Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Fees for QCC Orders and cQCC Orders, 67983-67986 [2024-18794]

Download as PDF Federal Register / Vol. 89, No. 163 / Thursday, August 22, 2024 / Notices https://www.miaxglobal.com/markets/ us-options/miax-sapphire/rule-filings, at the Exchange’s principal office, and at the Commission’s Public Reference Room. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100746; File No. SR– SAPPHIRE–2024–11] Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Fees for QCC Orders and cQCC Orders August 16, 2024. 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 August 6, 2024, MIAX Sapphire, LLC (‘‘MIAX Sapphire’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘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 is filing a proposal to amend the MIAX Sapphire Fee Schedule (the ‘‘Fee Schedule’’) to adopt fees for Qualified Contingent Cross (‘‘QCC’’) Orders 3 and complex Qualified Contingent Cross (‘‘cQCC’’) Orders.4 MIAX Sapphire will commence operations as a national securities exchange registered under Section 6 of the Act 5 on August 12, 2024.6 While changes to the Fee Schedule pursuant to this proposal are effective upon filing, the Exchange has designated these changes to be operative on August 12, 2024. The text of the proposed rule change is available on the Exchange’s website at ddrumheller on DSK120RN23PROD with NOTICES1 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 A Qualified Contingent Cross Order is comprised of an originating order to buy or sell at least 1,000 contracts, or 10,000 mini-option contracts, that is identified as being part of a qualified contingent trade, as that term is defined in Interpretation and Policy .01 of MIAX Sapphire Rule 516, coupled with a contra-side order or orders totaling an equal number of contracts. See Exchange Rule 516(j). 4 A Complex Qualified Contingent Cross of ‘‘cQCC’’ Order is comprised of an originating complex order to buy or sell where each component is at least 1,000 contracts that is identified as being part of a qualified contingent trade, as defined in Rule 516, Interpretation and Policy .01, coupled with a contra-side complex order or orders totaling an equal number of contracts. See Exchange Rule 518(b)(4). 5 15 U.S.C. 78f. 6 See Securities Exchange Act Release No. 100539 (July 15, 2024), 89 FR 58848 (July 19, 2024) (File No. 10–240) (order approving application of MIAX Sapphire, LLC for registration as a national securities exchange). VerDate Sep<11>2014 17:28 Aug 21, 2024 Jkt 262001 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 adopt Section 1)a)ii) of the Fee Schedule as ‘‘QCC Fees’’ to adopt certain fees and rebates applicable to QCC Orders. Additionally, the Exchange proposes to adopt Section 1)a)iii) of the Fee Schedule as ‘‘cQCC Fees’’ to adopt certain fees and rebates applicable to cQCC Orders. Finally, the Exchange proposes to adopt Section 1)a)i) to the Fee Schedule which the Exchange is proposing to reserve to be amended by a later proposal. The Exchange notes that these fees are identical to fees charged on the Exchange’s affiliate, Miami International Securities Exchange, LLC (‘‘MIAX Options’’).7 Background A QCC Order is comprised of an originating order to buy or sell at least 1,000 contracts that is identified as being part of a qualified contingent trade, coupled with a contra-side order or orders totaling an equal number of contracts.8 A ‘‘qualified contingent trade’’ is a transaction consisting of two or more component orders, executed as agent or principal, where: (a) at least one component is an NMS Stock, as defined in Rule 600 of Regulation NMS under the Exchange Act; (b) all components are effected with a product or price contingency that either has 7 See MIAX Options Exchange Fee Schedule, Section 1)a)vii) ‘‘QCC Fees’’ and Section 1)a)viii) ‘‘cQCC Fees’’ available at https:// www.miaxglobal.com/markets/us-options/miaxoptions/fees. 8 See Exchange Rule 516(j). PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 67983 been agreed to by all the respective counterparties or arranged for by a broker-dealer as principal or agent; (c) the execution of one component is contingent upon the execution of all other components at or near the same time; (d) the specific relationship between the component orders (e.g., the spread between the prices of the component orders) is determined by the time the contingent order is placed; (e) the component orders bear a derivative relationship to one another, represent different classes of shares of the same issuer, or involve the securities of participants in mergers or with intentions to merge that have been announced or cancelled; and (f) the transaction is fully hedged (without regard to any prior existing position) as a result of other components of the contingent trade.9 Proposal To Adopt QCC Order Fees and Rebates The Exchange proposes to adopt Section 1)a)ii) of the Fee Schedule as ‘‘QCC Fees’’ to adopt certain fees and rebates applicable to QCC Orders. The Exchange proposes to assess initiator fees as follows: $0.00 per contract for the Priority Customer 10 origin; $0.12 for Public Customer 11 that is Not a Priority Customer; and $0.20 per contract for all other market participant origins (i.e., Sapphire Market Makers,12 nonSapphire Market Makers, non-Member Broker-Dealers, and Firm).13 The Exchange proposes to assess contra-side fees for all market participant origins, except the Priority Customer origin, as follows: $0.12 per contract side for the Public Customer that is not a Priority Customer origin; and $0.20 per contract side for Professional origins. The Exchange proposes to establish that rebates are paid to the Electronic 9 See Interpretation and Policy .01 of Exchange Rule 516. 10 The term ‘‘Priority Customer’’ means a person or entity that (i) is not a broker or dealer in securities, and (ii) does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). See Exchange Rule 100. 11 The term ‘‘Public Customer’’ means a person that is not a broker or dealer in securities. See Exchange Rule 100. 12 The term ‘‘Market Makers’’ means a Member registered with the Exchange for the purposes of making markets in options contracts traded on the Exchange and that is vested with the rights and responsibilities specified in Chapter VI of MIAX Sapphire Rules. See Exchange Rule 100. 13 For the purposes of this filing, the origins comprising Sapphire Market Makers, non-Sapphire Market Makers, non-Member broker-dealers and firms will be referred to as ‘‘Professional.’’ E:\FR\FM\22AUN1.SGM 22AUN1 67984 Federal Register / Vol. 89, No. 163 / Thursday, August 22, 2024 / Notices Exchange Member (‘‘EEM’’) 14 that entered the QCC Order, depending upon the origin type and the origin type on the contra-side. Specifically, the Exchange proposes to provide the following rebates for an EEM when the contra-side is a Priority Customer: $0.00 per contract for the Priority Customer origin; $0.07 per contract for the Public Customer that is not a Priority Customer origin; and $0.17 per contract for Professional origins. The Exchange proposes to provide the following rebates for an EEM when the contra-side is a Public Customer that is not a Priority Customer: $0.07 per contract for the Priority Customer origin; $0.17 per contract for the Public Customer that is not a Priority Customer origin; and $0.25 per contract for Professional origins. The Exchange proposes to provide the following rebates for an EEM when the contra-side is all other origins (i.e., neither a Priority Customer nor a Public Customer that is not a Priority Customer): $0.17 per contract for the Priority Customer origin; $0.25 per contract for the Public Customer that is not a Priority Customer origin; and $0.30 per contract for Professional origins. The Exchange also proposes to adopt a note below the table of fees and rebates for QCC Orders that will specify that per contract rebates will be paid to the EEM that enters the QCC Order into the MIAX Sapphire System.15 Additionally, the Exchange proposes to include a definition of a QCC order in the note which will provide that, a QCC transaction is comprised of an ‘initiating order’ to buy (sell) at least 1,000 contracts that is identified as being part of a qualified contingent trade, coupled with a contra-side order to sell (buy) an equal number of contracts. The Exchange notes that with regard to order entry, the first order submitted into the System is marked as the initiating side and the second order is marked as the contra-side. ddrumheller on DSK120RN23PROD with NOTICES1 Proposal To Adopt cQCC Order Fees and Rebates The Exchange proposes to adopt section 1)a)iii) to the Fee Schedule as ‘‘cQCC Fees’’ to adopt fees and rebates applicable to cQCC Orders, which are 14 The term ‘‘Electronic Exchange Member’’ or ‘‘EEM’’ means the holder of a Trading Permit who is a Member representing as agent Public Customer Orders or Non-Customer Orders on the Exchange and those non-Market Maker Members conducting proprietary trading. Electronic Exchange Members are deemed ‘‘members’’ under the Exchange Act. See Exchange Rule 100. 15 The term ‘‘System’’ means the automated trading system used by the Exchange for the trading of securities. See Exchange Rule 100. VerDate Sep<11>2014 18:29 Aug 21, 2024 Jkt 262001 assessed per contract per leg. A cQCC Order is comprised of an originating complex order 16 to buy or sell where each component is at least 1,000 contracts that is identified as being part of a qualified contingent trade 17 coupled with a contra-side complex order or orders totaling an equal number of contracts.18 The Exchange proposes to adopt initiator fees for all market participants, except the Priority Customer origin, as follows: $0.12 per contract side for the Public Customer that is not a Priority Customer origin; and $0.20 per contract side for Professional origins. The Exchange does not propose to charge an initiator fee for the Priority Customer origin. The Exchange proposes to assess contra-side fees for all market participants, except the Priority Customer origin, as follows: $0.12 per contract side for the Public Customer that is not a Priority Customer origin; and $0.20 per contract side for Professional origins. The Exchange proposes to provide the following rebates for an EEM when the contra-side is a Priority Customer: $0.00 per contract for the Priority Customer origin; $0.07 per contract for the Public Customer that is not a Priority Customer origin; and $0.17 per contract for Professional origins. The Exchange also proposes to provide the following rebates for an EEM when the contra-side is a Public Customer that is not Priority Customer: $0.07 per contract for the Priority Customer origin; $0.17 per contract for the Public Customer that is not a Priority Customer origin; and $0.25 per contract for Professional origins. Finally, the Exchange proposes to provide the following rebates for an EEM when the contra-side is all other origins (i.e., neither a Priority Customer nor a Public Customer that is not a Priority Customer): $0.17 per contract for the Priority Customer origin; $0.25 per contract for the Public Customer that is not a Priority Customer origin; and $0.30 per contract for Professional origins. The Exchange also proposes to adopt a note below the table of fees and 16 In sum, a ‘‘complex order’’ is any order involving the concurrent purchase and/or sale of two or more different options in the same underlying security (the ‘‘legs’’ or ‘‘components’’ of the complex order), for the same account, in a conforming or non-conforming ratio for the purposes of executing a particular investment strategy. See Exchange Rule 518(a). A complex order can also be a ‘‘stock-option order’’ with a conforming or non-conforming ratio as defined in Exchange Rule 518(a). 17 See supra note 4. 18 Trading of cQCC Orders is governed by Exchange Rule 515(g)(4). PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 rebates for cQCC Orders. The Exchange proposes to specify that per contract rebates will be paid to the EEM that enters the cQCC Order into the MIAX Sapphire System. Additionally, the note will provide that, all fees and rebates are per contract leg. Finally, the note will provide the definition of a cQCC transaction as one that is comprised of an ‘initiating complex order’ to buy (sell) where each component is at least 1,000 contracts that is identified as being part of a qualified contingent trade, coupled with a contra-side complex order or orders to sell (buy) an equal number of contracts. The Exchange also proposes to add the following reference sentence at the end of the notes section following the table of fees and rebates for cQCC Orders: ‘‘The stock handling fee for the stock leg of cQCC transactions is described in Section 1)a)v) of the Fee Schedule.’’ This will provide clarity to the Exchange’s Fee Schedule and help signal to market participants that the stock handling fees for the stock leg of cQCC transactions is located in a separate section of the Fee Schedule. Finally, the Exchange also notes that competing exchanges provide similar rebate and fee structures and amounts for QCC and cQCC Orders.19 19 See e.g., BOX Exchange LLC (‘‘BOX’’) Fee Schedule (dated January 2, 2024), Section IV.D., Qualified Contingent Cross (‘‘QCC’’) Transactions, available at https://boxoptions.com/resources/feeschedule/. BOX does not assess any fee for QCC orders from public customers and professional customers and assesses broker-dealers and market makers a $0.20 fee per contract for their agency (originating) and contra-side QCC orders. BOX provides tiered rebates depending on the parties to each QCC transaction. For example, when only one side of a QCC transaction is a broker-dealer or market maker, BOX provides rebates ranging from $0.14 per contract to $0.17 per contract. When both parties to a QCC transaction are a broker-dealer or market maker (i.e., professionals), BOX provides higher rebates ranging from $0.22 per contract to $0.27 per contract, similar to the Exchange’s proposed rebate structure. See also NYSE American LLC (‘‘NYSE American’’) Options Exchange Fee Schedule (effective as of July 1, 2024), Section I.F., Qualified Contingent Cross (‘‘QCC’’) Fees & Credits, available online at https://www.nyse.com/ publicdocs/nyse/markets/american-options/NYSE_ American_Options_Fee_Schedule.pdf. NYSE American does not assess any fee for QCC orders from customers or professional customers and assesses market makers, firms and broker-dealers a $0.20 fee per contract side for their QCC orders. NYSE American provides rebates depending on the parties to each QCC transaction. For example, when a Floor Broker executes a customer or professional customer QCC order when the contra-side is a market maker, firm or broker-dealer, NYSE American provides a lower rebate of $0.12 per contract. When a Floor Broker executes a market maker, firm or broker-dealer QCC order when the contra-side is another market maker, firm or brokerdealer, NYSE American provides a higher rebate of $0.18 per contract. See also MIAX Options Exchange Fee Schedule, Section (1)(a)(vii) and (viii) available online at https://www.miaxglobal.com/ markets/us-options/miax-options/fees. E:\FR\FM\22AUN1.SGM 22AUN1 Federal Register / Vol. 89, No. 163 / Thursday, August 22, 2024 / Notices ddrumheller on DSK120RN23PROD with NOTICES1 Implementation The proposed fee changes are immediately effective. 2. Statutory Basis The Exchange believes that its proposal to amend its Fee Schedule is consistent with Section 6(b) of the Act 20 in general, and furthers the objectives of Section 6(b)(4) of the Act 21 in particular, in that it is an equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. The Exchange also believes the proposal furthers the objectives of Section 6(b)(5) of the Act 22 in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest and is not designed to permit unfair discrimination between customers, issuers, brokers and dealers. The Exchange believes the proposed fees and rebates for QCC and cQCC Orders is reasonable because the Exchange believes the proposal will increase competition and potentially attract additional QCC and cQCC Order flow from various origins to the Exchange, which will grow the Exchange’s market share in this segment. The Exchange also believes it is reasonable and not unfairly discriminatory to provide higher rebates for QCC and cQCC Orders for EEMs that trade against origins other than Priority Customer or Public Customer because Priority Customer and Public Customer QCC and cQCC Orders are already incentivized with reduced fees for the initiator and contra-side of such orders. The Exchange believes that it is equitable and not unfairly discriminatory to assess lower fees to Priority Customer QCC and cQCC Order than to Professional QCC and cQCC Orders because a Priority Customer is by definition not a broker or dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s).23 This limitation does not apply to Professionals, who will generally submit a higher number of orders than Priority Customers. Further, the Exchange believes that it is equitable and not unfairly discriminatory that Priority Customer and Public Customer origins be treated differently than Professional U.S.C. 78f(b). U.S.C. 78f(b)(4). 22 15 U.S.C. 78f(b)(5). 23 See supra note 8. origins, who are assessed higher fees for QCC and cQCC Orders. The exchanges, in general, have historically aimed to improve markets for investors and develop various features within their market structure for customer benefit. Priority Customer and Public Customer liquidity benefits all market participants by providing more trading opportunities. An increase in the activity of these market participants in turn facilitates tighter spreads, which may cause an additional corresponding increase in order flow from other market participants. The Exchange also believes its proposed fee and rebate structure is reasonable, equitably allocated and not unfairly discriminatory because competing exchanges provide similar rebate and fee structures and amounts for QCC and cQCC Orders on those exchanges.24 Further, the Exchange believes its proposal provides for the equitable allocation of reasonable dues and fees and is not unfairly discriminatory since the Exchange has different net transaction revenues based on different combinations of origins and contra-side orders. For example, when a Priority Customer is both the initiator and contra-side, no rebates are paid (for both QCC and cQCC transactions). This combination is in the MIAX Options Fee Schedule and in competitors’ fee schedules as well.25 The Exchange notes that Priority Customers are generally assessed a $0.00 transaction fee. Accordingly, the Exchange believes that it is reasonable, equitable, and not unfairly discriminatory to provide the proposed higher EEM rebates for QCC and cQCC Orders for Public Customer and Professional origins when they trade against an origin other than Priority Customer, in order to increase competition and potentially attract different combinations of additional QCC and cQCC Order flow to the Exchange. The Exchange also believes it is reasonable, equitable, and not unfairly discriminatory to continue to provide higher rebates for EEMs for QCC and cQCC Orders for Professionals when they trade against origins other than Priority Customers or Public Customers because Priority Customers and Public Customers are already incentivized by reduced fees for submitting QCC and cQCC Orders, as compared to Professionals that submit QCC and cQCC Orders. The Exchange also believes its proposal is consistent with Section 6(b)(5) of the Act 26 and is designed to 20 15 21 15 VerDate Sep<11>2014 17:28 Aug 21, 2024 24 See supra note 5 and 17. id. 26 15 U.S.C. 78f(b)(1) and (b)(5). 