Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule and Extend the SPIKES Options Market Maker Incentive Program, 83529-83535 [2024-23802]
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Federal Register / Vol. 89, No. 200 / Wednesday, October 16, 2024 / Notices
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange notes that the proposed
amendments would simply require
listed companies to pay fees to the
Exchange that were already due and
payable under applicable Exchange
rules and the issuer’s listing agreement.
Specifically, the Exchange believes it is
fair to require listed companies to pay
all outstanding listing and annual fees
before the Exchange approves a Plan or
required periodic review of a Plan, as
listed companies are already required by
Exchange rules (as set forth in Section
902.00 et seq.) and their listing
agreements to pay these fees when due
and the Exchange has the authority
under Section 802.01D to delist
companies for violations of their
agreements with the Exchange,
including their listing agreements. In
addition, the Exchange notes that the
Plan acceptance and periodic review
process requires significant incremental
work on the part of Exchange staff.
As the proposal would not result in
any change in the cost of a listing on the
Exchange, the Exchange does not
believe that it imposes any additional
burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) by order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
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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:
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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–
NYSE–2024–44 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–NYSE–2024–44. 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–NYSE–2024–44 and should be
submitted on or before November 6,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–23803 Filed 10–15–24; 8:45 am]
BILLING CODE 8011–01–P
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CFR 200.30–3(a)(12).
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83529
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101289; File No. SR–MIAX–
2024–39]
Self-Regulatory Organizations; Miami
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Its Fee Schedule
and Extend the SPIKES Options Market
Maker Incentive Program
October 9, 2024.
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 September 27, 2024, 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.
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 Fee Schedule (‘‘Fee
Schedule’’) to (i) amend and extend the
SPIKES options Market Maker Incentive
Program (the ‘‘Incentive Program’’) until
January 31, 2025; and (ii) remove
waivers for certain non-transaction fees
applicable to Market Makers 3 that trade
solely in Proprietary Products.4
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxglobal.com/markets/
us-options/all-options-exchanges/rulefilings, 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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The term ‘‘Market Makers’’ refers to ‘‘Lead
Market Makers’’, ‘‘Primary Lead Market Makers’’
and ‘‘Registered Market Makers’’ collectively. See
Exchange Rule 100.
4 The term ‘‘Proprietary Product’’ means a class
of options that is listed exclusively on the
Exchange. See Exchange Rule 100.
2 17
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Federal Register / Vol. 89, No. 200 / Wednesday, October 16, 2024 / Notices
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 (i) amend and extend
the SPIKES options Market Maker
Incentive Program (the ‘‘Incentive
Program’’) until January 31, 2025; and
(ii) remove waivers for certain nontransaction fees applicable to Market
Makers that trade solely in Proprietary
Products.
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Background
On October 12, 2018, the Exchange
received approval from the U.S.
Securities and Exchange Commission
(‘‘Commission’’) to list and trade on the
Exchange options on the SPIKES®
Index, a new index that measures
expected 30-day volatility of the SPDR
S&P 500 ETF Trust (commonly known
and referred to by its ticker symbol,
‘‘SPY’’).5 The Exchange adopted its
initial SPIKES options transaction fees
on February 15, 2019 and adopted a
new section of the Fee Schedule for
those fees.6 Options on the SPIKES
Index began trading on the Exchange on
February 19, 2019.
On May 31, 2019, the Exchange filed
its first proposal in a series of proposals
with the Commission to amend the Fee
Schedule to waive certain nontransaction fees applicable to Market
Makers that trade solely in Proprietary
Products (including options on the
SPIKES Index) beginning June 1, 2019,
through September 30, 2024.7 In
5 See Securities Exchange Act Release No. 84417
(October 12, 2018), 83 FR 52865 (October 18, 2018)
(SR–MIAX–2018–14) (Order Granting Approval of a
Proposed Rule Change by Miami International
Securities Exchange, LLC to List and Trade on the
Exchange Options on the SPIKES® Index).
6 See Securities Exchange Release No. 85283
(March 11, 2019), 84 FR 9567 (March 15, 2019) (SR–
MIAX–2019–11). The Exchange initially filed the
proposal on February 15, 2019 (SR–MIAX–2019–
04). That filing was withdrawn and replaced with
SR–MIAX–2019–11. On September 30, 2020, the
Exchange filed its proposal to, among other things,
reorganize the Fee Schedule to adopt new Section
(1)(b), Proprietary Products Exchange Fees, and
moved the fees and rebates for SPIKES options into
new Section (1)(b)(i). See Securities Exchange Act
Release Nos. 90146 (October 9, 2020), 85 FR 65443
(October 15, 2020) (SR–MIAX–2020–32); 90814
(December 29, 2020), 86 FR 327 (January 5, 2021)
(SR–MIAX–2020–39).
7 See Securities Exchange Act Release Nos. 86109
(June 14, 2019), 84 FR 28860 (June 20, 2019) (SR–
MIAX–2019–28); 87282 (October 10, 2019), 84 FR
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particular, the Exchange adopted fee
waivers for Membership Application
fees, monthly Market Maker Trading
Permit fees, Application Programming
Interface (‘‘API’’) Testing and
Certification fees for Members,8 and
monthly MIAX Express Interface
(‘‘MEI’’) Port 9 fees assessed to Market
Makers that trade solely in Proprietary
Products (including options on SPIKES)
throughout the entire period of June 1,
2019 through September 30, 2024.
On September 30, 2021, the Exchange
filed its initial proposal (SR–MIAX–
2021–45) to implement the Incentive
Program for SPIKES options to
incentivize Market Makers to improve
liquidity, available volume, and the
quote spread width of SPIKES options
beginning October 1, 2021, and ending
December 31, 2021.10 Technical details
regarding the Incentive Program were
published in a Regulatory Circular on
September 30, 2021.11 On October 12,
2021, the Exchange withdrew SR–
MIAX–2021–45 and refiled its proposal
to implement the Incentive Program to
provide additional details.12 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
55658 (October 17, 2019) (SR–MIAX–2019–43);
87897 (January 6, 2020), 85 FR 1346 (January 10,
2020) (SR–MIAX–2019–53); 89289 (July 10, 2020),
85 FR 43279 (July 16, 2020) (SR–MIAX–2020–22);
90146 (October 9, 2020), 85 FR 65443 (October 15,
2020) (SR–MIAX–2020–32); 90814 (December 29,
2020), 86 FR 327 (January 5, 2021) (SR–MIAX–
2020–39); 91498 (April 7, 2021), 86 FR 19293 (April
13, 2021) (SR–MIAX–2021–06); 93881 (December
30, 2021), 87 FR 517 (January 5, 2022) (SR–MIAX–
2021–63); 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); 97887 (July
12, 2023), 88 FR 45936 (July 18, 2023) (SR–MIAX–
2023–28); 99047 (November 30, 2023), 88 FR 84861
(December 6, 2023) (SR–MIAX–2023–46); and
100468 (July 9, 2024), 89 FR 57445 (July 15, 2024)
(SR–MIAX–2024–26).
8 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
9 Full Service MEI Ports provide Market Makers
with the ability to send Market Maker simple and
complex quotes, eQuotes, and quote purge messages
to the MIAX System. Full Service MEI Ports are also
capable of receiving administrative information.
Market Makers are limited to two Full Service MEI
Ports per matching engine. See Fee Schedule,
Section 5)d)ii), footnote 28.
10 See SR–MIAX–2021–45.
11 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.
