Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 84374-84376 [2023-26595]

Download as PDF 84374 Federal Register / Vol. 88, No. 232 / Tuesday, December 5, 2023 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–99040; File No. SR–MIAX– 2023–47] Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule November 29, 2023. Pursuant to the provisions of section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 20, 2023, Miami International Securities Exchange, LLC (‘‘MIAX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the MIAX Options Exchange Fee Schedule (the ‘‘Fee Schedule’’) to extend the SPIKES Options Market Maker Incentive Program (the ‘‘Incentive Program’’) until March 31, 2024. The text of the proposed rule change is available on the Exchange’s website at https://www.miaxglobal.com/markets/ us-options/miax-options/rule-filings, at MIAX’s principal office, and at the Commission’s Public Reference Room. khammond on DSKJM1Z7X2PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 16:35 Dec 04, 2023 Jkt 262001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Fee Schedule to extend the Incentive Program until March 31, 2024. On September 30, 2021, the Exchange filed its initial proposal to implement a SPIKES Options Market Maker Incentive Program for SPIKES options to incentivize Market Makers 3 to improve liquidity, available volume, and the quote spread width of SPIKES options beginning October 1, 2021, and ending December 31, 2021.4 Technical details regarding the Incentive Program were published in a Regulatory Circular on September 30, 2021.5 On October 12, 2021, the Exchange withdrew SR– MIAX–2021–45 and refiled its proposal to implement the Incentive Program to provide additional details.6 In that filing, the Exchange specifically noted that the Incentive Program would expire at the end of the period (December 31, 2021) unless the Exchange filed another 19b–4 Filing to amend the fees (or extend the Incentive Program).7 Between December 23, 2021, and July 12, 2023, the Exchange filed several proposals to extend the Incentive Program, with the last extension period ending December 31, 2023.8 In each of those filings, the Exchange specifically noted that the Incentive Program would expire at the end of the then-current period unless the Exchange filed another 19b–4 Filing to amend the fees (or extend the Incentive Program).9 3 The term ‘‘Market Makers’’ refers to ‘‘Lead Market Makers’’, ‘‘Primary Lead Market Makers’’ and ‘‘Registered Market Makers’’ collectively. See Exchange Rule 100. 4 See SR–MIAX–2021–45. 5 See MIAX Options Regulatory Circular 2021–56, SPIKES Options Market Maker Incentive Program (September 30, 2021) available at https:// www.miaxglobal.com/sites/default/files/circularfiles/MIAX_Options_RC_2021_56.pdf. 6 See Securities Exchange Act Release No. 93424 (October 26, 2021), 86 FR 60322 (November 1, 2021) (SR–MIAX–2021–49). 7 See id. 8 See Securities Exchange Act Release Nos. 93881 (December 30, 2021), 87 FR 517 (January 5, 2022) (SR–MIAX–2021–63); 94574 (April 1, 2022), 87 FR 20492 (April 7, 2022) (SR–MIAX–2022–12); 95259 (July 12, 2022), 87 FR 42754 (July 17, 2022) (SR– MIAX–2022–24); 96007 (October 7, 2022), 87 FR 62151 (October 13, 2022) (SR–MIAX–2022–32); 96588 (December 28, 2022), 88 FR 381 (January 4, 2023) (SR–MIAX–2022–47); 97239 (April 3, 2023), 88 FR 20930 (April 7, 2023) (SR–MIAX–2023–13); and 97883 (July 12, 2023), 88 FR 45941 (July 18, 2023) (SR–MIAX–2023–26). 9 See id. PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 The Exchange now proposes to extend the Incentive Program until March 31, 2024.10 The Exchange proposes to extend the Incentive Program for SPIKES options to continue to incentivize Market Makers to improve liquidity, available volume, and the quote spread width of SPIKES options. Currently, to be eligible to participate in the Incentive Program, a Market Maker must meet certain minimum requirements related to quote spread width in certain in-the-money (ITM) and out-of-the-money (OTM) options as determined by the Exchange and communicated to Members via Regulatory Circular.11 Market Makers must also satisfy a minimum time in the market in the front 2 expiry months of 70%, and have an average quote size of 25 contracts. The Exchange established two separate incentive compensation pools that are used to compensate Market Makers that satisfy the criteria pursuant to the Incentive Program. The first pool (Incentive 1) has a total amount of $40,000 per month, which is allocated to Market Makers that meet the minimum requirements of the Incentive Program. Market Makers are required to meet minimum spread width requirements in a select number of ITM and OTM SPIKES option