------------------------------------------
\34\ See MRX Options 2, Section 5.
\35\ See MRX Options 2, Section 4.
---------------------------------------------------------------------------
The Exchange's proposal to assess $650 per port, per month, per
account number for an OTTO Port is reasonable because OTTO is not
required for a
[[Page 79928]]
member to meet its regulatory requirements. The Exchange is offering
the first FIX Port at no cost to submit orders to MRX. In addition to
the FIX Port, all Members may elect to purchase OTTO to submit orders
to MRX. MRX Members utilizing the FIX Port, which is offered at no
cost, do not need to utilize OTTO.
The Exchange's proposal to offer an SQF Purge Port for $1,250 per
port, per month is reasonable because this port is not required for a
member to meet its regulatory requirements. The SQF Purge Port is
designed to assist Market Makers in the management of, and risk control
over, their quotes. Market Makers may utilize a purge port to reduce
uncertainty and to manage risk by purging all quotes in their assigned
options series. The proposed SQF Purge Port is equitable and not
unfairly discriminatory because any Market Maker may elect to purchase
an SQF Purge Port and would be subject to the same fee.
The Exchange's proposal to assess $650 per port, per month for CTI
Ports and FIX DROP Ports is reasonable because these ports are not
required for a member to meet its regulatory requirements. The proposed
CTI and FIX DROP Ports are equitable and not unfairly discriminatory
because any Member may elect to purchase an additional CTI Port or FIX
DROP Port and would be subject to the same fee.
The Exchange's proposal to assess no fee for the first FIX Disaster
Recovery Port or the first SQF Disaster Recovery Port is reasonable
because it will provide Members with continuous access to MRX in the
event of a failover, at no cost and allow MRX Members to meet their
regulatory obligations. Further it is equitable and not unfairly
discriminatory to assess no fee for the first FIX Disaster Recovery
Port to Electronic Access Members as all Electronic Access Members
would be entitled to the first FIX Disaster Recovery Port at no cost.
Also, it is equitable and not unfairly discriminatory to assess no fee
for the first SQF Disaster Recovery Port to Market Makers as all Market
Makers would be entitled to the first SQF Disaster Recovery Port at no
cost.
The Exchange's proposal to assess Members $50 per port, per month,
per account number for additional FIX Disaster Recovery Ports beyond
the first port offered at no cost and $50 per port, per month, per
account number for additional SQF Disaster Recovery Ports beyond the
first port at no cost is reasonable because these ports allow MRX
Members to meet their regulatory obligations. Members only require one
FIX Disaster Recovery Port to submit orders to MRX in the event of a
failover and one SQF Disaster Recovery Port to submit quotes to MRX in
the event of a failover. Additionally, to the extent a Member expended
more than $7,500 for Disaster Recovery Ports, the Exchange would not
charge an MRX Member for additional Disaster Recovery Ports beyond the
cap. The fees for the proposed additional FIX and SQF Disaster Recovery
Ports are equitable and not unfairly discriminatory because any Member
may elect additional ports and would be subject to the same fees.
The Exchange's proposal to offer Disaster Recovery Ports for SQF
Purge Ports, and OTTO Ports at $50 per port, per month, per account
number and CTI Ports, and FIX DROP Ports for $50 per port, per month is
reasonable because these ports allow MRX Members to meet their
regulatory obligations. The proposed Disaster Recovery Port fees are
intended to encourage Members to be efficient when purchasing Disaster
Recovery Ports. The proposed Disaster Recovery Ports are equitable and
not unfairly discriminatory because any Member may elect to purchase an
additional Disaster Recovery Port and would be subject to the same fee,
depending on the port.
Finally, in the event that an MRX Member elects to subscribe to
multiple ports, the Exchange offers a monthly cap beyond which a Member
would be assessed no additional fees for month. As noted above, the SQF
Port and the SQF Purge Port are subject to a monthly cap of $17,500 and
the OTTO Port, CTI Port, FIX Port, FIX Drop Port and all Disaster
Recovery Ports are subject to a monthly cap of $7,500. These caps are
reasonable because they allow Members to limit their fees beyond a
certain level if they elect to purchase multiple ports in a given
month. The caps are also equitable and not unfairly discriminatory
because any Member will be subject to the cap, provided they exceeded
the appropriate dollar amount in a given month.