12 See Securities Exchange Act Release No. 93424
(October 26, 2021), 86 FR 60322 (November 1, 2021)
(SR–MIAX–2021–49).
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19b–4 Filing to amend the fees (or
extend the Incentive Program).13
Between December 23, 2021, and June
28, 2024, the Exchange filed several
proposals to extend the Incentive
Program, with the last extension period
ending September 30, 2024.14 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).15
Proposal To Amend and Extend the
Incentive Program
The Exchange now proposes to amend
and extend the Incentive Program for
SPIKES options to continue to
incentivize Market Makers to improve
liquidity and available volume in
SPIKES options by amending the quotes
spread width requirements and the
amounts of the incentive compensation
pools.
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.16 The Exchange has
devised a methodology where each
qualifying Market Maker’s ITM/OTM
market width for eligible Incentive
Program options is calculated. Eligible
ITM options require a maximum quote
spread width of 150 basis points (‘‘bps’’)
and each eligible OTM option requires
a maximum quote spread width of 100
bps.17 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
13 See
id.
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);
97883 (July 12, 2023), 88 FR 45941 (July 18, 2023)
(SR–MIAX–2023–26); 99040 (November 29, 2023),
88 FR 84374 (December 5, 2023) (SR–MIAX–2023–
47); 99902 (April 3, 2024), 89 FR 24883 (April 9,
2024) (SR–MIAX–2024–17); and 100468 (July 9,
2024), 89 FR 57445 (July 15, 2024) (SR–MIAX–
2024–26).
15 See id.
16 See supra note 11.
17 Calculation of bps is described in Regulatory
Circular 2021–56. See supra note 11.
14 See
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satisfy and/or exceed the criteria
pursuant to the Incentive Program.
The Exchange now proposes to
double the maximum quote spread
width parameters for both ITM options
and OTM options. Specifically, the
Exchange proposes to increase the
maximum quote spread width from 150
bps to 300 bps for a Market Maker
quoting ITM options to be eligible to
participate in the Incentive Program.
The Exchange also proposes to increase
the maximum quote spread width from
100 bps to 200 bps for a Market Maker
quoting OTM options to be eligible to
participate in the Incentive Program.
The Exchange will communicate the
new requirements of the Incentive
Program to Members via Regulatory
Circular.18
Currently, the first pool (Incentive 1)
is capped at $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.19 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.20
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
contracts.21 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 Exchange now proposes to amend
the terms of Incentive 1. Specifically,
the Exchange proposes to reduce the
18 See MIAX Options Exchange Regulatory
Circular 2024–54, Updated SPIKES Options Market
Maker Incentive Program (September 26, 2024),
available at https://www.miaxglobal.com/markets/
us-options/miax-options/regulatory-circulars.
19 See supra note 11.
20 See id.
21 In the event there is only one monthly
expiration listed, the requirements are only
applicable to that single month.
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total compensation pool of Incentive 1
from $40,000 per month to $10,000 per
month. The Exchange also proposes to
reduce the maximum amount available
to each individual Market Maker for
satisfying the minimum requirements of
the Incentive Program from $10,000 per
month to $5,000 per month. The
Exchange proposes that, in the event
that more than two Market Makers meet
the requirements of Incentive 1, each
qualifying Market Maker is entitled to
receive a pro-rated share of the $10,000
monthly compensation pool dependent
upon the number of qualifying Market
Makers in that particular month.
Currently, the second pool (Incentive
2) is capped at a total amount of
$100,000 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 with the
total compensation pool amount based
on qualifying Market Makers’
improvement value over the minimum
requirement score. 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,22 are
eligible to receive a pro-rated share of
the compensation pool 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 now proposes to amend
the terms of Incentive 2. Specifically,
the Exchange proposes to reduce the
total compensation pool of Incentive 2
from a maximum of $100,000 per month
to a maximum of $25,000 per month.
The Exchange also proposes to reduce
the maximum amount available to each
individual Market Maker for satisfying
the requirements of Incentive 2 from
$25,000 per month to $12,500 per
month.
The purpose of the proposed changes
is for business reasons. The Exchange
proposes to lower the quoting
requirements because the Exchange is
no longer listing new expiration months
22 See
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83531
in SPIKES options. The Exchange
anticipates that there will be no
expiration months available for trading
following the expiration of the January
2025 SPIKES options. The Exchange
believes that it is appropriate to lower
the threshold of the quoting standards
for the Incentive Program to further
encourage more SPIKES Market Makers
to participate in the Incentive Program.
The Exchange also proposes to reduce
the compensation pools and the
maximum amount available to each
individual Market Maker for satisfying
and/or exceeding the minimum
requirements of the Incentive Program
because the Exchange proposes to lower
the quoting requirements for the
Incentive Program.
In addition, the Exchange proposes to
extend the Incentive Program until
January 31, 2025. The purpose of this
extension is to continue to incentivize
Market Makers to provide quotes in
SPIKES options and to improve
liquidity and available volume.
The Exchange will announce the
amendment and extension of the
Incentive Program to all Members via a
Regulatory Circular.23
Proposal To Remove the Fee Waivers for
Market Markets That Trade Solely in
Proprietary Products (Including SPIKES
Options)
Currently, the Exchange offers fee
waivers for (i) Membership Application
fees, (ii) monthly Market Maker Trading
Permit fees, (iii) Member API Testing
and Certification fees, and (iv) monthly
MEI Port fees, to Market Makers that
trade solely in Proprietary Products
(including options on SPIKES). The fee
waivers for the aforementioned fees will
end on September 30, 2024. The
Exchange now proposes to remove the
aforementioned fee waivers from the
Fee Schedule once they expire on
September 30, 2024.
Membership Application Fees
The Exchange currently assesses a
one-time Membership Application fee
for applications of potential Members.
The Exchange assesses a one-time
Membership Application fee on the
earlier of (i) the date the applicant is
certified in the membership system, or
(ii) once an application for MIAX
membership is finally denied. The onetime application fee is based upon the
23 See supra note 18. 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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Federal Register / Vol. 89, No. 200 / Wednesday, October 16, 2024 / Notices
applicant’s status as either a Market
Maker or an Electronic Exchange
Member (‘‘EEM’’).24 A Market Maker is
assessed a one-time Membership
Application fee of $3,000. However, the
Exchange currently offers a waiver of
the Membership Application fee for
Market Makers that will trade solely in
Proprietary Products. This waiver is set
to expire on September 30, 2024.
The Exchange now proposes to
remove the waiver for the one-time
Membership Application fee of $3,000
for Market Makers that trade solely in
Proprietary Products (including options
on SPIKES) once it expires on
September 30, 2024. The Exchange
notes that the only Proprietary Product
offered by the Exchange is SPIKES
options. The Exchange initially waived
the Membership Application fee for
Type of trading permit
Market Maker (includes RMM,
LMM, PLMM).
Market Makers that trade solely in
Proprietary Products in order to attract
new market participants to trade
SPIKES options. Since the Exchange is
no longer listing new expiration months
in SPIKES options, and the Exchange
anticipates that there will be no
expiration months available for trading
following the expiration of the January
2025 SPIKES options, the Exchange will
no longer waive the Membership
Application fee to attract market
participants to trade SPIKES options.
Trading Permit Fees
The Exchange issues Trading Permits
that confer the ability to transact on the
Exchange. MIAX Trading Permits are
issued to Market Makers and EEMs.