contracts as determined by the Exchange and communicated to Members via Regulatory Circular.12 A complete description of how the Exchange calculates the minimum spread width requirements in ITM and OTM SPIKES options can be found in the published Regulatory Circular.13 Market Makers are also required to maintain the minimum spread width, described above, for at least 70% of the time in the front two (2) SPIKES options contract expiry months and maintain an average quote size of at least 25 SPIKES options contracts. The amount available to each individual Market Maker is capped at $10,000 per month for satisfying the minimum requirements of the Incentive Program. In the event that more than four Market Makers meet the requirements of the Incentive Program, each qualifying Market Maker is entitled to receive a pro-rated share of the $40,000 monthly compensation pool dependent upon the number of qualifying Market Makers in that particular month. The second pool (Incentive 2 Pool) is capped at a total amount of $100,000 10 The Exchange notes that at the end of the extension period, the Incentive Program will expire unless the Exchange files another 19b–4 Filing to amend the terms or extend the Incentive Program. 11 See supra note 5. 12 See id. 13 See id. E:\FR\FM\05DEN1.SGM 05DEN1 Federal Register / Vol. 88, No. 232 / Tuesday, December 5, 2023 / Notices khammond on DSKJM1Z7X2PROD with NOTICES per month which is used during the Incentive Program to further incentivize Market Makers who meet or exceed the requirements of Incentive 1 (‘‘qualifying Market Makers’’) to provide tighter quote width spreads. The Exchange ranks each qualifying Market Maker’s quote width spread relative to each other qualifying Market Maker’s quote width spread. Market Makers with tighter spreads in certain strikes, as determined by the Exchange and communicated to Members via Regulatory Circular,14 are eligible to receive a pro-rated share of the compensation pool as calculated by the Exchange and communicated to Members via Regulatory Circular,15 not to exceed $25,000 per Member per month. Qualifying Market Makers are ranked relative to each other based on the quality of their spread width (i.e., tighter spreads are ranked higher than wider spreads) and the Market Maker with the best quality spread width receives the highest rebate, while other eligible qualifying Market Makers receive a rebate relative to their quality spread width. The Exchange proposes to extend the Incentive Program until March 31, 2024. The Exchange does not propose to make any amendments to how it calculates any of the incentives provided for in Incentive Pools 1 or 2. The details of the Incentive Program can continue to be found in the Regulatory Circular that was published on September 30, 2021, to all Exchange Members.16 The purpose of this extension is to continue to incentivize Market Makers to improve liquidity, available volume, and the quote spread width of SPIKES options. The Exchange will announce the extension of the Incentive Program to all Members via a Regulatory Circular. 2. Statutory Basis The Exchange believes that its proposal to amend its Fee Schedule is consistent with section 6(b) of the Act 17 in general, and furthers the objectives of section 6(b)(4) of the Act 18 in particular, in that it is an equitable allocation of reasonable fees and other charges among its members and issuers and other persons using its facilities. The Exchange also believes the proposal furthers the objectives of section 6(b)(5) of the Act in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and 14 See id. id. 16 See id. 17 15 U.S.C. 78f(b). 18 15 U.S.C. 78f(b)(4) and (5). 15 See VerDate Sep<11>2014 16:35 Dec 04, 2023 Jkt 262001 open market and a national market system, and, in general to protect investors and the public interest and is not designed to permit unfair discrimination between customers, issuers, brokers and dealers. The Exchange believes that it is reasonable, equitable, and not unfairly discriminatory to extend the Incentive Program for Market Makers in SPIKES options until March 31, 2024. The Incentive Program is reasonably designed because it will continue to incentivize Market Makers to provide quotes and increased liquidity in select SPIKES options contracts. The Incentive Program is reasonable, equitably allocated and not unfairly discriminatory because all Market Makers in SPIKES options may continue to qualify for Incentive 1 and Incentive 2, dependent upon each Market Maker’s quoting in SPIKES options in a particular month. Additionally, if a SPIKES Market Maker does not satisfy the requirements of Incentive Pool 1 or 2, then it simply will not receive the rebate