The proposed port fees are similar to fees assessed today by GEMX,
except that GEMX does not offer the first FIX and SQF Port at no cost,
nor does GEMX offer the first FIX Disaster Recovery Port or the first
SQF Disaster Recovery Port at no cost.\36\ By way of comparison, ISE
assessed fees for ports \37\ in 2019 while offering the same suite of
functionality as MRX, with a limited exception.\38\ Cboe \39\ port fees
are within the range of the proposed fees. While Cboe does not offer
the first order and quote entry port at no cost or Disaster Recovery
Ports at no cost, it tiers its BOE and FIX Logical ports and each
subsequent port fee is lower than MRX's port fees. MRX's FIX DROP Port
Fee is lower than Cboe's DROP Logical Port Fee.\40\ Cboe does not cap
its ports as MRX has proposed herein. BOX port fees \41\ are within the
range of the proposed fees. While BOX does not offer the first order
and quote entry port at no cost or Disaster Recovery Ports at no cost,
it tiers its FIX and SAIL port fees and each subsequent port fee is
lower than MRX's port fees, although the fees are not capped as
proposed herein. MRX's FIX DROP Port Fee is higher than BOX's Drop Copy
Port Fee.\42\ MIAX port fees \43\ are within the range of the proposed
fees. MRX MEI Port users are allocated two (2) Full Service MEI Ports
and two (2) Limited Service MEI Ports per matching engine
[[Page 79929]]
to which they connect.\44\ A MIAX Market Maker may request and be
allocated two (2) Purge Ports per matching engine to which it connects
via a Full Service MEI Port.\45\ MIAX assesses a Real-Time Clearing
Trade Drop Port Fee of $0.0030 per executed contract side per
month.\46\ MIAX assesses a FIX Drop Copy Port fee of $500 per month
\47\ which is lower than MRX's proposed fee. NYSE Arca port fees \48\
are within the range of the proposed fees. For each order/quote entry
port utilized, NYSE Arca Market Makers may utilize, free of charge, one
port dedicated to quote cancellation or ``quote takedown,'' which
port(s) will not be included in the count of order/quote entry ports
utilized.\49\ NYSE ARCA assesses a DROP Copy Port fee of $500 per port
per month \50\ which is lower than MRX's proposed fee.\51\
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\36\ See GEMX Options 7, Section 6.C. (Ports and Other
Services).
\37\ Since 2019, ISE has assessed the following port fees: a FIX
Port Fee of $300 per port, per month, per mnemonic, an SQF Port Fee
and SQF Purge Port Fee of $1,100 per port, per month, an OTTO Port
Fee of $400 per port, per month, per mnemonic with a monthly cap of
$4,000, a CTI Port Fee and FIX DROP Port Fee of $500 per port, per
month, per mnemonic. See Securities Exchange Act Release No. 82568
(January 23, 2018), 83 FR 4086 (January 29, 2018) (SR-ISE-2018-07)
(Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Assess Fees for OTTO Port, CTI Port, FIX Port, FIX Drop
Port and Disaster Recovery Port Connectivity). Of note, ISE assessed
port fees prior to 2019 as well.
\38\ See note 41, supra.
\39\ Cboe assesses a fee of $750 per port up to 5 BOE/FIX
Logical Ports, and $800 per port for over 5 BOE/FIX Logical Ports.
See Cboe's Fees Schedule.
\40\ Cboe assesses $750 for Drop Logical Ports and $850 for
Purge Ports. See Cboe's Fees Schedule.
\41\ BOX assesses tiered FIX Port Fees as follows: $500 per port
per month for the first FIX Port, $250 per port per month for FIX
Ports 2-5 and $150 per port per month for over 5 FIX Ports. BOX
assesses $1000 per month for all SAIL Ports for Market Making and
$500 per month per port up to 5 ports for order entry and $150 per
month for each additional port. See BOX's Fee Schedule.
\42\ BOX assesses Drop Copy Port Fees of $500 per port per month
for each month a Participant is credentialed to use a Drop Copy
Port. Drop Copy Port Fees will be capped at $2,000 per month. See
BOX's Fee Schedule.
\43\ MIAX tiers its FIX Port fees as follows: $550 per month for
the 1st FIX Port, $350 per month per port for the FIX Ports 2
through 5 and $150 per month for over 5 FIX Ports. MIAX tiers its
MEI Port Fees and assesses fees per number of classes and as a
percentage of National Average Daily Volume. MEI Port fees range
from $5,000 to $20,500 per month. The applicable fee rate is the
lesser of either the per class basis or percentage of total national
average daily volume measurement. However, if the Market Maker's
total monthly executed volume during the relevant month is less than
0.060% of the total monthly executed volume reported by The Options
Clearing Corporation in the market maker account type for MIAX-
listed option classes for that month, then the fee will be $14,500
instead of the fee otherwise applicable. MIAX will assess monthly
MEI Port Fees on Market Makers in each month the Member has been
credentialed to use the MEI Port in the production environment and
has been assigned to quote in at least one class. See MIAX's Fee
Schedule.
