
[Federal Register Volume 81, Number 177 (Tuesday, September 13, 2016)]
[Notices]
[Pages 62942-62944]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21913]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78781; File No. SR-MIAX-2016-30]


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

September 7, 2016.
    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 August 25, 2016, 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 ``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 is proposing to modify the current list of options for 
which the Exchange assesses the $0.12 per contract Posted Liquidity 
Marketing Fee (described below), which applies to options overlying 
DIA, EEM, FB, GDX, GLD, IWM, QQQ, SLV, SPY, USO, UVXY, and VXX (the 
``designated symbols''), as listed in the Fee Schedule. The Exchange is 
also proposing to modify the current list of designated symbols for 
which the Exchange assesses the $0.50 per contract transaction fee 
applicable to orders executed for the account of non-MIAX market makers 
in options overlying the designated symbols, and the discounted $0.48 
per contract transaction fee with respect to the designated symbols 
applicable to any Member or its Affiliate that qualifies for Priority 
Customer Rebate Program volume tiers 3 or higher, as discussed below. 
The Exchange proposes to remove some of the current designated symbols 
from both the Posted Liquidity Marketing Fee and the non-MIAX market 
maker transaction fees beginning with transactions occurring on or 
after the proposed September 1, 2016 effective date of this proposed 
rule change, and to continue to assess the Posted Liquidity Marketing 
Fee and the non-MIAX market maker transaction fees for the remaining 
symbols for transactions occurring on or after September 1, 2016 and 
extending through October 31, 2016.\3\
---------------------------------------------------------------------------

    \3\ The Commission notes that in August 2016, the Exchange 
expanded the Posted Liquidity Marketing Fee to include 7 additional 
symbols. See File No. SR-MIAX-2016-22 (withdrawn) and Securities 
Exchange Act Release No. 78681 (August 25, 2016), 81 FR 60077 
(August 31, 2016) (SR-MIAX-2016-28). In the present filing, MIAX has 
removed those seven additional symbols effective September 1, 2016. 
Further, the Exchange has proposed to remove the five original 
symbols after October 31, 2016, which will result in no symbols 
being subject to the additional $0.12 per contract Posted Liquidity 
Marketing Fee. With this change, the Commission notes that net 
transaction fees for removing liquidity on MIAX that are assessed on 
market makers (i.e., the transaction fee together with the marketing 
fee and Posted Liquidity Marketing Fee) will no longer exceed $0.50 
per contract in classes in the Penny Pilot Program.
---------------------------------------------------------------------------

Posted Liquidity Marketing Fee
    Marketing Fees are currently assessed on certain transactions of 
all MIAX Market Makers.\4\ Currently, Section (1)(b) of the Fee 
Schedule provides that the Exchange will assess 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. MIAX does not assess a Marketing Fee to Market 
Makers for contracts executed as a PRIME Agency Order, Contra-side 
Order, Qualified Contingent Cross Order, PRIME Participating Quote or 
Order, or a PRIME AOC Response in the PRIME Auction, unless it executes 
against an unrelated order.
---------------------------------------------------------------------------

    \4\ See MIAX Fee Schedule, Section (1)(b), entitled ``Marketing 
Fee'' for more detail regarding the Marketing Fee.
---------------------------------------------------------------------------

    The Exchange assesses an additional $0.12 per contract Posted 
Liquidity Marketing Fee to all Market Makers for any standard options 
overlying the designated symbols 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.\5\ The Posted Liquidity Marketing Fee is 
assessed in addition to the current Marketing Fee of $0.25 per contract 
for standard options overlying the designated symbols that Market 
Makers execute in their assigned class when the contra-party to the 
execution is a Priority Customer.\6\
---------------------------------------------------------------------------

    \5\ For a complete description of the Posted Liquidity Marketing 
Fee, see Securities Exchange Act Release No. 73848 (December 16, 
2014), 79 FR 76421 (December 22, 2014) (SR-MIAX-2014-62).
    \6\ See id.

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

[[Page 62943]]

    The Exchange is proposing to remove options overlying DIA, FB, GDX, 
SLV, USO, UVXY, and VXX from the current Posted Liquidity Marketing 
Fee. For transactions that occur on or after September 1, 2016 and 
extending through October 31, 2016, MIAX will continue to assess the 
Posted Liquidity Marketing Fee for transactions in options overlying 
EEM, GLD, IWM, QQQ, and SPY.
    The Exchange is also proposing to remove options overlying DIA, FB, 
GDX, SLV, USO, UVXY, and VXX from the list of symbols for which the 
Exchange assesses a $0.50 per contract transaction fee that currently 
applies to options overlying the designated symbols executed by non-
MIAX market makers, as set forth in Section (1)(a)(ii) of the Fee 
Schedule at footnote 8 \7\ The Exchange is proposing to continue to 
assess the $0.50 per contract non-MIAX market maker transaction fee for 
transactions in in options overlying EEM, GLD, IWM, QQQ, and SPY that 
occur on or after September 1, 2016 and extending through October 31, 
2016.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 73850 (December 16, 
2014), 79 FR 76424 (December 22, 2014) (SR-MIAX-2014-63) (adopting 
the Posted Liquidity Marketing Fee and $0.50 per contract non-MIAX 
market maker transaction fee for certain symbols).
---------------------------------------------------------------------------