25 See Jkt 262001 PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 67985 prevent fraudulent and manipulative acts and practices, promotes just and equitable principles of trade, fosters cooperation and coordination with persons engaged in regulating, clearing, setting, processing information with respect to, and facilitating transaction in securities, removes impediments to and perfects the mechanism of a free and open market and a national market system, and, in general, protects investors and the public interest; and is not designed to permit unfair discrimination. This is because the Exchange believes the proposed changes will incentivize QCC and cQCC Order flow and an increase in such order flow will bring greater volume and liquidity, which benefits all market participants by providing more trading opportunities and tighter spreads. To the extent QCC and cQCC Order flow is increased by the proposal, market participants will increasingly compete for the opportunity to trade on the Exchange including sending more orders and providing narrower and larger-sized quotations in the effort to trade with such order flow. 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 changes do not impose an undue burden on intra-market competition because the Exchange does not believe that its proposal will place any category of market participant at a competitive disadvantage. The Exchange believes that the proposed changes will encourage market participants to send their QCC and cQCC Orders to the Exchange for execution in order to obtain greater rebates and lower their costs. The Exchange believes the proposed fees and rebates for QCC and cQCC Orders will not impose an undue burden on intra-market competition because the proposed changes will increase competition and potentially attract different combinations of additional QCC and cQCC order flow to the Exchange, which will grow the Exchange’s market share in this segment. The Exchange’s proposal to provide higher rebates for QCC and cQCC Orders for EEMs that trade against origins other than Priority Customer or Public Customer does not impose an undue burden on intra-market competition because Priority Customer E:\FR\FM\22AUN1.SGM 22AUN1 67986 Federal Register / Vol. 89, No. 163 / Thursday, August 22, 2024 / Notices and Public Customer QCC and cQCC Orders are already incentivized with reduced fees for such orders. The Exchange’s proposed fee and rebate structure is similar to that of competing exchanges that offer QCC and cQCC transaction fees and rebates.27 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. Inter-Market Competition The Exchange operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. There are currently 17 registered options exchanges competing for order flow. For the month of July 2024, based on publicly-available information, and excluding index-based options, no single exchange exceeded approximately 13–14% of the market share of executed volume of multiplylisted equity and exchange-traded fund (‘‘ETF’’) options.28 Therefore, no exchange possesses significant pricing power in the execution of multiplylisted equity and ETF options order flow. In such an environment, the Exchange must propose transaction fees and rebates to be competitive with other exchanges and to attract order flow. The Exchange believes that the Exchange’s proposal reflects this competitive environment as the proposal encourages market participants to provide QCC and cQCC liquidity and to send order flow to the Exchange. To the extent this is achieved, all the Exchange’s market participants should benefit from the improved market quality. 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: ddrumheller on DSK120RN23PROD with NOTICES1 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,29 and Rule 19b–4(f)(2) 30 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the 27 See supra note 15. the ‘‘Market Share’’ section of the Exchange’s website, available at https:// www.miaxglobal.com/. 29 15 U.S.C. 78s(b)(3)(A)(ii). 30 17 CFR 240.19b–4(f)(2). 28 See VerDate Sep<11>2014 17:28 Aug 21, 2024 Jkt 262001 IV. Solicitation of Comments Electronic Comments submitted on or before September 12, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.31 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2024–18794 Filed 8–21–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100752; File No. SR– SAPPHIRE–2024–20] • 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– SAPPHIRE–2024–11 on the subject line. Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule Paper Comments 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 August 8, 2024, MIAX Sapphire, LLC (‘‘MIAX Sapphire’’ 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. • 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–SAPPHIRE–2024–11. 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–SAPPHIRE–2024–11 and should be PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 August 16, 2024. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the MIAX Sapphire Options Exchange Fee Schedule 3 (the ‘‘Fee Schedule’’) to establish: (1) one-time membership application fees for new MIAX Sapphire Members 4; (2) monthly Trading Permit 5 31 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 The Exchange previously submitted a rule filing pursuant to Section 19(b)(3)(A) of the Exchange Act (15 U.S.C. 78s(b)(3)(A)) and Rule 19b–4(f)(2) (17 CFR 240.19b–4(f)(2)) thereunder to establish, among other things, the initial structure of the Fee Schedule, including a section for Definitions of terms used throughout the Fee Schedule, which the Exchange cites to in this filing for certain capitalized terms. See SR–SAPPHIRE–2024–13 (not yet noticed by the Commission at the time of this filing). 4 The term ‘‘Member’’ means an individual or organization that is registered with the Exchange pursuant to Chapter II of Exchange Rules for purposes of trading on the Exchange as an ‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’ Members are deemed ‘‘members’’ under the Exchange Act. See the Definitions Section of the Fee Schedule and Exchange Rule 100. 5 The term ‘‘Trading Permit’’ means a permit issued by the Exchange that confers the ability to transact on the Exchange. See Exchange Rule 100. 1 15 E:\FR\FM\22AUN1.SGM 22AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 89, Number 163 (Thursday, August 22, 2024)]
[Notices]
[Pages 67983-67986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-18794]



[[Page 67983]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100746; File No. SR-SAPPHIRE-2024-11]


Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt 
Fees for QCC Orders and cQCC Orders

August 16, 2024.
