
[Federal Register Volume 82, Number 148 (Thursday, August 3, 2017)]
[Notices]
[Pages 36172-36176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16296]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81252; File No. SR-MIAX-2017-36]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Adopt a New Type of MIAX Express Interface Port 
Known as a Purge Port, To Amend MIAX Options Rule 519C, Mass 
Cancellation of Trading Interest, To Adopt a New Purge Message, and To 
Amend Its Fee Schedule To Adopt Fees for Purge Ports

July 28, 2017.
    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 24, 2017, Miami International Securities 
Exchange, LLC (``MIAX Options'' 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.
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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 Rule 519C, Mass 
Cancellation of Trading Interest, to adopt new rule text to reflect the 
proposed Purge Port functionality, as well as to make clarifying 
changes to existing rule text to more accurately describe current 
functionality, and to reorganize the rule for ease of reference. The 
Exchange is also proposing to amend its Fee Schedule to adopt fees for 
Purge Ports.
    The text of the proposed changes to Exchange Rule 519C is attached 
as Exhibit 5A. The proposed changes to the Fee Schedule are attached as 
Exhibit 5B. The text of the proposed rule change is available on the 
Exchange's Web site at http://www.miaxoptions.com/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 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 offer Market Makers \3\ that connect to 
the Exchange using the MIAX Express Interface (``MEI'') \4\ a new type 
of connection port, named Purge Ports, to be used as dedicated ports 
for sending purge messages to the Exchange. The Exchange also proposes 
to amend its Fee Schedule to identify and adopt fees for Purge Ports. 
Finally, the Exchange proposes to amend Exchange Rule 519C, Mass 
Cancellation of Trading Interest, to adopt new rule text to reflect the 
proposed Purge Port functionality, as well as to make clarifying 
changes to existing rule text to more accurately describe current 
functionality, and to reorganize the rule for ease of reference.
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    \3\ The term ``Market Makers'' refers to ``Lead Market Makers'', 
``Primary Lead Market Makers'' and ``Registered Market Makers'' 
collectively. See Exchange Rule 100.
    \4\ MIAX Express Interface is a connection to MIAX systems that 
enables Market Makers to submit simple and complex electronic quotes 
to MIAX. See MIAX Options Fee Schedule, Section 5)d)ii), footnote 
26.
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    Market Makers connect to the Exchange's System \5\ via their 
assigned MEI ports. Currently, the Exchange offers Market Makers two 
different types of MEI port connections. The first is a Full Service 
Port \6\ which supports all message types, and the other is a Limited 
Service Port \7\ which provides slightly less functionality. The 
Exchange limits Market Makers to two (2) Full

[[Page 36173]]

Service Ports and allows up to eight (8) Limited Service Ports per MIAX 
matching engine.\8\
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    \5\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
    \6\ 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 
MIAX Options Fee Schedule, Section 5)d)ii), footnote 27.
    \7\ Limited Service MEI Ports provide Market Makers with the 
ability to send simple and complex eQuotes and quote purge messages 
only, but not Market Maker Quotes, to the MIAX System. Limited 
Service MEI Ports are also capable of receiving administrative 
information. Market Makers initially receive two Limited Service MEI 
Ports per matching engine. See MIAX Options Exchange Fee Schedule, 
Section 5)d)ii), footnote 28.
    \8\ A ``matching engine'' is a part of the MIAX electronic 
system that processes options quotes and trades on a symbol-by-
symbol basis. Some matching engines will process option classes with 
multiple root symbols, and other matching engines will be dedicated 
to one single option root symbol (for example, options on SPY will 
be processed by one single matching engine that is dedicated only to 
SPY). A particular root symbol may only be assigned to a single 
designated matching engine. A particular root symbol may not be 
assigned to multiple matching engines. See MIAX Options Exchange Fee 
Schedule, Section 5)d)ii), footnote 29.