offered by the Incentive Program for that month. The Exchange believes that it is reasonable, equitable and not unfairly discriminatory to continue to offer this financial incentive to SPIKES Market Makers because it will continue to benefit all market participants trading in SPIKES options. SPIKES options is a Proprietary Product on the Exchange and the continuation of the Incentive Program encourages SPIKES Market Makers to satisfy a heightened quoting standard, average quote size, and time in market. A continued increase in quoting activity and tighter quotes may yield a corresponding increase in order flow from other market participants, which benefits all investors by deepening the Exchange’s liquidity pool, potentially providing greater execution incentives and opportunities, while promoting market transparency and improving investor protection. The Exchange believes that the Incentive Program is equitable and not unfairly discriminatory because it will continue to promote an increase in SPIKES options liquidity, which may facilitate tighter spreads and an increase in trading opportunities to the benefit of all market participants. The Exchange believes it is reasonable to operate the Incentive Program for a continued limited period of time to strengthen market quality for all market participants. The resulting increased volume and liquidity will benefit those Members who are eligible to participate in the Incentive Program and will also continue to benefit those Members who are not eligible to participate in the PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 84375 Incentive Program by providing more trading opportunities and tighter spreads. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Intra-Market Competition The Exchange believes that the proposed extension of the Incentive Program to March 31, 2024, would continue to increase intra-market competition by incentivizing Market Makers to quote SPIKES options, which will continue to enhance the quality of quoting and increase the volume of contracts available to trade in SPIKES options. To the extent that this purpose is achieved, all the Exchange’s market participants should benefit from the improved market liquidity for SPIKES options. Enhanced market quality and increased transaction volume in SPIKES options that results from the anticipated increase in Market Maker activity on the Exchange will benefit all market participants and improve competition on the Exchange. Inter-Market Competition The Exchange does not believe that the proposed rule changes will impose any burden on inter-market competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed extension of the Incentive Program applies only to the Market Makers in SPIKES Options, which are traded exclusively on the Exchange. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others 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,19 and Rule 19b–4(f)(2) 20 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public 19 15 20 17 E:\FR\FM\05DEN1.SGM U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 05DEN1 84376 Federal Register / Vol. 88, No. 232 / Tuesday, December 5, 2023 / Notices khammond on DSKJM1Z7X2PROD with NOTICES interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. submitted on or before December 26, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Sherry R. Haywood, Assistant Secretary. 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: [FR Doc. 2023–26595 Filed 12–4–23; 8:45 am] Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– MIAX–2023–47 on the subject line. Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 517, Quote Types Defined Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to file number SR–MIAX–2023–47. 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 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–MIAX–2023–47 and should be Pursuant to the provisions of section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 16, 2023, Miami International Securities Exchange, LLC (‘‘MIAX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I and II 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. VerDate Sep<11>2014 16:35 Dec 04, 2023 Jkt 262001 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–99041; File No. SR–MIAX– 2023–45] November 29, 2023. