
[Federal Register Volume 80, Number 52 (Wednesday, March 18, 2015)]
[Notices]
[Pages 14196-14198]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06093]



[[Page 14196]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74489; File No. SR-MIAX-2015-13]


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

March 12, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 27, 2015, Miami International Securities Exchange LLC 
(``MIAX'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Options Fee 
Schedule.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.miaxoptions.com/filter/wotitle/rule_filing, at 
MIAX's principal office, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its current MIAX Market Maker \3\ 
sliding scale for transaction fees to: (i) Modify the volume thresholds 
in tiers 1, 2, 3; (ii) increase the transaction fee for volume tier 1; 
and (iii) increase the Priority Customer rebate incentive for tier 1.
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    \3\ ``MIAX Market Maker'' for purposes of the proposed sliding 
scale means any MIAX Market Maker including RMM, LMM, PLMM, DLMM, 
and DPLMM.
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    The sliding scale for MIAX Market Maker transaction fees is based 
on the substantially similar fees of the Chicago Board Options 
Exchange, Incorporated (``CBOE'').\4\ Specifically, the program reduces 
a MIAX Market Maker's per contract transaction fee based on percentages 
of total national Market Maker volume of any options classes that trade 
on the exchange during the calendar month, based on the following 
scale:
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    \4\ See Securities Exchange Act Release Nos. 55193 (January 30, 
2007), 72 FR 5476 (February 6, 2007) (SR-CBOE-2006-111); 57191 
(January 24, 2008), 73 FR 5611 (January 30, 2008); 58321 (August 6, 
2008), 73 FR 46955 (SR-CBOE-2008-78). See also CBOE Fees Schedule, 
p. 3.

------------------------------------------------------------------------
                                                             Transaction
          Tier              Percentage of  national Market     fee per
                                     Maker volume              contract
------------------------------------------------------------------------
1.......................  0.00%-0.05%......................        $0.25
2.......................  Above 0.05%-0.50%................         0.17
3.......................  Above 0.50%-0.80%................         0.12
4.......................  Above 0.80%-1.50%................         0.07
5.......................  Above 1.50%......................         0.05
------------------------------------------------------------------------

    The sliding scale would apply to all MIAX Market Makers for 
transactions in all products except mini-options. By amending the 
volume tier calculations, the sliding scale will more closely align 
with that of CBOE.\5\ A MIAX Market Maker's initial $0.25 per contract 
rate will be reduced if the MIAX Market Maker reaches the volume 
thresholds set forth in the sliding scale in a month. As a MIAX Market 
Maker's monthly volume increases, its per contract transaction fee 
would decrease. The Market Maker sliding scale will continue to apply 
to MIAX Market Maker (RMM, LMM, DLMM, PLMM, DPLMM) transaction fees in 
all products except mini-options. MIAX Market Makers will continue to 
be assessed a $0.02 per executed contract fee for transactions in mini-
options.
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    \5\ See Securities Exchange Act Release Nos. 55193 (January 30, 
2007), 72 FR 5476 (February 6, 2007) (SR-CBOE-2006-111); 58321 
(August 6, 2008), 73 FR 46955 (SR-CBOE-2008-78); 71295 (January 14, 
2014), 79 FR 3443 (January 21, 2014) (SR-CBOE-2013-129).
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    The Exchange believes the proposed sliding scale is objective in 
that the fee reductions are based solely on reaching stated volume 
thresholds. The specific volume thresholds of the tiers were set based 
upon business determinations and an analysis of current volume levels. 
The specific volume thresholds and rates were set in order to encourage 
MIAX Market Makers to reach for higher tiers. The Exchange believes 
that the proposed changes to the tiered fee schedule may incent firms 
to display their orders on the Exchange and increase the volume of 
contracts traded here.
    As mentioned above, the Exchange notes that the proposed sliding 
fee scale for MIAX Market Makers structured on contract volume 
thresholds is based on the substantially similar fees of the CBOE.\6\ 
The Exchange also notes that a number of other exchanges have tiered 
fee schedules which offer different transaction fee rates depending on 
the monthly ADV of liquidity providing executions on their 
facilities.\7\
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    \6\ See Securities Exchange Act Release Nos. 55193 (January 30, 
2007), 72 FR 5476 (February 6, 2007) (SR-CBOE-2006-111); 58321 
(August 6, 2008), 73 FR 46955 (SR-CBOE-2008-78); 71295 (January 14, 
2014), 79 FR 3443 (January 21, 2014) (SR-CBOE-2013-129).
    \7\ See, e.g., International Securities Exchange, LLC, Schedule 
of Fees, Section IV, C; NASDAQ Options Market, Chapter XV, Section 
2.
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    The Exchange also proposes to increase the rebate incentive for 
Priority Customer orders to correspond with the increase in the 
transaction fee for tier 1 of the MIAX Market Maker sliding scale. The 
Exchange offers MIAX Market Makers the opportunity to reduce 
transaction fees by $0.02 per contract in standard options if the 
Member or its affiliates of at least 75% common ownership between the 
firms as reflected on each firm's Form BD, Schedule A, qualifies in a 
given month for Priority Customer Rebate Program volume tiers 3, 4, or 
5 in the Fee Schedule. The Exchange proposes to amend the rebate 
incentive for Priority Customer orders in order to increase the rebate 
incentive for tier 1 to correspond with the increase in transaction 
fees for volume tier 1 of the MIAX Market Maker sliding scale. As 
proposed, any Member or its affiliates of at least 75% common ownership 
between the firms as reflected on each firm's Form BD, Schedule A, that 
qualifies for Priority Customer Rebate Program volume tiers 3, 4, or 5 
and is a MIAX Market Maker will be assessed $0.23 per contract for tier 
1, $0.15 per contract for tier 2, $0.10 per contract for tier 3, $0.05 
per contract for tier 4, and $0.03 per contract for tier 5 for 
transactions in standard options in lieu of the applicable transaction 
fees in the Market Maker sliding scale.
    The Exchange believes that these incentives will encourage MIAX 
Market Makers to transact a greater number of orders on the Exchange.