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    The proposed Purge Ports are a new, optional, third type of MEI 
port dedicated solely to handling purge messages which would enable a 
Market Maker, by MPID, to remove all or a subset of its (i) quotations 
\9\ in the System and block all or a subset of new inbound quotations 
from being received;\10\ or (ii) Standard quotations \11\ in the System 
and block all or a subset of new inbound Standard quotations from being 
received.\12\ Sending a purge message pursuant to (ii) above will not 
remove or block eQuotes,\13\ which are a specific type of quotation 
that allows the Market Maker to continue to provide targeted liquidity 
to the market and to interact with Public Customer \14\ orders. When 
quotes have been purged pursuant to (i) or (ii) above,\15\ the block 
will remain in effect until the Market Maker requests that the Exchange 
remove the block.
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    \9\ The term ``quote'' or ``quotation'' means a bid or offer 
entered by a Market Maker that is firm and may update the Market 
Maker's previous quote, if any. The Rules of the Exchange provide 
for the use of different types of quotes, including Standard quotes 
and eQuotes, as more fully described in Rule 517. A Market Maker 
may, at times, choose to have multiple types of quotes active in an 
individual option. See Exchange Rule 100.
    \10\ A Market Maker currently has the ability to send a purge 
message to remove all or a subset of its quotations and block all or 
a subset of its new inbound quotations via its MEI port or by 
request to the Exchange's Help Desk. That ability is not changing 
with this proposal. What is changing with this proposal is the 
ability of a Market Maker to send that purge message via the 
proposed Purge Ports.
    \11\ A Standard quote is a quote submitted by a Market Maker 
that cancels and replaces the Market Maker's previous Standard 
quote, if any. See Exchange Rule 517(a)(1).
    \12\ The Exchange is introducing a new purge message that will 
remove all or a subset of a Market Maker's Standard quotations and 
block all or a subset of its new inbound Standard quotations. This 
request may only be sent electronically via a Market Maker's 
existing MEI port, or via the new proposed Purge Ports.
    \13\ An eQuote is a quote with a specific time in force that 
does not automatically cancel and replace a previous Standard quote 
or eQuote. An eQuote can be cancelled by the Market Maker at any 
time, or can be replaced by another eQuote that contains specific 
instructions to cancel an existing eQuote. See Exchange Rule 
517(a)(2).
    \14\ The term ``Public Customer'' means a person that is not a 
broker or dealer in securities. See Exchange Rule 100.
    \15\ The Exchange notes that there is no mass cancellation 
functionality available to remove eQuotes only and block new inbound 
eQuotes.
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    The purge messages described above may be sent via any type of MEI 
port, however, purge messages received on the proposed Purge Ports will 
be handled by the System in a way that ensures minimum possible latency 
(as Purge Ports solely process purge messages, as opposed to Full 
Service MEI Ports and Limited Service MEI Ports, which also process 
additional message types), thereby providing Market Makers with a 
faster, more efficient means to have their quotes removed from the 
System, which will provide Market Makers with an enhanced level of risk 
protection.
    The proposed Purge Ports are designed to assist Market Makers in 
the management of, and risk control over, their quotes, particularly if 
the Market Maker is quoting a large number of options. For example, if 
a Market Maker detects market indications that may influence the 
direction or bias of its quotes, the Market Maker may use the proposed 
Purge Ports to reduce uncertainty and to manage risk by purging all 
quotes in a number of options seamlessly to avoid unintended 
executions, while continuing to evaluate the direction of the market.
    The Exchange also proposes to amend Section (5)(d)(ii) of its Fee 
Schedule to identify and adopt fees for Purge Ports. The Exchange 
currently assesses monthly MEI Port fees on Market Makers based upon 
the number of matching engines used by the Market Maker. Market Makers 
are allocated two (2) Full Service MEI Ports and two (2) Limited 
Service MEI Ports per matching engine to which they connect.