Members receiving Trading Permits
during a particular calendar month are
assessed monthly Trading Permit fees as
set forth in the Fee Schedule. As it
relates to Market Makers, the Exchange
currently assesses a monthly Trading
Permit fee in any month the Market
Maker is certified in the membership
system, is credentialed to use one or
more MIAX MEI Ports in the production
environment and is assigned to quote in
one or more classes. The Exchange
assesses the monthly Market Maker
Trading Permit fee for its Market Makers
based on the greatest number of classes
listed on the Exchange that the Market
Maker was assigned to quote in on any
given day within a calendar month and
the applicable fee rate is the lesser of
either the per class basis or percentage
of total national average daily volume
measurements. A Market Maker is
assessed a monthly Trading Permit fee
according to the following table: 25
Market Maker assignments
(the lesser of the applicable measurements below) Ω
Monthly MIAX
trading permit
fee
Per class
% of national average daily volume
$7,000.00
Up to 10 Classes ....................
Up to 20% of Classes by volume.
12,000.00
* 17,000.00
* 22,000.00
Up to 40 Classes ....................
Up to 100 Classes ..................
Over 100 Classes ...................
Up to 35% of Classes by volume.
Up to 50% of Classes by volume.
Over 50% of Classes by volume up to all Classes listed on
MIAX.
Ω Excludes
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Proprietary Products.
* For these Monthly MIAX Trading Permit Fee levels, if the Market Maker’s total monthly executed volume during the relevant month is less
than 0.060% of the total monthly executed volume reported by OCC in the market maker account type for MIAX-listed option classes for that
month, then the fee will be $15,500 instead of the fee otherwise applicable to such level.
However, the Exchange currently
offers a waiver of the Trading Permit fee
for Market Makers that will trade solely
in Proprietary Products. This waiver is
set to expire on September 30, 2024.
The Exchange now proposes to
remove the waiver for the monthly
Trading Permit fee for Market Makers
that trade solely in Proprietary Products
(including options on SPIKES) once it
expires on September 30, 2024. The
Exchange notes that the only Proprietary
Products offered by the Exchange is
SPIKES options. The Exchange initially
waived the monthly Trading Permit fee
for Market Makers that trade solely in
Proprietary Products in order to attract
new market participants to trade
SPIKES options. Since the Exchange is
no longer listing new expiration months
in SPIKES options, and the Exchange
anticipates that there will be no
expiration months available for trading
following the expiration of the January
2025 SPIKES options, the Exchange will
no longer waive the monthly Trading
Permit fee to attract market participants
to trade SPIKES options. The Exchange
also notes that there are no Market
Makers trading solely in SPIKES
options, thus the Exchange believes that
removing the waiver for the monthly
Trading Permit fee for Market Makers
that trade solely in Proprietary Products
(including options on SPIKES) would
have no impact on Members or the
public.
API Testing and Certification Fees
The Exchange assesses an API Testing
and Certification fee to all Members
depending upon Membership type. An
API makes it possible for Members’
software to communicate with MIAX
software applications, and is subject to
Members testing with, and certification
by, MIAX. The Exchange offers four
types of interfaces: (i) the Financial
Information Exchange Port (‘‘FIX
Port’’),26 which enables the FIX Port
user (typically an EEM or a Market
Maker) to submit simple and complex
orders electronically to MIAX; (ii) the
MEI Port, which enables Market Makers
to submit simple and complex
electronic quotes to MIAX; (iii) the
Clearing Trade Drop Port (‘‘CTD
Port’’),27 which provides real-time trade
clearing information to the participants
to a trade on MIAX and to the
participants’ respective clearing firms;
24 The term ‘‘Electronic Exchange Member’’ or
‘‘EEM’’ means the holder of a Trading Permit who
is not a Market Maker. Electronic Exchange
Members are deemed ‘‘members’’ under the
Exchange Act. See Exchange Rule 100.
25 See Fee Schedule, Section (3)(b).
26 A FIX Port is an interface with MIAX systems
that enables the Port user (typically an Electronic
Exchange Member or a Market Maker) to submit
simple and complex orders electronically to MIAX.
See Fee Schedule, Section 5)d)i).
27 Clearing Trade Drop (‘‘CTD’’) provides
Exchange members with real-time clearing trade
updates. The updates include the Member’s
clearing trade messages on a low latency, real-time
basis. The trade messages are routed to a Member’s
connection containing certain information. The
information includes, among other things, the
following: (i) trade date and time; (ii) symbol
information; (iii) trade price/size information; (iv)
Member type (for example, and without limitation,
Market Maker, Electronic Exchange Member,
Broker-Dealer); (v) Exchange Member Participant
Identifier (‘‘MPID’’) for each side of the transaction,
including Clearing Member MPID; and (vi) strategy
specific information for complex transactions. CTD
Port Fees will be assessed in any month the
Member is credentialed to use the CTD Port in the
production environment. See Fee Schedule, Section
5)d)iii.
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Federal Register / Vol. 89, No. 200 / Wednesday, October 16, 2024 / Notices
and (iv) the FIX Drop Copy Port (‘‘FXD
Port’’),28 which provides a copy of realtime trade execution, correction and
cancellation information through a FIX
Port to any number of FIX Ports
designated by an EEM to receive such
messages.
API Testing and Certification fees for
Market Makers are assessed (i) initially
per API for CTD and MEI ports in the
month the Market Maker has been
credentialed to use one or more ports in
the production environment for the
tested API and the Market Maker has
been assigned to quote in one or more
classes, and (ii) each time a Market
Maker initiates a change to its system
that requires testing and certification.
API Testing and Certification fees will
not be assessed in situations where the
Exchange initiates a mandatory change
to the Exchange’s system that requires
testing and certification. The Exchange
currently assesses a Market Maker an
API Testing and Certification fee of
$2,500. The API Testing and
Certification fees represent costs
incurred by the Exchange as it works
with each Member for testing and
certifying that the Member’s software
systems communicate properly with the
Exchange’s interfaces. However, the
Exchange currently offers a waiver of
the API Testing and Certification Fee for
Market Makers that will trade solely in
Proprietary Products. This waiver is set
to expire on September 30, 2024.
The Exchange now proposes to
remove the waiver of the API Testing
and Certification fee for Market Makers
that trade solely in Proprietary Products
(including options on SPIKES) from the
Fee Schedule once it expires on
September 30, 2024. The Exchange
notes that the only Proprietary Products
offered by the Exchange is SPIKES
options. The Exchange initially waived
the API Testing and Certification fee for
Market Makers that trade solely in
Proprietary Products in order to attract
new market participants to trade
SPIKES options. Since the Exchange is
no longer listing new expiration months
in SPIKES options, and the Exchange
anticipates that there will be no
expiration months available for trading
following the expiration of the January
2025 SPIKES options, the Exchange will
no longer waive the API Testing and
Certification fee to attract market
participants to trade SPIKES options.
The Exchange also notes that there is no
Market Makers trading solely in SPIKES
options, thus the Exchange believes that
removing the waiver for the API Testing
and Certification fee for Market Makers
that trade solely in Proprietary Products
(including options on SPIKES) would
have no impact on Members or the
public.
MEI Port Fees
The Exchange assesses monthly MEI
Port fees to Market Makers in each
month the Member has been
83533
credentialed to use the MEI Port in the
production environment and has been
assigned to quote in at least one class.
The amount of the monthly MEI Port fee
is based upon the number of classes in
which the Market Maker was assigned
to quote on any given day within the
calendar month, and upon the class
volume percentages set forth in the Fee
Schedule. The class volume percentage
is based on the total national average
daily volume in classes listed on the
Exchange in the prior calendar quarter.