    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 August 6, 2024, MIAX Sapphire, LLC (``MIAX Sapphire'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Sapphire Fee 
Schedule (the ``Fee Schedule'') to adopt fees for Qualified Contingent 
Cross (``QCC'') Orders \3\ and complex Qualified Contingent Cross 
(``cQCC'') Orders.\4\ MIAX Sapphire will commence operations as a 
national securities exchange registered under Section 6 of the Act \5\ 
on August 12, 2024.\6\
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    \3\ A Qualified Contingent Cross Order is comprised of an 
originating order to buy or sell at least 1,000 contracts, or 10,000 
mini-option contracts, that is identified as being part of a 
qualified contingent trade, as that term is defined in 
Interpretation and Policy .01 of MIAX Sapphire Rule 516, coupled 
with a contra-side order or orders totaling an equal number of 
contracts. See Exchange Rule 516(j).
    \4\ A Complex Qualified Contingent Cross of ``cQCC'' Order is 
comprised of an originating complex order to buy or sell where each 
component is at least 1,000 contracts that is identified as being 
part of a qualified contingent trade, as defined in Rule 516, 
Interpretation and Policy .01, coupled with a contra-side complex 
order or orders totaling an equal number of contracts. See Exchange 
Rule 518(b)(4).
    \5\ 15 U.S.C. 78f.
    \6\ See Securities Exchange Act Release No. 100539 (July 15, 
2024), 89 FR 58848 (July 19, 2024) (File No. 10-240) (order 
approving application of MIAX Sapphire, LLC for registration as a 
national securities exchange).
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    While changes to the Fee Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated these changes to be 
operative on August 12, 2024.
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-options/miax-sapphire/rule-filings, at the Exchange'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 adopt Section 1)a)ii) of the Fee Schedule 
as ``QCC Fees'' to adopt certain fees and rebates applicable to QCC 
Orders. Additionally, the Exchange proposes to adopt Section 1)a)iii) 
of the Fee Schedule as ``cQCC Fees'' to adopt certain fees and rebates 
applicable to cQCC Orders. Finally, the Exchange proposes to adopt 
Section 1)a)i) to the Fee Schedule which the Exchange is proposing to 
reserve to be amended by a later proposal. The Exchange notes that 
these fees are identical to fees charged on the Exchange's affiliate, 
Miami International Securities Exchange, LLC (``MIAX Options'').\7\
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    \7\ See MIAX Options Exchange Fee Schedule, Section 1)a)vii) 
``QCC Fees'' and Section 1)a)viii) ``cQCC Fees'' available at 
https://www.miaxglobal.com/markets/us-options/miax-options/fees.
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Background
    A QCC Order is comprised of an originating order to buy or sell at 
least 1,000 contracts that is identified as being part of a qualified 
contingent trade, coupled with a contra-side order or orders totaling 
an equal number of contracts.\8\ A ``qualified contingent trade'' is a 
transaction consisting of two or more component orders, executed as 
agent or principal, where: (a) at least one component is an NMS Stock, 
as defined in Rule 600 of Regulation NMS under the Exchange Act; (b) 
all components are effected with a product or price contingency that 
either has been agreed to by all the respective counterparties or 
arranged for by a broker-dealer as principal or agent; (c) the 
execution of one component is contingent upon the execution of all 
other components at or near the same time; (d) the specific 
relationship between the component orders (e.g., the spread between the 
prices of the component orders) is determined by the time the 
contingent order is placed; (e) the component orders bear a derivative 
relationship to one another, represent different classes of shares of 
the same issuer, or involve the securities of participants in mergers 
or with intentions to merge that have been announced or cancelled; and 
(f) the transaction is fully hedged (without regard to any prior 
existing position) as a result of other components of the contingent 
trade.\9\
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    \8\ See Exchange Rule 516(j).
    \9\ See Interpretation and Policy .01 of Exchange Rule 516.
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Proposal To Adopt QCC Order Fees and Rebates
    The Exchange proposes to adopt Section 1)a)ii) of the Fee Schedule 
as ``QCC Fees'' to adopt certain fees and rebates applicable to QCC 
Orders. The Exchange proposes to assess initiator fees as follows: 
$0.00 per contract for the Priority Customer \10\ origin; $0.12 for 
Public Customer \11\ that is Not a Priority Customer; and $0.20 per 
contract for all other market participant origins (i.e., Sapphire 
Market Makers,\12\ non-Sapphire Market Makers, non-Member Broker-
Dealers, and Firm).\13\
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    \10\ The term ``Priority Customer'' means a person or entity 
that (i) is not a broker or dealer in securities, and (ii) does not 
place more than 390 orders in listed options per day on average 
during a calendar month for its own beneficial account(s). See 
Exchange Rule 100.