    The Exchange currently assesses the following MEI Port fees: (i) 
$5,000 for Market Maker Assignments in up to 5 option classes or up to 
10% of option classes by volume; (ii) $10,000 for Market Maker 
Assignments in up to 10 option classes or up to 20% of option classes 
by volume; (iii) $14,000 for Market Maker Assignments in up to 40 
option classes or up to 35% of option classes by volume; (iv) $17,500 
for Market Maker Assignments in up to 100 option classes or up to 50% 
of option classes by volume; and (v) $20,500 for Market Maker 
Assignments in over 100 option classes or over 50% of option classes by 
volume up to all option classes listed on MIAX.\16\
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    \16\ See MIAX Fee Schedule, Section (5)(d)(ii).
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    The Exchange also currently charges $100 per month for each 
additional Limited Service MEI Port per matching engine for Market 
Makers over and above the two (2) Limited Service MEI Ports per 
matching engine that are allocated with the Full Service MEI Ports.\17\ 
Market Makers are limited to six (6) additional Limited Service MEI 
Ports per matching engine, for a total of eight (8) per matching 
engine.\18\ The Full Service MEI Ports, Limited Service MEI Ports and 
the additional Limited Service MEI Ports all include access to the 
Exchange's primary and secondary data centers and its disaster recovery 
center.\19\
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    \17\ Id.
    \18\ See MIAX Fee Schedule, footnote 30.
    \19\ See MIAX Fee Schedule, Section (5)(d)(ii).
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    With the introduction of Purge Ports, the Exchange proposes to 
amend Section (5)(d)(ii) of its Fee Schedule to provide that a Market 
Maker may request and be allocated two (2) Purge Ports per matching 
engine to which it connects via a Full Service MEI Port. (That is, a 
Market Maker must have a Full Service MEI Port connection to a matching 
engine in order to be eligible to receive Purge Ports with respect to 
that matching engine.) The Exchange proposes that, for each month in 
which the Market Maker has been credentialed to use Purge Ports in the 
production environment and has been assigned to quote in at least one 
class, the Exchange will assess the Market Maker a flat fee of $1,500 
per month, regardless of the number of actual Purge Ports allocated to 
the Market Maker. For example, a Market Maker (that requests Purge 
Ports) that connects to 10 matching engines would be allocated 20 Purge 
Ports, and would be charged $1,500 per month for use of those Purge 
Ports. A Market Maker (that requests Purge Ports) that connects to two 
(2) matching engines would be allocated four (4) Purge Ports, and would 
be charged $1,500 per month for use of those Purge Ports. The Exchange 
believes that charging Market Makers a flat monthly fee for use of the 
Purge Port service (regardless of the number of matching engines to 
which it connects and consequently regardless of the number of Purge 
Ports allocated to the Market Maker) is equitable, reasonable, and 
competitive with the fees charged by other exchanges that offer 
comparable purge port services, as most such exchanges charge per port, 
which results in monthly fees for purge port usage that are 
significantly higher than $1,500 per month for users with multiple 
purge ports.\20\
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    \20\ See Bats BXZ Options Exchange Fee Schedule, Options Logical 
Port Fees. Bats BZX assesses its members $750 per month per purge 
port. See also Nasdaq GEMX Schedule of Fees, Section IV.E. Nasdaq 
GEMX assesses its members $1,250 per SQF Purge Port per month, 
subject to a monthly cap of $12,500 for SQF Purge Ports and SQF 
Ports, applicable to market makers.

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[[Page 36174]]

    The Exchange also proposes to amend Exchange Rule 519C, Mass 
Cancellation of Trading Interest, to clarify current functionality. 
Specifically, the Exchange proposes to amend 519C(a) which reads, ``[a] 
Member \21\ may remove all of its quotations and/or cancel all or any 
subset of its orders . . . .'' Accordingly, the Exchange is deleting 
the reference to quotations from this subsection (a) as quotations will 
now be addressed in subsection (b)(2). The Exchange proposes to amend 
the sentence to read, ``[a] Member may remove all or a subset of its 
orders . . . .'' The Exchange believes that, although there is no 
change to existing functionality addressed by subsection (a) of the 
rule, the proposed changes to subsection (a) provide greater clarity 
regarding the Exchange's risk protection functionality as it relates to 
the handling of orders. Additionally, the Exchange proposes to amend 
the rule to change the phrase, ``any subset'' to ``a subset'' to be 
consistent with proposed changes to section (b) of the Rule as 
described below.