Newly listed option classes are
excluded from the calculation of the
monthly MEI Port fee until the calendar
quarter following their listing, at which
time the newly listed option classes will
be included in both the per class count
and the percentage of total national
average daily volume. The Exchange
assesses Market Makers the monthly
MEI Port fee based on the greatest
number of classes listed on the
Exchange that the Market Maker was
assigned to quote in on any given day
within a calendar month and the
applicable fee rate that is the lesser of
either the per class basis or percentage
of total national average daily volume
measurement. The Exchange assesses
MEI Port fees on Market Makers
according to the following table: 29
However, the Exchange currently offers
a waiver of the MEI Port Fee for Market
Makers that trade solely in Proprietary
Products. This waiver is set to expire on
September 30, 2024.
Market maker assignments
(the lesser of the applicable measurements below) Ω
Monthly MIAX MEI fees
Per class
$5,000.00 ........................................
10,000.00 ........................................
14,000.00 ........................................
17,500.00 * ......................................
20,500.00 * ......................................
% of national average daily volume
Up to 5 Classes .............................
Up to 10 Classes ...........................
Up to 40 Classes ...........................
Up to 100 Classes .........................
Over 100 Classes ..........................
Up to 10% of Classes by volume.
Up to 20% of Classes by volume.
Up to 35% of Classes by volume.
Up to 50% of Classes by volume.
Over 50% of Classes by volume up to all Classes listed on MIAX.
Ω Excludes
lotter on DSK11XQN23PROD with NOTICES1
Proprietary Products.
* For these Monthly MIAX MEI Fees levels, if the Market Maker’s total monthly executed volume during the relevant month is less than 0.060%
of the total monthly executed volume reported by OCC in the market maker account type for MIAX-listed option classes for that month, then the
fee will be $14,500 instead of the fee otherwise applicable to such level.
The Exchange now proposes to
remove the waiver of the monthly MEI
Port fee for Market Makers that trade
solely in Proprietary Products
(including options on SPIKES) once it
expires on September 30, 2024. The
Exchange notes that the only Proprietary
Product offered by the Exchange is
SPIKES options. The Exchange initially
waived the monthly MEI Port fee for
Market Makers that trade solely in
Proprietary Products in order to attract
new market participants to trade
SPIKES options. Since the Exchange is
no longer listing new expiration months
in SPIKES options, and the Exchange
anticipates that there will be no
expiration months available for trading
following the expiration of the January
2025 SPIKES options, the Exchange will
no longer waive the monthly MEI Port
fee to attract market participants to trade
SPIKES options. The Exchange also
notes that there is no Market Makers
trading solely in SPIKES options, thus
the Exchange believes that removing the
waiver for the monthly MEI Port fee for
28 The FIX Drop Copy Port (‘‘FXD’’) is a
messaging interface that will provide a copy of realtime trade execution, trade correction and trade
cancellation information for simple and complex
orders to FIX Drop Copy Port users who subscribe
to the service. FIX Drop Copy Port users are those
users who are designated by an EEM to receive the
information and the information is restricted for use
by the EEM only. FXD Port Fees will be assessed
in any month the Member is credentialed to use the
FXD Port in the production environment. See Fee
Schedule, Section 5)d)iv).
29 See Fee Schedule 5)d)ii).
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Federal Register / Vol. 89, No. 200 / Wednesday, October 16, 2024 / Notices
Market Makers that trade solely in
Proprietary Products (including options
on SPIKES) would have no impact on
Members or the public.
Implementation
The proposed fee changes are
effective beginning October 1, 2024.
lotter on DSK11XQN23PROD with NOTICES1
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 30
in general, and furthers the objectives of
Section 6(b)(4) of the Act 31 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.
The Exchange believes that it is
reasonable, equitable, and not unfairly
discriminatory to modify the Incentive
Program for Market Makers in SPIKES
options. The amendment to the
Incentive Program is reasonably
designed because the Exchange is no
longer listing new expiration months in
SPIKES options. The Exchange
anticipates that there will be no
expiration months available for trading
following the expiration of the January
2025 SPIKES options. Lowering the
quoting requirements for the Incentive
Program would encourage more Market
Makers to participate in the Incentive
Program. Given that the Exchange
proposes to lower the threshold of the
quoting standards for the Incentive
Program, accordingly the Exchange
proposes to reduce the compensation
pools and the maximum amount
available to each individual Market
Maker for satisfying and/or exceeding
the minimum requirements of the
Incentive Program. The Incentive
Program is equitably allocated and not
unfairly discriminatory because the
amendment to the Incentive Program
applies to all SPIKES Market Makers.
Additionally, if a SPIKES Market Maker
does not satisfy the requirements of
Incentive 1 or 2, then that Market Maker
simply will not receive the rebate
30 15
31 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
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16:43 Oct 15, 2024
Jkt 265001
offered by the Incentive Program for that
month.
The Exchange believes that it is
reasonable, equitable and not unfairly
discriminatory to extend the Incentive
Program for Market Makers in SPIKES
options until January 31, 2025. 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 tight 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 SPIKES options
liquidity, which may increase 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.
Additionally, the Exchange believes
that the proposal to remove the fee
waivers for certain non-transaction fees
for Market Makers that trade solely in
Proprietary Products is reasonable. The
Exchange initially waived certain nontransaction fees for Market Makers that
trade solely in Proprietary Products in
order to attract new market participants
to trade SPIKES options. Since the
Exchange is no longer listing new
expiration months in SPIKES options,
and the Exchange anticipates that there
will be no expiration months available
for trading following the expiration of
the January 2025 SPIKES options, the
Exchange will no longer waive these
non-transaction fees to attract market
participants to trade SPIKES options.
The Exchange also notes that there is no
Market Makers trading solely in SPIKES
options, thus the Exchange believes that
removing the fee waivers for certain
non-transaction fees for Market Makers
that trade solely in Proprietary Products
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
(including options on SPIKES) would
have no impact on Members or the
public. The Exchange believes the
proposed removal of the fee waivers is
fair and equitable and not unreasonably
discriminatory because it applies to all
current and future market participants
on the Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
Intra-Market Competition
The Exchange believes that the
proposed modification and extension of
the Incentive Program to January 31,
2025, would continue to increase intramarket 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.
Additionally, the Exchange believes
that the proposal to remove certain of
the non-transaction fee waivers for
Market Makers that trade solely in
Proprietary Products would have no
impact on intra-market competition
because it applies to all new potential
Market Makers to quote in Proprietary
Products. The Exchange also notes that
there are no Market Makers trading
solely in SPIKES options, thus the
Exchange believes that removing the
waiver for the monthly MEI Port fee for
Market Makers that trade solely in
Proprietary Products (including options
on SPIKES) would have no impact on
intra-market competition.
The Exchange does not believe that
the proposed rule changes will impose
any burden on intra-market competition
that is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed changes for each
separate type of market participant (new
Market Makers and existing Market
Makers) will be assessed equally to all
such market participants.
Inter-Market Competition
The Exchange does not believe that
the proposed rule changes will impose
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Federal Register / Vol. 89, No. 200 / Wednesday, October 16, 2024 / Notices
any burden on inter-market competition
that is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed modification and
extension of the Incentive Program
applies only to the Market Makers in
SPIKES options, which are traded
exclusively on the Exchange.