    \11\ The term ``Public Customer'' means a person that is not a 
broker or dealer in securities. See Exchange Rule 100.
    \12\ The term ``Market Makers'' means a Member registered with 
the Exchange for the purposes of making markets in options contracts 
traded on the Exchange and that is vested with the rights and 
responsibilities specified in Chapter VI of MIAX Sapphire Rules. See 
Exchange Rule 100.
    \13\ For the purposes of this filing, the origins comprising 
Sapphire Market Makers, non-Sapphire Market Makers, non-Member 
broker-dealers and firms will be referred to as ``Professional.''
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    The Exchange proposes to assess contra-side fees for all market 
participant origins, except the Priority Customer origin, as follows: 
$0.12 per contract side for the Public Customer that is not a Priority 
Customer origin; and $0.20 per contract side for Professional origins.
    The Exchange proposes to establish that rebates are paid to the 
Electronic

[[Page 67984]]

Exchange Member (``EEM'') \14\ that entered the QCC Order, depending 
upon the origin type and the origin type on the contra-side. 
Specifically, the Exchange proposes to provide the following rebates 
for an EEM when the contra-side is a Priority Customer: $0.00 per 
contract for the Priority Customer origin; $0.07 per contract for the 
Public Customer that is not a Priority Customer origin; and $0.17 per 
contract for Professional origins.
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    \14\ The term ``Electronic Exchange Member'' or ``EEM'' means 
the holder of a Trading Permit who is a Member representing as agent 
Public Customer Orders or Non-Customer Orders on the Exchange and 
those non-Market Maker Members conducting proprietary trading. 
Electronic Exchange Members are deemed ``members'' under the 
Exchange Act. See Exchange Rule 100.
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    The Exchange proposes to provide the following rebates for an EEM 
when the contra-side is a Public Customer that is not a Priority 
Customer: $0.07 per contract for the Priority Customer origin; $0.17 
per contract for the Public Customer that is not a Priority Customer 
origin; and $0.25 per contract for Professional origins.
    The Exchange proposes to provide the following rebates for an EEM 
when the contra-side is all other origins (i.e., neither a Priority 
Customer nor a Public Customer that is not a Priority Customer): $0.17 
per contract for the Priority Customer origin; $0.25 per contract for 
the Public Customer that is not a Priority Customer origin; and $0.30 
per contract for Professional origins.
    The Exchange also proposes to adopt a note below the table of fees 
and rebates for QCC Orders that will specify that per contract rebates 
will be paid to the EEM that enters the QCC Order into the MIAX 
Sapphire System.\15\ Additionally, the Exchange proposes to include a 
definition of a QCC order in the note which will provide that, a QCC 
transaction is comprised of an `initiating order' to buy (sell) at 
least 1,000 contracts that is identified as being part of a qualified 
contingent trade, coupled with a contra-side order to sell (buy) an 
equal number of contracts. The Exchange notes that with regard to order 
entry, the first order submitted into the System is marked as the 
initiating side and the second order is marked as the contra-side.
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    \15\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
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Proposal To Adopt cQCC Order Fees and Rebates
    The Exchange proposes to adopt section 1)a)iii) to the Fee Schedule 
as ``cQCC Fees'' to adopt fees and rebates applicable to cQCC Orders, 
which are assessed per contract per leg. A cQCC Order is comprised of 
an originating complex order \16\ to buy or sell where each component 
is at least 1,000 contracts that is identified as being part of a 
qualified contingent trade \17\ coupled with a contra-side complex 
order or orders totaling an equal number of contracts.\18\
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    \16\ In sum, a ``complex order'' is any order involving the 
concurrent purchase and/or sale of two or more different options in 
the same underlying security (the ``legs'' or ``components'' of the 
complex order), for the same account, in a conforming or non-
conforming ratio for the purposes of executing a particular 
investment strategy. See Exchange Rule 518(a). A complex order can 
also be a ``stock-option order'' with a conforming or non-conforming 
ratio as defined in Exchange Rule 518(a).
    \17\ See supra note 4.
    \18\ Trading of cQCC Orders is governed by Exchange Rule 
515(g)(4).
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    The Exchange proposes to adopt initiator fees for all market 
participants, except the Priority Customer origin, as follows: $0.12 
per contract side for the Public Customer that is not a Priority 
Customer origin; and $0.20 per contract side for Professional origins. 
The Exchange does not propose to charge an initiator fee for the 
Priority Customer origin.
    The Exchange proposes to assess contra-side fees for all market 
participants, except the Priority Customer origin, as follows: $0.12 
per contract side for the Public Customer that is not a Priority 
Customer origin; and $0.20 per contract side for Professional origins.
    The Exchange proposes to provide the following rebates for an EEM 
when the contra-side is a Priority Customer: $0.00 per contract for the 
Priority Customer origin; $0.07 per contract for the Public Customer 
that is not a Priority Customer origin; and $0.17 per contract for 
Professional origins. The Exchange also proposes to provide the 
following rebates for an EEM when the contra-side is a Public Customer 
that is not Priority Customer: $0.07 per contract for the Priority 
Customer origin; $0.17 per contract for the Public Customer that is not 
a Priority Customer origin; and $0.25 per contract for Professional 
origins. Finally, the Exchange proposes to provide the following 
rebates for an EEM when the contra-side is all other origins (i.e., 
neither a Priority Customer nor a Public Customer that is not a 
Priority Customer): $0.17 per contract for the Priority Customer 
origin; $0.25 per contract for the Public Customer that is not a 
Priority Customer origin; and $0.30 per contract for Professional 
origins.
