
[Federal Register Volume 80, Number 153 (Monday, August 10, 2015)]
[Notices]
[Pages 47980-47982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-19540]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75603; File No. SR-MIAX-2015-49]


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

August 4, 2015.
    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 July 30, 2015, Miami International Securities 
Exchange LLC (``MIAX'' or ``Exchange'') filed with the Securities and 
Exchange Commission (``Commission'') a proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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 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.

[[Page 47981]]

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 Fee Schedule to adopt 
transaction fees for Qualified Contingent Cross (``QCC'') transactions. 
A QCC Order is comprised of an order to buy or sell at least 1,000 
contracts (or 10,000 mini-option contracts) that is identified as being 
part of a qualified contingent trade, coupled with a contra side order 
to buy or sell an equal number of contracts. The Exchange is proposing 
to establish fees for QCC Orders to coincide with the acceptance of QCC 
Orders on the Exchange beginning August 1, 2015.
    The proposed fees are based on the substantially similar fees of 
another competing options exchange.\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 75321 (June 29, 
2015), 80 FR 38489 (July 6, 2015) (SR-CBOE-2015-059).
---------------------------------------------------------------------------

    The Exchange proposes to establish a transaction fee for all non-
Priority Customer \4\ QCC Orders of $0.15 per contract side (Priority 
Customer orders will not be assessed a charge). In addition, the 
Exchange proposes to adopt a $0.10 per contract credit for the 
initiating order side, regardless of origin code. The Exchange proposes 
to explicitly provide in the Fee Schedule that the credit will be paid 
to the Member that enters the order into the System, but will only be 
paid on the initiating side of the QCC transaction. However, no rebates 
will be paid for QCC transactions in which both the initiator and 
contra-side orders are Priority Customers.
---------------------------------------------------------------------------

    \4\ The term ``Priority Customer'' means a person or entity that 
(i) is not a broker or dealer in securities, and (ii) does not place 
more than 390 orders in listed options per day on average during a 
calendar month for its own beneficial accounts(s). See Exchange Rule 
100.
---------------------------------------------------------------------------

    Additionally, the Exchange proposes to state explicitly in the Fee 
Schedule that a QCC transaction is comprised of an `initiating order' 
to buy (sell) at least 1,000 contracts or 10,000 mini-option contracts, 
coupled with a contra-side order to sell (buy) an equal number of 
contracts.\5\ The Exchange notes that with regard to order entry, the 
first order submitted into the system is marked as the initiating side 
and the second order is marked as the contra side
---------------------------------------------------------------------------

    \5\ See Exchange Rule 516(j).
---------------------------------------------------------------------------

    The purpose of these changes is to incentivize the sending of QCC 
Orders to the Exchange. The Exchange notes that other competing 
exchanges similarly provide rebates on QCC initiating orders.\6\ The 
Exchange also notes that QCC orders comprised of mini-contracts will be 
assessed QCC fees and afforded rebates equal to 10% of the fees and 
rebates applicable to QCC Orders comprised of standard option 
contracts. The Exchange is also proposing to amend Section 1(b) of the 
Fee Schedule to reflect that MIAX will not assess a Marketing Fee \7\ 
for contracts executed as a QCC, and will not assess the additional 
Posted Liquidity Marketing Fee \8\ to Market Makers for contracts 
executed as QCC Orders.
---------------------------------------------------------------------------

    \6\ See Chicago Board Options Exchange, Fees Schedule; 
International Securities Exchange, LLC (``ISE'') Schedule of Fees.
    \7\ MIAX assesses a Marketing Fee to all Market Makers for 
contracts, including mini options, they execute in their assigned 
classes when the contra-party to the execution is a Priority 
Customer. See Fee Schedule section 1(b).
    \8\ MIAX assesses an additional $0.12 per contract Posted 
Liquidity Marketing Fee to all Market Makers for any standard 
options overlying EEM, GLD, IWM, QQQ, and SPY that Market Makers 
execute in their assigned class when the contra-party to the 
execution is a Priority Customer and the Priority Customer order was 
posted on the MIAX Book at the time of the execution. Id.
---------------------------------------------------------------------------