Additionally, 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 removal of the fee waivers
applies only to the Exchange’s
Proprietary Products (including options
on SPIKES), 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
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,32 and Rule
19b–4(f)(2) 33 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
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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–2024–39. 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–2024–39 and should be
submitted on or before November 6,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–23802 Filed 10–15–24; 8:45 am]
BILLING CODE 8011–01–P
lotter on DSK11XQN23PROD with NOTICES1
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–2024–39 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101294; File No. SR–
MEMX–2024–39]
Self-Regulatory Organizations; MEMX
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the Exchange’s Fee
Schedule Concerning Equities
Transaction Pricing
October 9, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that, on October
2, 2024, MEMX LLC (‘‘MEMX’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing with the
Commission a proposed rule change to
amend the Exchange’s fee schedule
applicable to Members 3 (the ‘‘Fee
Schedule’’) pursuant to Exchange Rules
15.1(a) and (c). The Exchange proposes
to implement the changes to the Fee
Schedule pursuant to this proposal
immediately. The text of the proposed
rule change is provided in Exhibit 5.
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
U.S.C. 78s(b)(3)(A)(ii).
33 17 CFR 240.19b–4(f)(2).
VerDate Sep<11>2014
16:43 Oct 15, 2024
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Exchange Rule 1.5(p).
2 17
32 15
34 17
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CFR 200.30–3(a)(12).
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83535
E:\FR\FM\16OCN1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 200 (Wednesday, October 16, 2024)]
[Notices]
[Pages 83529-83535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23802]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101289; File No. SR-MIAX-2024-39]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule and Extend the SPIKES
Options Market Maker Incentive Program
October 9, 2024.
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 September 27, 2024, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend the MIAX Fee Schedule
(``Fee Schedule'') to (i) amend and extend the SPIKES options Market
Maker Incentive Program (the ``Incentive Program'') until January 31,
2025; and (ii) remove waivers for certain non-transaction fees
applicable to Market Makers \3\ that trade solely in Proprietary
Products.\4\
---------------------------------------------------------------------------
\3\ The term ``Market Makers'' refers to ``Lead Market Makers'',
``Primary Lead Market Makers'' and ``Registered Market Makers''
collectively. See Exchange Rule 100.
\4\ The term ``Proprietary Product'' means a class of options
that is listed exclusively on the Exchange. See Exchange Rule 100.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxglobal.com/markets/us-options/all-options-exchanges/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
[[Page 83530]]
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 (i) amend and
extend the SPIKES options Market Maker Incentive Program (the
``Incentive Program'') until January 31, 2025; and (ii) remove waivers
for certain non-transaction fees applicable to Market Makers that trade
solely in Proprietary Products.
Background
On October 12, 2018, the Exchange received approval from the U.S.
Securities and Exchange Commission (``Commission'') to list and trade
on the Exchange options on the SPIKES[supreg] Index, a new index that
measures expected 30-day volatility of the SPDR S&P 500 ETF Trust
(commonly known and referred to by its ticker symbol, ``SPY'').\5\ The
Exchange adopted its initial SPIKES options transaction fees on
February 15, 2019 and adopted a new section of the Fee Schedule for
those fees.\6\ Options on the SPIKES Index began trading on the
Exchange on February 19, 2019.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 84417 (October 12,
2018), 83 FR 52865 (October 18, 2018) (SR-MIAX-2018-14) (Order
Granting Approval of a Proposed Rule Change by Miami International
Securities Exchange, LLC to List and Trade on the Exchange Options
on the SPIKES[supreg] Index).
\6\ See Securities Exchange Release No. 85283 (March 11, 2019),
84 FR 9567 (March 15, 2019) (SR-MIAX-2019-11). The Exchange
initially filed the proposal on February 15, 2019 (SR-MIAX-2019-04).
That filing was withdrawn and replaced with SR-MIAX-2019-11. On
September 30, 2020, the Exchange filed its proposal to, among other
things, reorganize the Fee Schedule to adopt new Section (1)(b),
Proprietary Products Exchange Fees, and moved the fees and rebates
for SPIKES options into new Section (1)(b)(i). See Securities
Exchange Act Release Nos. 90146 (October 9, 2020), 85 FR 65443
(October 15, 2020) (SR-MIAX-2020-32); 90814 (December 29, 2020), 86
FR 327 (January 5, 2021) (SR-MIAX-2020-39).
---------------------------------------------------------------------------
On May 31, 2019, the Exchange filed its first proposal in a series
of proposals with the Commission to amend the Fee Schedule to waive
certain non-transaction fees applicable to Market Makers that trade
solely in Proprietary Products (including options on the SPIKES Index)
beginning June 1, 2019, through September 30, 2024.\7\ In particular,
the Exchange adopted fee waivers for Membership Application fees,
monthly Market Maker Trading Permit fees, Application Programming
Interface (``API'') Testing and Certification fees for Members,\8\ and
monthly MIAX Express Interface (``MEI'') Port \9\ fees assessed to
Market Makers that trade solely in Proprietary Products (including
options on SPIKES) throughout the entire period of June 1, 2019 through
September 30, 2024.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release Nos. 86109 (June 14,
2019), 84 FR 28860 (June 20, 2019) (SR-MIAX-2019-28); 87282 (October
10, 2019), 84 FR 55658 (October 17, 2019) (SR-MIAX-2019-43); 87897
(January 6, 2020), 85 FR 1346 (January 10, 2020) (SR-MIAX-2019-53);
89289 (July 10, 2020), 85 FR 43279 (July 16, 2020) (SR-MIAX-2020-
22); 90146 (October 9, 2020), 85 FR 65443 (October 15, 2020) (SR-
MIAX-2020-32); 90814 (December 29, 2020), 86 FR 327 (January 5,
2021) (SR-MIAX-2020-39); 91498 (April 7, 2021), 86 FR 19293 (April
13, 2021) (SR-MIAX-2021-06); 93881 (December 30, 2021), 87 FR 517
(January 5, 2022) (SR-MIAX-2021-63); 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); 97887 (July
12, 2023), 88 FR 45936 (July 18, 2023) (SR-MIAX-2023-28); 99047
(November 30, 2023), 88 FR 84861 (December 6, 2023) (SR-MIAX-2023-
46); and 100468 (July 9, 2024), 89 FR 57445 (July 15, 2024) (SR-
MIAX-2024-26).
\8\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
\9\ Full Service MEI Ports provide Market Makers with the
ability to send Market Maker simple and complex quotes, eQuotes, and
quote purge messages to the MIAX System. Full Service MEI Ports are
also capable of receiving administrative information. Market Makers
are limited to two Full Service MEI Ports per matching engine. See
Fee Schedule, Section 5)d)ii), footnote 28.
---------------------------------------------------------------------------
On September 30, 2021, the Exchange filed its initial proposal (SR-
MIAX-2021-45) to implement the Incentive Program for SPIKES options to
incentivize Market Makers to improve liquidity, available volume, and
the quote spread width of SPIKES options beginning October 1, 2021, and
ending December 31, 2021.\10\ Technical details regarding the Incentive
Program were published in a Regulatory Circular on September 30,
2021.\11\ On October 12, 2021, the Exchange withdrew SR-MIAX-2021-45
and refiled its proposal to implement the Incentive Program to provide
additional details.\12\ 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).\13\
---------------------------------------------------------------------------
\10\ See SR-MIAX-2021-45.
\11\ 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.
\12\ See Securities Exchange Act Release No. 93424 (October 26,
2021), 86 FR 60322 (November 1, 2021) (SR-MIAX-2021-49).