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to amend Exchange Rule 517, Quote Types Defined. The text of the proposed rule change is available on the Exchange’s website at https://www.miaxglobal.com/markets/ us-options/miax-options/rule-filings, at MIAX’s principal office, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The 21 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 517, Quote Types Defined. Specifically, the Exchange proposes to adopt new Interpretations and Policies .02 to Rule 517 to adopt new risk protection behavior for replacement Standard quotes 3 that are rejected. Background Market Makers 4 on the Exchange have heightened obligations separate from other market participants. Transactions of a Market Maker should constitute a course of dealings reasonably calculated to contribute to the maintenance of a fair and orderly market, and Market Makers should not make bids 5 or offers 6 or enter into transactions that are inconsistent with such a course of dealings.7 A quotation may only be entered by a Market Maker, and only in the options classes to which the Market Maker is appointed under Rule 602.8 A Market Maker’s bid and offer for a series of option contracts shall state a price accompanied by the number of contracts at that price the Market Maker is willing to buy or sell upon receipt of an order or upon interaction with a quotation entered by another Market Maker on the Exchange.9 Additionally, a Market Maker that enters a bid (offer) on the Exchange must enter an offer (bid) within the spread allowable under Rule 603(b)(4).10 The Exchange has three classes of Market Makers; Primary Lead Market Makers, Lead Market Makers, and Registered Market Makers.11 Further, each class of Market Maker has its own 3 A Standard quote is a quote submitted by a Market Maker that cancels and replaces the Market Maker’s previous Standard quote, if any. See Exchange Rule 517(a)(1). 4 The term ‘‘Market Makers’’ refers to ‘‘Lead Market Makers’’, ‘‘Primary Lead Market Makers’’ and ‘‘Registered Market Makers’’ collectively. See Exchange Rule 100. 5 The term ‘‘bid’’ means a limit order or quote to buy one or more option contracts. See Exchange Rule 100. 6 The term ‘‘offer’’ means a limit order or quote to sell one or more option contracts. See Exchange Rule 100. 7 See Exchange Rule 603(a). 8 See Exchange Rule 604(a). 9 See Exchange Rule 604(b). 10 See Exchange Rule 604(c). 11 See supra note 4. E:\FR\FM\05DEN1.SGM 05DEN1

Agencies

[Federal Register Volume 88, Number 232 (Tuesday, December 5, 2023)]
[Notices]
[Pages 84374-84376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26595]



[[Page 84374]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99040; File No. SR-MIAX-2023-47]


Self-Regulatory Organizations; Miami International Securities 
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Its Fee Schedule

November 29, 2023.
    Pursuant to the provisions of section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on November 20, 2023, Miami International 
Securities Exchange, LLC (``MIAX'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by the Exchange. The Commission is publishing this notice 
to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the MIAX Options Exchange Fee 
Schedule (the ``Fee Schedule'') to extend the SPIKES Options Market 
Maker Incentive Program (the ``Incentive Program'') until March 31, 
2024.
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-options/miax-options/rule-filings, at MIAX's principal office, and at the Commission's 
Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to extend the 
Incentive Program until March 31, 2024.
    On September 30, 2021, the Exchange filed its initial proposal to 
implement a SPIKES Options Market Maker Incentive Program for SPIKES 
options to incentivize Market Makers \3\ to improve liquidity, 
available volume, and the quote spread width of SPIKES options 
beginning October 1, 2021, and ending December 31, 2021.\4\ Technical 
details regarding the Incentive Program were published in a Regulatory 
Circular on September 30, 2021.\5\ On October 12, 2021, the Exchange 
withdrew SR-MIAX-2021-45 and refiled its proposal to implement the 
Incentive Program to provide additional details.\6\ In that filing, the 
Exchange specifically noted that the Incentive Program would expire at 
the end of the period (December 31, 2021) unless the Exchange filed 
another 19b-4 Filing to amend the fees (or extend the Incentive 
Program).\7\
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    \3\ The term ``Market Makers'' refers to ``Lead Market Makers'', 
``Primary Lead Market Makers'' and ``Registered Market Makers'' 
collectively. See Exchange Rule 100.
    \4\ See SR-MIAX-2021-45.
    \5\ See MIAX Options Regulatory Circular 2021-56, SPIKES Options 
Market Maker Incentive Program (September 30, 2021) available at 
https://www.miaxglobal.com/sites/default/files/circular-files/MIAX_Options_RC_2021_56.pdf.
    \6\ See Securities Exchange Act Release No. 93424 (October 26, 
2021), 86 FR 60322 (November 1, 2021) (SR-MIAX-2021-49).
    \7\ See id.