\44\ MEI Port Fees include MEI Ports at the Primary, Secondary
and Disaster Recovery data centers. MIAX Market Makers may request
additional Limited Service MEI Ports for which MIAX will assess MIAX
Market Makers $100 per month per additional Limited Service MEI Port
for each engine. See MIAX's Fee Schedule.
\45\ For each month in which the MIAX Market Maker has been
credentialed to use Purge Ports in the production environment and
has been assigned to quote in at least one class, the Exchange will
assess the MIAX Market Maker a flat fee of $1,500 per month,
regardless of the number of Purge Ports allocated to the MIAX Market
Maker. The MEI Port Fee for a Market Maker that trades solely in
Proprietary Products is waived until December 31, 2022. See MIAX's
Fee Schedule.
\46\ See MIAX's Fee Schedule.
\47\ See MIAX's Fee Schedule.
\48\ NYSE Arca assesses a tiered order/quote entry port fee of
$450 for the first 40 ports and $150 per port per month for the 41
ports or greater. For purpose of calculating the number of order/
quote entry ports and quote takedown ports, NYSE ARCA aggregates the
ports of affiliates. See NYSE Arca Options Fees and Charges.
\49\ Any quote takedown port utilized by a NYSE Arca Market
Maker that is in excess of the number of order/quote entry ports
utilized will be counted and charged as an order/quote entry port.
See NYSE Arca Options Fees and Charges.
\50\ Only one fee per drop copy port shall apply, even if
receiving drop copies from multiple order/quote entry ports and/or
from NYSE Arca Equities). For the backup datacenter port, no fee
shall apply if configured such that it is duplicative of another
drop copy port of the same user. See NYSE Arca Options Fees and
Charges.
\51\ NYSE ARCA capped fees for Order/Quote Entry Ports, Quote
Takedown Ports, and Drop Copy Ports are based on the total number of
such ports an OTP Holder or OTP Firm is billed for in the month
preceding the beginning of the NYSE ARCA's migration to the Pillar
platform, during the Pillar Migration.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any intermarket burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.
The Exchange believes its proposal to offer the first FIX and SQF
Ports for free, as well as the first Disaster Recovery version of these
ports, permits MRX to set fees, similar to other options markets, while
continuing to allow MRX Members to meet their regulatory obligations.
MRX's offering would permit Electronic Access Members and Market Makers
the ability to submit orders and quote to MRX at no cost. The remainder
of the port offerings (additional FIX and SQF Ports, additional FIX and
SQF Disaster Recovery Ports, SQF Purge Port, OTTO Port, CTI Port, FIX
DROP Port and Disaster Recovery Ports for SQF Purge Ports, OTTO Ports,
CTI Ports, and FIX DROP Ports) are not required for MRX Members to meet
their regulatory obligations. The proposed fees do not impose an undue
burden on competition because the Exchange would uniformly assess the
port fees to all Members, as applicable, and would uniformly apply
monthly caps.
Other markets have higher market share as compared to MRX (1.37%).
The proposed port fees are similar to port fees assessed by other
options markets as noted in this proposal as noted above.
With respect to the higher fees assessed for SQF Ports and SQF
Purge Ports, the Exchange notes that only Market Makers may utilize
these ports. Market Makers are required to provide continuous two-sided
quotes on a daily basis,\52\ and are subject to various obligations
associated with providing liquidity.\53\ As a result of these quoting
obligations, the SQF Port and SQF Purge Port are designed to handle
higher throughput to permit Market Makers to bundle orders to meet
their obligations. The technology to permit Market Makers to submit a
greater number of quotes, in addition to the various risk protections
\54\ afforded to these market participants when quoting, accounts for
the higher SQF Port and SQF Purge Port fees.
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\52\ See MRX Options 2, Section 5.
\53\ See MRX Options 2, Section 4.
\54\ See MRX Options 3, Section 15(a)(3). Market Makers are
offered risk protections to permit them to manage their risk more
effectively.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or 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.\55\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is: (i) necessary or appropriate in the public
interest; (ii) for the protection of investors; or (iii) otherwise in
furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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\55\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-MRX-2022-29 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-MRX-2022-29. 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
[[Page 79930]]
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-MRX-2022-29 and should be submitted on
or before January 18, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\56\
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\56\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-28199 Filed 12-27-22; 8:45 am]
BILLING CODE 8011-01-P