    Additionally, with respect to contracts executed by non-MIAX market 
makers, the Exchange proposes to modify the list of symbols for which 
the Exchange currently assesses transaction fees to any Member or its 
Affiliate that qualifies for Priority Customer Rebate Program \8\ 
volume tier 3 or higher. Members or Affiliates in Priority Customer 
Rebate Program volume tier 3 or higher are currently assessed a 
discounted transaction fee of $0.45 per contract for standard options 
in all options classes except for options overlying the designated 
symbols, for which Members and their Affiliates are assessed a $0.48 
per contract transaction fee. The Exchange is proposing to remove 
options overlying DIA, FB, GDX, SLV, USO, UVXY, and VXX from the list 
of designated symbols for which the Exchange assesses the $0.48 per 
contract transaction fee. The Exchange is proposing to continue to 
assess the $0.48 per contract transaction fee to Members or Affiliates 
in Priority Customer Rebate Program volume tier 3 or higher for 
transactions in in options overlying EEM, GLD, IWM, QQQ, and SPY that 
occur on or after September 1, 2016 and extending through October 31, 
2016.
---------------------------------------------------------------------------

    \8\ MIAX credits each Member the per contract amount resulting 
from each Priority Customer order transmitted by that Member which 
is executed electronically on the Exchange in all multiply-listed 
option classes (excluding QCC Orders, mini-options, Priority 
Customer-to-Priority Customer Orders, PRIME AOC Responses, PRIME 
Contra-side Orders, PRIME Orders for which both the Agency and 
Contra-side Order are Priority Customers, and executions related to 
contracts that are routed to one or more exchanges in connection 
with the Options Order Protection and Locked/Crossed Market Plan 
referenced in MIAX Rule 1400), provided the Member meets certain 
percentage thresholds in a month as described in the Priority 
Customer Rebate Program table. See Fee Schedule, Section 
(1)(a)(iii).
---------------------------------------------------------------------------

    The current transaction fee of $0.47 per contract for standard 
options, discounted to $0.45 per contract for any Member or its 
Affiliate that qualifies for Priority Customer Rebate Program volume 
tiers 3 or higher (and $0.045 per contract for mini options) \9\ 
assessed to non-MIAX market makers will apply to options overlying 
symbols that are deleted from the designated symbols. The proposed rule 
change is scheduled to become effective September 1, 2016.
---------------------------------------------------------------------------

    \9\ See Fee Schedule Section (1)(a)(ii).
---------------------------------------------------------------------------

2. Statutory Basis
    MIAX believes that its proposed rule change is consistent with 
Section 6(b) of the Act \10\ in general, and in particular, furthers 
the objectives of Section 6(b)(4) of the Act,\11\ in that it is an 
equitable allocation of reasonable dues, fees, and other charges among 
its Members and other persons using its facilities, and 6(b)(5) of the 
Act,\12\ in that it is designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanisms of a free and open market and a national market 
system and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 15 U.S.C. 78f(b)(1) and (b)(5).
---------------------------------------------------------------------------

    The proposed modification of the Posted Liquidity Marketing Fee is 
fair, equitable, and not unreasonably discriminatory because it will 
apply equally to all Market Makers that execute against Priority 
Customer orders in options overlying the current designated symbols 
that are resting on the Exchange's Book. All similarly situated Market 
Makers that execute against Priority Customer orders in options 
overlying the current designated symbols that are resting on the 
Exchange's Book are subject to the same marketing fees, and access to 
the Exchange is offered on terms that are not unfairly discriminatory.
    Further, the Exchange's proposed modification of the list of 
symbols for which the Exchange assesses the $0.50 per contract 
transaction fee for non-MIAX market makers in options overlying the 
current designated symbols, and the $0.48 per contract transaction fee 
for Members or Affiliates in Priority Customer Rebate Program volume 
tier 3 or higher for options overlying the current designated symbols, 
is reasonable because the fees and the modification of the list of 
symbols will apply equally to all non-MIAX market makers submitting 
orders to the Exchange.

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

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is 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 to the 
Exchange. The Exchange believes that the proposed rule change reflects 
this competitive environment because it applies equally to all 
similarly situated MIAX participants.

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\ and Rule 19b-4(f)(2) \14\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 17 CFR 240.19b-4(f)(2).

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

[[Page 62944]]

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-2016-30 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-2016-30. 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-2016-30, and should be 
submitted on or before October 4, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-21913 Filed 9-12-16; 8:45 am]
BILLING CODE 8011-01-P