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    \21\ 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.
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    The Exchange also proposes to amend Exchange Rule 519C(b) to 
reorganize the rule for ease of reference and to reflect the proposed 
Purge Port functionality. Specifically, the Exchange proposes to 
replace existing rule text pertaining to the removal of quotations and 
the cancellation of orders with a separate subsection for orders, 
proposed new subsection (b)(1); and a separate subsection for 
quotations, proposed new subsection (b)(2). The Exchange proposes to 
adopt new rule text under subsection (b)(1) to describe current 
functionality pertaining to orders which states, ``[a]n EEM may request 
that the Exchange cancel all or a subset of its orders in the System 
and block all new inbound orders.'' Under this proposal there is no 
change to the functionality available for Electronic Exchange Members 
(``EEMs'').\22\ The Exchange believes that separately describing 
functionality available for EEMs and Market Makers provides greater 
clarity and specificity in the Exchange's rule.
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    \22\ The term ``Electronic Exchange Member'' 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.
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    Additionally, the Exchange proposes to adopt new rule text under 
subsection (b)(2) pertaining to quotations that provides that a Market 
Maker may remove all or a subset of its quotations and block all or a 
subset of its new inbound quotations by firm name or MPID.\23\ This 
functionality currently exists on the Exchange and is not new, as a 
Market Maker may contact Exchange staff to have this action performed 
on their behalf or may submit a request to the Exchange's System via 
its MEI port. However, what is now being proposed pursuant to this 
filing is that this request may also be sent electronically to the 
Exchange's System via the new proposed Purge Ports.
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    \23\ The term ``MPID'' means Market Participant Identifier. See 
Exchange Rule 519C.
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    The Exchange also proposes to adopt new rule text for new 
functionality being introduced in this proposal which provides that a 
Market Maker may remove all or a subset of its Standard quotations and 
block all or a subset of its new inbound Standard quotations by MPID. A 
Market Maker's eQuotes that are in the System will remain and the 
Market Maker will retain the ability to continue to send eQuotes to the 
System. This request may only be submitted to the Exchange's System 
electronically via the Market Maker's MEI port, either via its existing 
MEI ports, or via the new, proposed Purge Ports.
    Lastly, the Exchange proposes to amend the rule text which 
currently states that, ``[t]he block will remain in effect until the 
Member requests Exchange staff to remove the block,'' by removing the 
word ``staff.'' To remove a block a Member may (i) send an electronic 
message directly into the Exchange's System; or (ii) contact Exchange 
staff. Additionally, a Market Maker may make a request to Exchange 
staff to remove quotations or may send a message directly to the 
Exchange's System via its MEI connection. The Exchange believes 
removing the word staff from the rule text more accurately encompasses 
the activity under both scenarios.
    The Exchange notes that this proposal does not preclude Members 
from using the existing purge messages provided by either the MEI 
protocol or the cancel messages provided by the FIX protocol. Under the 
MEI protocol, Market Makers may request that all quotations for all 
underlyings, or for a specific underlying, be removed, and that new 
inbound quotations for all underlyings, or specific underlyings, be 
blocked. Under the FIX protocol, EEMs may also request that all, or a 
subset, of orders for an MPID, or all Day or GTC orders for an MPID, on 
the requesting session, be canceled.
    The Exchange will announce the implementation date of the proposed 
rule change by Regulatory Circular to be published no later than 60 
days following the operative date of the proposed rule. The 
implementation date will be no later than 60 days following the 
issuance of the Regulatory Circular. The Exchange currently anticipates 
implementing the proposed rule change on August 3, 2017, subject to 
announcement of the actual date via Regulatory Circular.