\13\ See id.
---------------------------------------------------------------------------
Between December 23, 2021, and June 28, 2024, the Exchange filed
several proposals to extend the Incentive Program, with the last
extension period ending September 30, 2024.\14\ 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).\15\
---------------------------------------------------------------------------
\14\ 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); 97883 (July 12, 2023), 88 FR 45941 (July
18, 2023) (SR-MIAX-2023-26); 99040 (November 29, 2023), 88 FR 84374
(December 5, 2023) (SR-MIAX-2023-47); 99902 (April 3, 2024), 89 FR
24883 (April 9, 2024) (SR-MIAX-2024-17); and 100468 (July 9, 2024),
89 FR 57445 (July 15, 2024) (SR-MIAX-2024-26).
\15\ See id.
---------------------------------------------------------------------------
Proposal To Amend and Extend the Incentive Program
The Exchange now proposes to amend and extend the Incentive Program
for SPIKES options to continue to incentivize Market Makers to improve
liquidity and available volume in SPIKES options by amending the quotes
spread width requirements and the amounts of the incentive compensation
pools.
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.\16\ The Exchange has devised a methodology where
each qualifying Market Maker's ITM/OTM market width for eligible
Incentive Program options is calculated. Eligible ITM options require a
maximum quote spread width of 150 basis points (``bps'') and each
eligible OTM option requires a maximum quote spread width of 100
bps.\17\ 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
[[Page 83531]]
satisfy and/or exceed the criteria pursuant to the Incentive Program.
---------------------------------------------------------------------------
\16\ See supra note 11.
\17\ Calculation of bps is described in Regulatory Circular
2021-56. See supra note 11.
---------------------------------------------------------------------------
The Exchange now proposes to double the maximum quote spread width
parameters for both ITM options and OTM options. Specifically, the
Exchange proposes to increase the maximum quote spread width from 150
bps to 300 bps for a Market Maker quoting ITM options to be eligible to
participate in the Incentive Program. The Exchange also proposes to
increase the maximum quote spread width from 100 bps to 200 bps for a
Market Maker quoting OTM options to be eligible to participate in the
Incentive Program. The Exchange will communicate the new requirements
of the Incentive Program to Members via Regulatory Circular.\18\
---------------------------------------------------------------------------
\18\ See MIAX Options Exchange Regulatory Circular 2024-54,
Updated SPIKES Options Market Maker Incentive Program (September 26,
2024), available at https://www.miaxglobal.com/markets/us-options/miax-options/regulatory-circulars.
---------------------------------------------------------------------------
Currently, the first pool (Incentive 1) is capped at $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.\19\ 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.\20\ 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 contracts.\21\ 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.
---------------------------------------------------------------------------
\19\ See supra note 11.
\20\ See id.
\21\ In the event there is only one monthly expiration listed,
the requirements are only applicable to that single month.
---------------------------------------------------------------------------
The Exchange now proposes to amend the terms of Incentive 1.
Specifically, the Exchange proposes to reduce the total compensation
pool of Incentive 1 from $40,000 per month to $10,000 per month. The
Exchange also proposes to reduce the maximum amount available to each
individual Market Maker for satisfying the minimum requirements of the
Incentive Program from $10,000 per month to $5,000 per month. The
Exchange proposes that, in the event that more than two Market Makers
meet the requirements of Incentive 1, each qualifying Market Maker is
entitled to receive a pro-rated share of the $10,000 monthly
compensation pool dependent upon the number of qualifying Market Makers
in that particular month.
Currently, the second pool (Incentive 2) is capped at a total
amount of $100,000 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 with the total compensation pool amount
based on qualifying Market Makers' improvement value over the minimum
requirement score. 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,\22\ are eligible to receive a pro-rated share of
the compensation pool 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.
---------------------------------------------------------------------------
\22\ See supra note 11.
---------------------------------------------------------------------------
The Exchange now proposes to amend the terms of Incentive 2.
Specifically, the Exchange proposes to reduce the total compensation
pool of Incentive 2 from a maximum of $100,000 per month to a maximum
of $25,000 per month. The Exchange also proposes to reduce the maximum
amount available to each individual Market Maker for satisfying the
requirements of Incentive 2 from $25,000 per month to $12,500 per
month.
The purpose of the proposed changes is for business reasons. The
Exchange proposes to lower the quoting requirements because the
Exchange is no longer listing new expiration months in SPIKES options.
The Exchange anticipates that there will be no expiration months
available for trading following the expiration of the January 2025
SPIKES options. The Exchange believes that it is appropriate to lower
the threshold of the quoting standards for the Incentive Program to
further encourage more SPIKES Market Makers to participate in the
Incentive Program. The Exchange also proposes to reduce the
compensation pools and the maximum amount available to each individual
Market Maker for satisfying and/or exceeding the minimum requirements
of the Incentive Program because the Exchange proposes to lower the
quoting requirements for the Incentive Program.
In addition, the Exchange proposes to extend the Incentive Program
until January 31, 2025. The purpose of this extension is to continue to
incentivize Market Makers to provide quotes in SPIKES options and to
improve liquidity and available volume.
The Exchange will announce the amendment and extension of the
Incentive Program to all Members via a Regulatory Circular.\23\
---------------------------------------------------------------------------
\23\ See supra note 18. 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.
---------------------------------------------------------------------------
Proposal To Remove the Fee Waivers for Market Markets That Trade Solely
in Proprietary Products (Including SPIKES Options)
Currently, the Exchange offers fee waivers for (i) Membership
Application fees, (ii) monthly Market Maker Trading Permit fees, (iii)
Member API Testing and Certification fees, and (iv) monthly MEI Port
fees, to Market Makers that trade solely in Proprietary Products
(including options on SPIKES). The fee waivers for the aforementioned
fees will end on September 30, 2024. The Exchange now proposes to
remove the aforementioned fee waivers from the Fee Schedule once they
expire on September 30, 2024.
Membership Application Fees
The Exchange currently assesses a one-time Membership Application
fee for applications of potential Members. The Exchange assesses a one-
time Membership Application fee on the earlier of (i) the date the
applicant is certified in the membership system, or (ii) once an
application for MIAX membership is finally denied. The one-time
application fee is based upon the
[[Page 83532]]
applicant's status as either a Market Maker or an Electronic Exchange
Member (``EEM'').\24\ A Market Maker is assessed a one-time Membership
Application fee of $3,000. However, the Exchange currently offers a
waiver of the Membership Application fee for Market Makers that will
trade solely in Proprietary Products. This waiver is set to expire on
September 30, 2024.
---------------------------------------------------------------------------
\24\ The term ``Electronic Exchange Member'' or ``EEM'' means
the holder of a Trading Permit who is not a Market Maker. Electronic
Exchange Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
---------------------------------------------------------------------------
The Exchange now proposes to remove the waiver for the one-time
Membership Application fee of $3,000 for Market Makers that trade
solely in Proprietary Products (including options on SPIKES) once it
expires on September 30, 2024. The Exchange notes that the only
Proprietary Product offered by the Exchange is SPIKES options. The
Exchange initially waived the Membership Application fee for Market
Makers that trade solely in Proprietary Products in order to attract
new market participants to trade SPIKES options. Since the Exchange is
no longer listing new expiration months in SPIKES options, and the
Exchange anticipates that there will be no expiration months available
for trading following the expiration of the January 2025 SPIKES
options, the Exchange will no longer waive the Membership Application
fee to attract market participants to trade SPIKES options.