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    Between December 23, 2021, and July 12, 2023, the Exchange filed 
several proposals to extend the Incentive Program, with the last 
extension period ending December 31, 2023.\8\ In each of those filings, 
the Exchange specifically noted that the Incentive Program would expire 
at the end of the then-current period unless the Exchange filed another 
19b-4 Filing to amend the fees (or extend the Incentive Program).\9\
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    \8\ See Securities Exchange Act Release Nos. 93881 (December 30, 
2021), 87 FR 517 (January 5, 2022) (SR-MIAX-2021-63); 94574 (April 
1, 2022), 87 FR 20492 (April 7, 2022) (SR-MIAX-2022-12); 95259 (July 
12, 2022), 87 FR 42754 (July 17, 2022) (SR-MIAX-2022-24); 96007 
(October 7, 2022), 87 FR 62151 (October 13, 2022) (SR-MIAX-2022-32); 
96588 (December 28, 2022), 88 FR 381 (January 4, 2023) (SR-MIAX-
2022-47); 97239 (April 3, 2023), 88 FR 20930 (April 7, 2023) (SR-
MIAX-2023-13); and 97883 (July 12, 2023), 88 FR 45941 (July 18, 
2023) (SR-MIAX-2023-26).
    \9\ See id.
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    The Exchange now proposes to extend the Incentive Program until 
March 31, 2024.\10\
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    \10\ The Exchange notes that at the end of the extension period, 
the Incentive Program will expire unless the Exchange files another 
19b-4 Filing to amend the terms or extend the Incentive Program.
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    The Exchange proposes to extend the Incentive Program for SPIKES 
options to continue to incentivize Market Makers to improve liquidity, 
available volume, and the quote spread width of SPIKES options. 
Currently, to be eligible to participate in the Incentive Program, a 
Market Maker must meet certain minimum requirements related to quote 
spread width in certain in-the-money (ITM) and out-of-the-money (OTM) 
options as determined by the Exchange and communicated to Members via 
Regulatory Circular.\11\ Market Makers must also satisfy a minimum time 
in the market in the front 2 expiry months of 70%, and have an average 
quote size of 25 contracts. The Exchange established two separate 
incentive compensation pools that are used to compensate Market Makers 
that satisfy the criteria pursuant to the Incentive Program.
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    \11\ See supra note 5.
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    The first pool (Incentive 1) has a total amount of $40,000 per 
month, which is allocated to Market Makers that meet the minimum 
requirements of the Incentive Program. Market Makers are required to 
meet minimum spread width requirements in a select number of ITM and 
OTM SPIKES option contracts as determined by the Exchange and 
communicated to Members via Regulatory Circular.\12\ A complete 
description of how the Exchange calculates the minimum spread width 
requirements in ITM and OTM SPIKES options can be found in the 
published Regulatory Circular.\13\ Market Makers are also required to 
maintain the minimum spread width, described above, for at least 70% of 
the time in the front two (2) SPIKES options contract expiry months and 
maintain an average quote size of at least 25 SPIKES options contracts. 
The amount available to each individual Market Maker is capped at 
$10,000 per month for satisfying the minimum requirements of the 
Incentive Program. In the event that more than four Market Makers meet 
the requirements of the Incentive Program, each qualifying Market Maker 
is entitled to receive a pro-rated share of the $40,000 monthly 
compensation pool dependent upon the number of qualifying Market Makers 
in that particular month.
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    \12\ See id.
    \13\ See id.
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    The second pool (Incentive 2 Pool) is capped at a total amount of 
$100,000

[[Page 84375]]

per month which is used during the Incentive Program to further 
incentivize Market Makers who meet or exceed the requirements of 
Incentive 1 (``qualifying Market Makers'') to provide tighter quote 
width spreads. The Exchange ranks each qualifying Market Maker's quote 
width spread relative to each other qualifying Market Maker's quote 
width spread. Market Makers with tighter spreads in certain strikes, as 
determined by the Exchange and communicated to Members via Regulatory 
Circular,\14\ are eligible to receive a pro-rated share of the 
compensation pool as calculated by the Exchange and communicated to 
Members via Regulatory Circular,\15\ not to exceed $25,000 per Member 
per month. Qualifying Market Makers are ranked relative to each other 
based on the quality of their spread width (i.e., tighter spreads are 
ranked higher than wider spreads) and the Market Maker with the best 
quality spread width receives the highest rebate, while other eligible 
qualifying Market Makers receive a rebate relative to their quality 
spread width.
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    \14\ See id.
    \15\ See id.