2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \24\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \25\ in particular, 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 regulating, 
clearing, settling, processing information with respect to, and 
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.
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    \24\ 15 U.S.C. 78f(b).
    \25\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Act,\26\ in that it promotes just and 
equitable principles of trade and removes impediments to and perfects 
the mechanism of a free and open market. Offering Market Makers 
designated Purge Ports would enhance their ability to manage quotes, 
quote traffic, and their quoting obligations,\27\ which would, in turn, 
improve their risk controls to the benefit of all market participants. 
The Exchange believes that Purge Ports would foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities because designating Purge Ports for purges only may 
encourage better use of dedicated ports. This may, concurrent with the 
ports that carry quotes and other information necessary for market 
making activities, enable more efficient, as well as fair and 
reasonable, use of Market Makers' resources. As Purge Ports are only 
available for purging and not for activities such as order or quote 
entry, the Purge Ports are not designed to permit unfair discrimination 
but rather are designed to enable Market Makers to manage their quoting 
risk and meet their heightened quoting obligations that other market

[[Page 36175]]

participants are not subject to, which, in turn, benefits all market 
participants. The Exchange also notes that similar connectivity and 
functionality is offered by other exchanges.\28\
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    \26\ Id.
    \27\ See Exchange Rule 604.
    \28\ See Securities Exchange Act Release Nos. 77613 (April 13, 
2016), 81 FR 23023 (April 19, 2016) (SR-Phlx-2016-45); 79956 
(February 3, 2017), 82 FR 10102 (February 9, 2017) (SR-BatsBZX-2017-
05); and 81095 (July 7, 2017), 82 FR 32409 (July 13, 2017) (SR-ISE-
2017-62).
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    The Exchange notes that the proposed rule change will not relieve 
Market Makers of their continuous quoting obligations under Exchange 
Rule 604 and under Regulation NMS Rule 602.\29\ Specifically, any 
interest that is executable against a Market Maker's quotes that is 
received by the Exchange's matching engine prior to the time that the 
purge message is received by the Exchange's matching engine will 
automatically execute at that price, up to the quote's size. Market 
Makers that purge their quotes will not be relieved of the obligation 
to provide continuous two-sided quotes on a daily basis, nor will it 
prohibit the Exchange from taking disciplinary action against a Market 
Maker for failing to meet its continuous quoting obligation each 
trading day.
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    \29\ 17 CFR 242.602.
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    In addition, the Exchange believes that the proposal removes 
impediments to and perfects the mechanisms of a free and open market 
and a national market system and, in general, protects investors and 
the public interest by providing Market Makers with an additional purge 
message which allows them to remove their Standard quotes and blocks 
new inbound Standard quotes from being received yet preserves their 
ability to continue to provide liquidity to the market and interact 
with Public Customer orders via eQuotes. Further, the Exchange is 
clarifying existing rule text in Rule 519C to better describe current 
functionality available on the Exchange. The Exchange believes that 
clarifying current functionality promotes the protection of investors 
and the public interest by helping market participants better 
understand the risk protection tools available on the Exchange.
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(4) of the Act,\30\ in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
Members and other persons using any facility or system which the 
Exchange operates or controls. The Exchange believes that its proposed 
fees should facilitate the ability of the Exchange to recoup some costs 
associated with Purge Ports as well as provide, maintain, and improve 
Purge Ports. The Exchange operates in a highly competitive market in 
which exchanges offer connectivity services as a means to facilitate 
the trading activities of Members and other participants. Accordingly, 
fees charged for connectivity are constrained by the active competition 
for the order flow of such participants as well as demand for market 
data from the Exchange. If a particular exchange charges excessive fees 
for connectivity, affected Members will opt to terminate their 
connectivity arrangements with that exchange, and adopt a possible 
range of alternative strategies, including routing to the applicable 
exchange through another participant or market center or taking that 
exchange's data indirectly. Accordingly, the exchange charging 
excessive fees would stand to lose not only connectivity revenues but 
also revenues associated with the execution of orders routed to it by 
affected Members, and, to the extent applicable, market data revenues. 