[[Page 14197]]

    Finally, the Exchange proposes to modify the name of the title of 
the column in the chart from ``Contracts Per Month'' to ``Percentage 
Thresholds of National Market Maker Volume''. The Exchange believes 
that the new title more clearly describes the type of threshold 
methodology that is being used for the fee.
    The proposed changes will become operative on March 1, 2015.
2. Statutory Basis
    The Exchange believes that its proposal to amend its fee schedule 
is consistent with Section 6(b) of the Act \8\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \9\ in particular, in that 
it is an equitable allocation of reasonable fees and other charges 
among Exchange members.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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    The proposed volume based discount fee structure is not 
discriminatory in that all MIAX Market Makers are eligible to submit 
(or not submit) liquidity, and may do so at their discretion in the 
daily volumes they choose during the course of the billing period. All 
similarly situated MIAX Market Makers are subject to the same fee 
structure, and access to the Exchange is offered on terms that are not 
unfairly discriminatory. Volume based discounts have been widely 
adopted by options and equities markets, and are equitable because they 
are open to all MIAX Market Makers on an equal basis and provide 
discounts that are reasonably related to the value of an exchange's 
market quality associated with higher volumes. The proposed fee levels 
and volume thresholds are reasonably designed to be comparable to those 
of other options exchanges employing similar fee programs, and also to 
attract additional liquidity and order flow to the Exchange.
    The Exchange's proposal to provide MIAX Market Makers the 
opportunity to reduce transaction fees by $0.02 per contract in 
standard options, provided certain criteria are met, is reasonable 
because the Exchange desires to offer all such market participants an 
opportunity to lower their transaction fees. The Exchange's proposal to 
offer MIAX Market Makers the opportunity to reduce transaction fees by 
$0.02 per contract in standard options, provided certain criteria are 
met, is equitable and not unfairly discriminatory because the Exchange 
offers all market participants, excluding Priority Customers, a means 
to reduce transaction fees by qualifying for volume tiers in the 
Priority Customer Rebate Program. The Exchange believes that offering 
all such market participants the opportunity to lower transaction fees 
by incentivizing them to transact Priority Customer order flow in turn 
benefits all market participants.
    Finally, the Exchange believes that the proposed to change to the 
name of the title of the column in the chart from ``Contracts Per 
Month'' to ``Percentage Thresholds of National Market Maker Volume'' is 
reasonable in that the new title more clearly describes the type of 
threshold methodology that is being used for the fee.

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. The Exchange notes that it 
operates in a highly competitive market in which market participants 
can readily favor competing venues if they deem fee levels at a 
particular venue to be excessive. In such an environment, the Exchange 
must continually adjust its fees to remain competitive with other 
exchanges and to attract order flow. The Exchange believes that the 
proposed rule change reflects this competitive environment because it 
modifies the Exchange's fees in a manner that encourages market 
participants to provide liquidity and to send order flow to 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.\10\ At any time within 60 days of the 
filing of the proposed rule change, the Commission summarily may 
temporarily suspend such rule change if it appears to the Commission 
that such action is necessary or appropriate in the public interest, 
for the protection of investors, or otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-MIAX-2015-13 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-2015-13. 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 Web site (http://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 Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal offices of the Exchange. 
All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-MIAX-2015-13, 
and should be submitted on or before April 8, 2015.


[[Page 14198]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-06093 Filed 3-17-15; 08:45 am]
 BILLING CODE 8011-01-P