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    The Exchange proposes to extend the Incentive Program until March 
31, 2024. The Exchange does not propose to make any amendments to how 
it calculates any of the incentives provided for in Incentive Pools 1 
or 2. The details of the Incentive Program can continue to be found in 
the Regulatory Circular that was published on September 30, 2021, to 
all Exchange Members.\16\ The purpose of this extension is to continue 
to incentivize Market Makers to improve liquidity, available volume, 
and the quote spread width of SPIKES options. The Exchange will 
announce the extension of the Incentive Program to all Members via a 
Regulatory Circular.
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    \16\ See id.
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2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with section 6(b) of the Act \17\ in general, and 
furthers the objectives of section 6(b)(4) of the Act \18\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among its members and issuers and other persons using 
its facilities. The Exchange also believes the proposal furthers the 
objectives of section 6(b)(5) of the Act in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest and is not designed to permit unfair discrimination between 
customers, issuers, brokers and dealers.
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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that it is reasonable, equitable, and not 
unfairly discriminatory to extend the Incentive Program for Market 
Makers in SPIKES options until March 31, 2024. The Incentive Program is 
reasonably designed because it will continue to incentivize Market 
Makers to provide quotes and increased liquidity in select SPIKES 
options contracts. The Incentive Program is reasonable, equitably 
allocated and not unfairly discriminatory because all Market Makers in 
SPIKES options may continue to qualify for Incentive 1 and Incentive 2, 
dependent upon each Market Maker's quoting in SPIKES options in a 
particular month. Additionally, if a SPIKES Market Maker does not 
satisfy the requirements of Incentive Pool 1 or 2, then it simply will 
not receive the rebate offered by the Incentive Program for that month.
    The Exchange believes that it is reasonable, equitable and not 
unfairly discriminatory to continue to offer this financial incentive 
to SPIKES Market Makers because it will continue to benefit all market 
participants trading in SPIKES options. SPIKES options is a Proprietary 
Product on the Exchange and the continuation of the Incentive Program 
encourages SPIKES Market Makers to satisfy a heightened quoting 
standard, average quote size, and time in market. A continued increase 
in quoting activity and tighter quotes may yield a corresponding 
increase in order flow from other market participants, which benefits 
all investors by deepening the Exchange's liquidity pool, potentially 
providing greater execution incentives and opportunities, while 
promoting market transparency and improving investor protection.
    The Exchange believes that the Incentive Program is equitable and 
not unfairly discriminatory because it will continue to promote an 
increase in SPIKES options liquidity, which may facilitate tighter 
spreads and an increase in trading opportunities to the benefit of all 
market participants. The Exchange believes it is reasonable to operate 
the Incentive Program for a continued limited period of time to 
strengthen market quality for all market participants. The resulting 
increased volume and liquidity will benefit those Members who are 
eligible to participate in the Incentive Program and will also continue 
to benefit those Members who are not eligible to participate in the 
Incentive Program by providing more trading opportunities and tighter 
spreads.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
Intra-Market Competition
    The Exchange believes that the proposed extension of the Incentive 
Program to March 31, 2024, would continue to increase intra-market 
competition by incentivizing Market Makers to quote SPIKES options, 
which will continue to enhance the quality of quoting and increase the 
volume of contracts available to trade in SPIKES options. To the extent 
that this purpose is achieved, all the Exchange's market participants 
should benefit from the improved market liquidity for SPIKES options. 
Enhanced market quality and increased transaction volume in SPIKES 
options that results from the anticipated increase in Market Maker 
activity on the Exchange will benefit all market participants and 
improve competition on the Exchange.
Inter-Market Competition
    The Exchange does not believe that the proposed rule changes will 
impose any burden on inter-market competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed extension of the Incentive Program applies only to the Market 
Makers in SPIKES Options, which are traded exclusively on the Exchange.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    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,\19\ and Rule 19b-4(f)(2) \20\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public

[[Page 84376]]

interest, for the protection of investors, or otherwise in furtherance 
of the purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.
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    \19\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \20\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-MIAX-2023-47 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-MIAX-2023-47. 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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-MIAX-2023-47 and should be 
submitted on or before December 26, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-26595 Filed 12-4-23; 8:45 am]
BILLING CODE 8011-01-P
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