Trading Permit Fees
The Exchange issues Trading Permits that confer the ability to
transact on the Exchange. MIAX Trading Permits are issued to Market
Makers and EEMs. Members receiving Trading Permits during a particular
calendar month are assessed monthly Trading Permit fees as set forth in
the Fee Schedule. As it relates to Market Makers, the Exchange
currently assesses a monthly Trading Permit fee in any month the Market
Maker is certified in the membership system, is credentialed to use one
or more MIAX MEI Ports in the production environment and is assigned to
quote in one or more classes. The Exchange assesses the monthly Market
Maker Trading Permit fee for its Market Makers based on the greatest
number of classes listed on the Exchange that the Market Maker was
assigned to quote in on any given day within a calendar month and the
applicable fee rate is the lesser of either the per class basis or
percentage of total national average daily volume measurements. A
Market Maker is assessed a monthly Trading Permit fee according to the
following table: \25\
---------------------------------------------------------------------------
\25\ See Fee Schedule, Section (3)(b).
----------------------------------------------------------------------------------------------------------------
Market Maker assignments (the lesser of the applicable
Monthly MIAX measurements below) [Omega]
Type of trading permit trading permit ---------------------------------------------------------
fee % of national average daily
Per class volume
----------------------------------------------------------------------------------------------------------------
Market Maker (includes RMM, LMM, PLMM) $7,000.00 Up to 10 Classes......... Up to 20% of Classes by
volume.
12,000.00 Up to 40 Classes......... Up to 35% of Classes by
volume.
* 17,000.00 Up to 100 Classes........ Up to 50% of Classes by
volume.
* 22,000.00 Over 100 Classes......... Over 50% of Classes by volume
up to all Classes listed on
MIAX.
----------------------------------------------------------------------------------------------------------------
[Omega] Excludes Proprietary Products.
* For these Monthly MIAX Trading Permit Fee levels, if the Market Maker's total monthly executed volume during
the relevant month is less than 0.060% of the total monthly executed volume reported by OCC in the market
maker account type for MIAX-listed option classes for that month, then the fee will be $15,500 instead of the
fee otherwise applicable to such level.
However, the Exchange currently offers a waiver of the Trading
Permit fee for Market Makers that will trade solely in Proprietary
Products. This waiver is set to expire on September 30, 2024.
The Exchange now proposes to remove the waiver for the monthly
Trading Permit fee for Market Makers that trade solely in Proprietary
Products (including options on SPIKES) once it expires on September 30,
2024. The Exchange notes that the only Proprietary Products offered by
the Exchange is SPIKES options. The Exchange initially waived the
monthly Trading Permit fee for Market Makers that trade solely in
Proprietary Products in order to attract new market participants to
trade SPIKES options. Since the Exchange is no longer listing new
expiration months in SPIKES options, and the Exchange anticipates that
there will be no expiration months available for trading following the
expiration of the January 2025 SPIKES options, the Exchange will no
longer waive the monthly Trading Permit fee to attract market
participants to trade SPIKES options. The Exchange also notes that
there are no Market Makers trading solely in SPIKES options, thus the
Exchange believes that removing the waiver for the monthly Trading
Permit fee for Market Makers that trade solely in Proprietary Products
(including options on SPIKES) would have no impact on Members or the
public.
API Testing and Certification Fees
The Exchange assesses an API Testing and Certification fee to all
Members depending upon Membership type. An API makes it possible for
Members' software to communicate with MIAX software applications, and
is subject to Members testing with, and certification by, MIAX. The
Exchange offers four types of interfaces: (i) the Financial Information
Exchange Port (``FIX Port''),\26\ which enables the FIX Port user
(typically an EEM or a Market Maker) to submit simple and complex
orders electronically to MIAX; (ii) the MEI Port, which enables Market
Makers to submit simple and complex electronic quotes to MIAX; (iii)
the Clearing Trade Drop Port (``CTD Port''),\27\ which provides real-
time trade clearing information to the participants to a trade on MIAX
and to the participants' respective clearing firms;
[[Page 83533]]
and (iv) the FIX Drop Copy Port (``FXD Port''),\28\ which provides a
copy of real-time trade execution, correction and cancellation
information through a FIX Port to any number of FIX Ports designated by
an EEM to receive such messages.
---------------------------------------------------------------------------
\26\ A FIX Port is an interface with MIAX systems that enables
the Port user (typically an Electronic Exchange Member or a Market
Maker) to submit simple and complex orders electronically to MIAX.
See Fee Schedule, Section 5)d)i).
\27\ Clearing Trade Drop (``CTD'') provides Exchange members
with real-time clearing trade updates. The updates include the
Member's clearing trade messages on a low latency, real-time basis.
The trade messages are routed to a Member's connection containing
certain information. The information includes, among other things,
the following: (i) trade date and time; (ii) symbol information;
(iii) trade price/size information; (iv) Member type (for example,
and without limitation, Market Maker, Electronic Exchange Member,
Broker-Dealer); (v) Exchange Member Participant Identifier
(``MPID'') for each side of the transaction, including Clearing
Member MPID; and (vi) strategy specific information for complex
transactions. CTD Port Fees will be assessed in any month the Member
is credentialed to use the CTD Port in the production environment.
See Fee Schedule, Section 5)d)iii.
\28\ The FIX Drop Copy Port (``FXD'') is a messaging interface
that will provide a copy of real-time trade execution, trade
correction and trade cancellation information for simple and complex
orders to FIX Drop Copy Port users who subscribe to the service. FIX
Drop Copy Port users are those users who are designated by an EEM to
receive the information and the information is restricted for use by
the EEM only. FXD Port Fees will be assessed in any month the Member
is credentialed to use the FXD Port in the production environment.
See Fee Schedule, Section 5)d)iv).
---------------------------------------------------------------------------
API Testing and Certification fees for Market Makers are assessed
(i) initially per API for CTD and MEI ports in the month the Market
Maker has been credentialed to use one or more ports in the production
environment for the tested API and the Market Maker has been assigned
to quote in one or more classes, and (ii) each time a Market Maker
initiates a change to its system that requires testing and
certification. API Testing and Certification fees will not be assessed
in situations where the Exchange initiates a mandatory change to the
Exchange's system that requires testing and certification. The Exchange
currently assesses a Market Maker an API Testing and Certification fee
of $2,500. The API Testing and Certification fees represent costs
incurred by the Exchange as it works with each Member for testing and
certifying that the Member's software systems communicate properly with
the Exchange's interfaces. However, the Exchange currently offers a
waiver of the API Testing and Certification Fee for Market Makers that
will trade solely in Proprietary Products. This waiver is set to expire
on September 30, 2024.
The Exchange now proposes to remove the waiver of the API Testing
and Certification fee for Market Makers that trade solely in
Proprietary Products (including options on SPIKES) from the Fee
Schedule once it expires on September 30, 2024. The Exchange notes that
the only Proprietary Products offered by the Exchange is SPIKES
options. The Exchange initially waived the API Testing and
Certification fee for Market Makers that trade solely in Proprietary
Products in order to attract new market participants to trade SPIKES
options. Since the Exchange is no longer listing new expiration months
in SPIKES options, and the Exchange anticipates that there will be no
expiration months available for trading following the expiration of the
January 2025 SPIKES options, the Exchange will no longer waive the API
Testing and Certification fee to attract market participants to trade
SPIKES options. The Exchange also notes that there is no Market Makers
trading solely in SPIKES options, thus the Exchange believes that
removing the waiver for the API Testing and Certification fee for
Market Makers that trade solely in Proprietary Products (including
options on SPIKES) would have no impact on Members or the public.