    Finally, the Exchange proposes to provide that QCC Orders are 
excluded from: (i) The volume threshold calculations for the Market 
Maker Sliding Scale; (ii) and the rebates and volume calculations as 
part of the Priority Customer Rebate Program. The Exchange believes 
that excluding QCC Orders from these fees and rebates is appropriate, 
because QCC Orders from Market Makers and Priority Customers will be 
subject to the specific transaction fees as described above that are 
tailored specifically for encouraging market participants to transact 
QCC Orders on the Exchange. The Exchange does not believe that it is 
necessary at this time to extend the favorable volume fee rates nor the 
rebate program to QCC Orders.
    The Exchange proposes to implement the proposed changes beginning 
August 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 \9\ in general, and furthers 
the objectives of section 6(b)(4) of the Act \10\ in particular, in 
that it is an equitable allocation of reasonable fees and other charges 
among Exchange members.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes the proposed transaction fee for QCC Orders 
is reasonable because the proposed amount is in line with the amount 
assessed at other Exchanges for similar transactions.\11\ Additionally, 
the proposed fee would be charged to all non-Priority Customers alike. 
Assessing QCC rates to all market participants except Priority 
Customers is equitable and not unfairly discriminatory because Priority 
Customer order flow enhances liquidity on the Exchange for the benefit 
of all market participants. Specifically, Priority Customer liquidity 
benefits all market participants by providing more trading 
opportunities, which attracts Market-Makers. An increase in the 
activity of these market participants in turn facilitates tighter 
spreads, which may cause an additional corresponding increase in order 
flow from other market participants. By exempting Priority Customer 
orders, the QCC transaction fees will not discourage the sending of 
Priority Customer orders.
---------------------------------------------------------------------------

    \11\ See Chicago Board Options Exchange, Inc. Fees Schedule; 
International Securities Exchange, LLC (``ISE'') Schedule of Fees.
---------------------------------------------------------------------------

    The Exchange believes the proposed rebate for the initiating order 
side of a QCC transaction is reasonable because other competing 
exchanges also provide a rebate on the initiating order side. 
Additionally, the proposed credit amount is within the range of the 
rebate amounts at the other competing exchanges.\12\ The Exchange 
believes the proposed credit is equitable and not unfairly 
discriminatory because it applies to all Members that enter the 
initiating order (except for when both the initiator and contra-side 
orders are Priority Customers) and because it is intended to 
incentivize the sending of more QCC Orders to the Exchange. The 
Exchange believes it is reasonable, equitable and not unfairly 
discriminatory to not provide a rebate for the initiating order for QCC 
transactions for which both the initiator and the contra-side orders 
are Priority Customers since Priority Customers are already 
incentivized by a reduced fee for submitting QCC Orders. The Exchange 
believes that the proposed exclusion of QCC Orders from the Market 
Maker Sliding Scale and the Priority Customer Rebate Program is 
reasonable because it enables QCC Orders from all market participants 
to be subject to only the specific transaction fees as described above 
that are tailored specifically for encouraging market participants to 
transact QCC Orders on the Exchange. The Exchange believes that the 
exclusion is equitable and not unfairly discriminatory because it 
ensures all market participants, other than Priority Customers, to be 
subject to the same transaction fee for QCC Orders. While Priority 
Customers will benefit

[[Page 47982]]

from a lower transaction fee rate for QCC Orders, excluding QCC Orders 
from the Priority Customer Rebate Program enables a more equitable and 
not unfairly discriminatory outcome.
---------------------------------------------------------------------------

    \12\ See id.
---------------------------------------------------------------------------

    The Exchange further believes that not assessing a Marketing Fee 
for contracts executed as a QCC, and not assessing the additional 
Posted Liquidity Marketing Fee to Market Makers for contracts executed 
as a QCC Order is equitable and not unfairly discriminatory because 
such order types are originated from the same Member organization, thus 
obviating the purpose of the Marketing Fees. Finally, the Exchange 
believes that the proposed change to the Fee Schedule specifying that 
QCC orders comprised of mini-contracts will be assessed QCC fees and 
afforded rebates equal to 10% of the fees and rebates applicable to QCC 
Orders comprised of standard option contracts is equitable and not 
unfairly discriminatory because it clearly and transparently describes 
the fees applicable to QCC Orders involving mini-contracts for all MIAX 
participants.

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, because the proposed rule 
change applies to all Members. The Exchange believes this proposal will 
not cause an unnecessary burden on intermarket competition because the 
proposed changes will actually enhance the competiveness of the 
Exchange relative to other exchanges which offer comparable fees and 
rebates for QCC transactions. To the extent that the proposed changes 
make the Exchange a more attractive marketplace for market participants 
at other exchanges, such market participants are welcome to become 
market participants 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.\13\ 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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-2015-49 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MIAX-2015-49. 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 office 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-2015-49, and should be 
submitted on or before August 31, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-19540 Filed 8-7-15; 8:45 am]
 BILLING CODE 8011-01-P