    The Exchange also proposes to adopt a note below the table of fees 
and rebates for cQCC Orders. The Exchange proposes to specify that per 
contract rebates will be paid to the EEM that enters the cQCC Order 
into the MIAX Sapphire System. Additionally, the note will provide 
that, all fees and rebates are per contract leg. Finally, the note will 
provide the definition of a cQCC transaction as one that is comprised 
of an `initiating complex order' to buy (sell) where each component is 
at least 1,000 contracts that is identified as being part of a 
qualified contingent trade, coupled with a contra-side complex order or 
orders to sell (buy) an equal number of contracts. The Exchange also 
proposes to add the following reference sentence at the end of the 
notes section following the table of fees and rebates for cQCC Orders: 
``The stock handling fee for the stock leg of cQCC transactions is 
described in Section 1)a)v) of the Fee Schedule.'' This will provide 
clarity to the Exchange's Fee Schedule and help signal to market 
participants that the stock handling fees for the stock leg of cQCC 
transactions is located in a separate section of the Fee Schedule. 
Finally, the Exchange also notes that competing exchanges provide 
similar rebate and fee structures and amounts for QCC and cQCC 
Orders.\19\
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    \19\ See e.g., BOX Exchange LLC (``BOX'') Fee Schedule (dated 
January 2, 2024), Section IV.D., Qualified Contingent Cross 
(``QCC'') Transactions, available at https://boxoptions.com/resources/fee-schedule/. BOX does not assess any fee for QCC orders 
from public customers and professional customers and assesses 
broker-dealers and market makers a $0.20 fee per contract for their 
agency (originating) and contra-side QCC orders. BOX provides tiered 
rebates depending on the parties to each QCC transaction. For 
example, when only one side of a QCC transaction is a broker-dealer 
or market maker, BOX provides rebates ranging from $0.14 per 
contract to $0.17 per contract. When both parties to a QCC 
transaction are a broker-dealer or market maker (i.e., 
professionals), BOX provides higher rebates ranging from $0.22 per 
contract to $0.27 per contract, similar to the Exchange's proposed 
rebate structure. See also NYSE American LLC (``NYSE American'') 
Options Exchange Fee Schedule (effective as of July 1, 2024), 
Section I.F., Qualified Contingent Cross (``QCC'') Fees & Credits, 
available online at https://www.nyse.com/publicdocs/nyse/markets/american-options/NYSE_American_Options_Fee_Schedule.pdf. NYSE 
American does not assess any fee for QCC orders from customers or 
professional customers and assesses market makers, firms and broker-
dealers a $0.20 fee per contract side for their QCC orders. NYSE 
American provides rebates depending on the parties to each QCC 
transaction. For example, when a Floor Broker executes a customer or 
professional customer QCC order when the contra-side is a market 
maker, firm or broker-dealer, NYSE American provides a lower rebate 
of $0.12 per contract. When a Floor Broker executes a market maker, 
firm or broker-dealer QCC order when the contra-side is another 
market maker, firm or broker-dealer, NYSE American provides a higher 
rebate of $0.18 per contract. See also MIAX Options Exchange Fee 
Schedule, Section (1)(a)(vii) and (viii) available online at https://www.miaxglobal.com/markets/us-options/miax-options/fees.

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[[Page 67985]]

Implementation
    The proposed fee changes are immediately effective.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \20\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \21\ in 
particular, in that it is an equitable allocation of reasonable dues, 
fees, and other charges among its members and issuers and other persons 
using its facilities. The Exchange also believes the proposal furthers 
the objectives of Section 6(b)(5) of the Act \22\ 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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    \20\ 15 U.S.C. 78f(b).
    \21\ 15 U.S.C. 78f(b)(4).
    \22\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes the proposed fees and rebates for QCC and 
cQCC Orders is reasonable because the Exchange believes the proposal 
will increase competition and potentially attract additional QCC and 
cQCC Order flow from various origins to the Exchange, which will grow 
the Exchange's market share in this segment. The Exchange also believes 
it is reasonable and not unfairly discriminatory to provide higher 
rebates for QCC and cQCC Orders for EEMs that trade against origins 
other than Priority Customer or Public Customer because Priority 
Customer and Public Customer QCC and cQCC Orders are already 
incentivized with reduced fees for the initiator and contra-side of 
such orders. The Exchange believes that it is equitable and not 
unfairly discriminatory to assess lower fees to Priority Customer QCC 
and cQCC Order than to Professional QCC and cQCC Orders because a 
Priority Customer is by definition not a broker or dealer in 
securities, and does not place more than 390 orders in listed options 
per day on average during a calendar month for its own beneficial 
account(s).\23\ This limitation does not apply to Professionals, who 
will generally submit a higher number of orders than Priority 
Customers. Further, the Exchange believes that it is equitable and not 
unfairly discriminatory that Priority Customer and Public Customer 
origins be treated differently than Professional origins, who are 
assessed higher fees for QCC and cQCC Orders. The exchanges, in 
general, have historically aimed to improve markets for investors and 
develop various features within their market structure for customer 
benefit. Priority Customer and Public Customer liquidity benefits all 
market participants by providing more trading opportunities. An 
increase in the activity of these market participants in turn 
facilitates tighter spreads, which may cause an additional 
corresponding increase in order flow from other market participants. 