MEI Port Fees
The Exchange assesses monthly MEI Port fees to Market Makers in
each month the Member has been credentialed to use the MEI Port in the
production environment and has been assigned to quote in at least one
class. The amount of the monthly MEI Port fee is based upon the number
of classes in which the Market Maker was assigned to quote on any given
day within the calendar month, and upon the class volume percentages
set forth in the Fee Schedule. The class volume percentage is based on
the total national average daily volume in classes listed on the
Exchange in the prior calendar quarter. Newly listed option classes are
excluded from the calculation of the monthly MEI Port fee until the
calendar quarter following their listing, at which time the newly
listed option classes will be included in both the per class count and
the percentage of total national average daily volume. The Exchange
assesses Market Makers the monthly MEI Port fee based on the greatest
number of classes listed on the Exchange that the Market Maker was
assigned to quote in on any given day within a calendar month and the
applicable fee rate that is the lesser of either the per class basis or
percentage of total national average daily volume measurement. The
Exchange assesses MEI Port fees on Market Makers according to the
following table: \29\ However, the Exchange currently offers a waiver
of the MEI Port Fee for Market Makers that trade solely in Proprietary
Products. This waiver is set to expire on September 30, 2024.
---------------------------------------------------------------------------
\29\ See Fee Schedule 5)d)ii).
------------------------------------------------------------------------
Market maker assignments (the lesser of
the applicable measurements below)
[Omega]
Monthly MIAX MEI fees -----------------------------------------
% of national average
Per class daily volume
------------------------------------------------------------------------
$5,000.00..................... Up to 5 Classes.. Up to 10% of Classes
by volume.
10,000.00..................... Up to 10 Classes. Up to 20% of Classes
by volume.
14,000.00..................... Up to 40 Classes. Up to 35% of Classes
by volume.
17,500.00 *................... Up to 100 Classes Up to 50% of Classes
by volume.
20,500.00 *................... Over 100 Classes. Over 50% of Classes
by volume up to all
Classes listed on
MIAX.
------------------------------------------------------------------------
[Omega] Excludes Proprietary Products.
* For these Monthly MIAX MEI Fees levels, if the Market Maker's total
monthly executed volume during the relevant month is less than 0.060%
of the total monthly executed volume reported by OCC in the market
maker account type for MIAX-listed option classes for that month, then
the fee will be $14,500 instead of the fee otherwise applicable to
such level.
The Exchange now proposes to remove the waiver of the monthly MEI
Port fee for Market Makers that trade solely in Proprietary Products
(including options on SPIKES) once it expires on September 30, 2024.
The Exchange notes that the only Proprietary Product offered by the
Exchange is SPIKES options. The Exchange initially waived the monthly
MEI Port fee for Market Makers that trade solely in Proprietary
Products in order to attract new market participants to trade SPIKES
options. Since the Exchange is no longer listing new expiration months
in SPIKES options, and the Exchange anticipates that there will be no
expiration months available for trading following the expiration of the
January 2025 SPIKES options, the Exchange will no longer waive the
monthly MEI Port fee to attract market participants to trade SPIKES
options. The Exchange also notes that there is no Market Makers trading
solely in SPIKES options, thus the Exchange believes that removing the
waiver for the monthly MEI Port fee for
[[Page 83534]]
Market Makers that trade solely in Proprietary Products (including
options on SPIKES) would have no impact on Members or the public.
Implementation
The proposed fee changes are effective beginning October 1, 2024.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \30\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \31\ 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.
---------------------------------------------------------------------------
\30\ 15 U.S.C. 78f(b).
\31\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that it is reasonable, equitable, and not
unfairly discriminatory to modify the Incentive Program for Market
Makers in SPIKES options. The amendment to the Incentive Program is
reasonably designed because the Exchange is no longer listing new
expiration months in SPIKES options. The Exchange anticipates that
there will be no expiration months available for trading following the
expiration of the January 2025 SPIKES options. Lowering the quoting
requirements for the Incentive Program would encourage more Market
Makers to participate in the Incentive Program. Given that the Exchange
proposes to lower the threshold of the quoting standards for the
Incentive Program, accordingly the Exchange proposes to reduce the
compensation pools and the maximum amount available to each individual
Market Maker for satisfying and/or exceeding the minimum requirements
of the Incentive Program. The Incentive Program is equitably allocated
and not unfairly discriminatory because the amendment to the Incentive
Program applies to all SPIKES Market Makers. Additionally, if a SPIKES
Market Maker does not satisfy the requirements of Incentive 1 or 2,
then that Market Maker 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 extend the Incentive Program for Market
Makers in SPIKES options until January 31, 2025. 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 tight 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 SPIKES
options liquidity, which may increase 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.
Additionally, the Exchange believes that the proposal to remove the
fee waivers for certain non-transaction fees for Market Makers that
trade solely in Proprietary Products is reasonable. The Exchange
initially waived certain non-transaction fees for Market Makers that
trade solely in Proprietary Products in order to attract new market
participants to trade SPIKES options. Since the Exchange is no longer
listing new expiration months in SPIKES options, and the Exchange
anticipates that there will be no expiration months available for
trading following the expiration of the January 2025 SPIKES options,
the Exchange will no longer waive these non-transaction fees to attract
market participants to trade SPIKES options. The Exchange also notes
that there is no Market Makers trading solely in SPIKES options, thus
the Exchange believes that removing the fee waivers for certain non-
transaction fees for Market Makers that trade solely in Proprietary
Products (including options on SPIKES) would have no impact on Members
or the public. The Exchange believes the proposed removal of the fee
waivers is fair and equitable and not unreasonably discriminatory
because it applies to all current and future market participants on the
Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
Intra-Market Competition
The Exchange believes that the proposed modification and extension
of the Incentive Program to January 31, 2025, 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.
Additionally, the Exchange believes that the proposal to remove
certain of the non-transaction fee waivers for Market Makers that trade
solely in Proprietary Products would have no impact on intra-market
competition because it applies to all new potential Market Makers to
quote in Proprietary Products. The Exchange also notes that there are
no Market Makers trading solely in SPIKES options, thus the Exchange
believes that removing the waiver for the monthly MEI Port fee for
Market Makers that trade solely in Proprietary Products (including
options on SPIKES) would have no impact on intra-market competition.
The Exchange does not believe that the proposed rule changes will
impose any burden on intra-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed changes for each separate type of market participant (new
Market Makers and existing Market Makers) will be assessed equally to
all such market participants.
Inter-Market Competition
The Exchange does not believe that the proposed rule changes will
impose
[[Page 83535]]
any burden on inter-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed modification and extension of the Incentive Program applies
only to the Market Makers in SPIKES options, which are traded
exclusively on the Exchange.
Additionally, 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 removal of the fee waivers applies only to the
Exchange's Proprietary Products (including options on SPIKES), 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
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,\32\ and Rule 19b-4(f)(2) \33\ thereunder.
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\32\ 15 U.S.C. 78s(b)(3)(A)(ii).
\33\ 17 CFR 240.19b-4(f)(2).
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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 change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form
(https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-MIAX-2024-39 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-2024-39. 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-2024-39 and should be
submitted on or before November 6, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
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\34\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-23802 Filed 10-15-24; 8:45 am]
BILLING CODE 8011-01-P