The Exchange also believes its proposed fee and rebate structure is 
reasonable, equitably allocated and not unfairly discriminatory because 
competing exchanges provide similar rebate and fee structures and 
amounts for QCC and cQCC Orders on those exchanges.\24\
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    \23\ See supra note 8.
    \24\ See supra note 5 and 17.
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    Further, the Exchange believes its proposal provides for the 
equitable allocation of reasonable dues and fees and is not unfairly 
discriminatory since the Exchange has different net transaction 
revenues based on different combinations of origins and contra-side 
orders. For example, when a Priority Customer is both the initiator and 
contra-side, no rebates are paid (for both QCC and cQCC transactions). 
This combination is in the MIAX Options Fee Schedule and in 
competitors' fee schedules as well.\25\ The Exchange notes that 
Priority Customers are generally assessed a $0.00 transaction fee. 
Accordingly, the Exchange believes that it is reasonable, equitable, 
and not unfairly discriminatory to provide the proposed higher EEM 
rebates for QCC and cQCC Orders for Public Customer and Professional 
origins when they trade against an origin other than Priority Customer, 
in order to increase competition and potentially attract different 
combinations of additional QCC and cQCC Order flow to the Exchange. The 
Exchange also believes it is reasonable, equitable, and not unfairly 
discriminatory to continue to provide higher rebates for EEMs for QCC 
and cQCC Orders for Professionals when they trade against origins other 
than Priority Customers or Public Customers because Priority Customers 
and Public Customers are already incentivized by reduced fees for 
submitting QCC and cQCC Orders, as compared to Professionals that 
submit QCC and cQCC Orders.
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    \25\ See id.
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    The Exchange also believes its proposal is consistent with Section 
6(b)(5) of the Act \26\ and is designed to prevent fraudulent and 
manipulative acts and practices, promotes just and equitable principles 
of trade, fosters cooperation and coordination with persons engaged in 
regulating, clearing, setting, processing information with respect to, 
and facilitating transaction in securities, removes impediments to and 
perfects the mechanism of a free and open market and a national market 
system, and, in general, protects investors and the public interest; 
and is not designed to permit unfair discrimination. This is because 
the Exchange believes the proposed changes will incentivize QCC and 
cQCC Order flow and an increase in such order flow will bring greater 
volume and liquidity, which benefits all market participants by 
providing more trading opportunities and tighter spreads. To the extent 
QCC and cQCC Order flow is increased by the proposal, market 
participants will increasingly compete for the opportunity to trade on 
the Exchange including sending more orders and providing narrower and 
larger-sized quotations in the effort to trade with such order flow.
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    \26\ 15 U.S.C. 78f(b)(1) and (b)(5).
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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 burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
Intra-Market Competition
    The Exchange believes that the proposed changes do not impose an 
undue burden on intra-market competition because the Exchange does not 
believe that its proposal will place any category of market participant 
at a competitive disadvantage. The Exchange believes that the proposed 
changes will encourage market participants to send their QCC and cQCC 
Orders to the Exchange for execution in order to obtain greater rebates 
and lower their costs. The Exchange believes the proposed fees and 
rebates for QCC and cQCC Orders will not impose an undue burden on 
intra-market competition because the proposed changes will increase 
competition and potentially attract different combinations of 
additional QCC and cQCC order flow to the Exchange, which will grow the 
Exchange's market share in this segment. The Exchange's proposal to 
provide higher rebates for QCC and cQCC Orders for EEMs that trade 
against origins other than Priority Customer or Public Customer does 
not impose an undue burden on intra-market competition because Priority 
Customer

[[Page 67986]]

and Public Customer QCC and cQCC Orders are already incentivized with 
reduced fees for such orders. The Exchange's proposed fee and rebate 
structure is similar to that of competing exchanges that offer QCC and 
cQCC transaction fees and rebates.\27\
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    \27\ See supra note 15.
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Inter-Market Competition
    The Exchange operates in a highly competitive market in which 
market participants can readily favor competing venues if they deem fee 
levels at a particular venue to be excessive. There are currently 17 
registered options exchanges competing for order flow. For the month of 
July 2024, based on publicly-available information, and excluding 
index-based options, no single exchange exceeded approximately 13-14% 
of the market share of executed volume of multiply-listed equity and 
exchange-traded fund (``ETF'') options.\28\ Therefore, no exchange 
possesses significant pricing power in the execution of multiply-listed 
equity and ETF options order flow. In such an environment, the Exchange 
must propose transaction fees and rebates to be competitive with other 
exchanges and to attract order flow. The Exchange believes that the 
Exchange's proposal reflects this competitive environment as the 
proposal encourages market participants to provide QCC and cQCC 
liquidity and to send order flow to the Exchange. To the extent this is 
achieved, all the Exchange's market participants should benefit from 
the improved market quality.
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    \28\ See the ``Market Share'' section of the Exchange's website, 
available at https://www.miaxglobal.com/.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act,\29\ and Rule 19b-4(f)(2) \30\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
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    \29\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \30\ 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-SAPPHIRE-2024-11 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-SAPPHIRE-2024-11. 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-SAPPHIRE-2024-11 and should 
be submitted on or before September 12, 2024.
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    \31\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-18794 Filed 8-21-24; 8:45 am]
BILLING CODE 8011-01-P

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