The Exchange believes that this competitive dynamic imposes powerful 
restraints on the ability of any exchange to charge unreasonable fees 
for connectivity. The Exchange also believes the proposed fee for the 
Purge Ports is equitable, reasonable, and competitive with the rates 
charged by competitor exchanges for similar functionality.\31\
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    \30\ 15 U.S.C. 78f(b)(4).
    \31\ See supra note 20.
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    The Exchange also believes that the proposed amendments to its fee 
schedule are non-discriminatory because they will apply uniformly to 
all Market Makers. The proposed Purge Ports are completely voluntary 
and no Market Maker is required or under any regulatory obligation to 
utilize them. All Market Makers that voluntarily request this service 
will be charged the same amount for the same service. All Market Makers 
have the option to select any connectivity option, and there is no 
differentiation among Market Makers with regard to the fees charged for 
the services offered by 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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes the 
proposed rule change will enhance competition because it will enable it 
to offer similar connectivity and functionality as its competitor 
exchanges.\32\ In addition, the proposed Purge Ports are completely 
voluntary and no Market Maker is required or under any regulatory 
obligation to utilize them.
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    \32\ See supra note 28.
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    The Exchange does not believe that allowing one type of Member 
(Market Makers) and not the other (EEMs) to utilize the proposed Purge 
Ports will impose any burden on competition that is not necessary or 
appropriate in furtherance of the Act, given the roles and 
responsibilities required by each type of Member. Market Makers connect 
to the Exchange via MEI while EEMs connect to the Exchange via FIX. 
Market Makers have a heightened obligation on the Exchange to maintain 
a continuous two-sided market, pursuant to Rule 604(e). As such, Market 
Makers have an obligation to provide continuous quotes for a large 
number of series. The volume of quotes that the Market Maker has in the 
market directly correlates to the Market Maker's risk exposure. EEMs, 
by contrast, can only send orders to the Exchange and do not have 
similar obligations. The Exchange believes providing Market Makers with 
an additional risk management tool will enhance competition as this 
tool is already offered by other exchanges.\33\
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    \33\ Id.
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    The Exchange believes its proposed amendments to its Fee Schedule 
would not impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. On the contrary, 
the Exchange believes the proposed rule change will enhance competition 
because it will enable it to offer similar connectivity and 
functionality as its competitor exchanges.\34\ In addition, the 
proposed Purge Ports are completely voluntary and no Market Maker is 
required or under any regulatory obligation to utilize them. The 
Exchange does not believe that the proposed change represents a 
significant departure from previous pricing offered by the Exchange or 
pricing offered by the Exchange's competitors. Additionally, Market 
Makers may opt to disfavor the Exchange's pricing if they believe that 
alternatives offer them better value. Accordingly, the Exchange does 
not believe that the proposed change will impair the ability of Market 
Makers or competing venues to maintain their competitive standing in 
the financial markets.
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    \34\ Id.
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    The Exchange believes that fees for the proposed Purge Ports and 
connectivity, in general, are constrained by the robust competition for 
order flow among exchanges and non-exchange markets. Further, excessive 
fees for

[[Page 36176]]

connectivity, including Purge Port fees, would serve to impair an 
exchange's ability to compete for order flow rather than burdening 
competition. The Exchange also does not believe the proposed rule 
change would impact intramarket competition as it would apply to all 
Members and non-Members equally.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to 19(b)(3)(A) of the Act \35\ and Rule 19b-4(f)(6) 
\36\ thereunder.
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    \35\ 15 U.S.C. 78s(b)(3)(A).
    \36\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) \37\ permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. In its filing with the Commission, 
the Exchange requests that the Commission waive the 30-day operative 
delay. As noted above, the Exchange has proposed to announce an 
implementation date by Regulatory Circular, which the Exchange 
anticipates will be August 3, 2017. The Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest, as it will enable the Exchange to 
allow the enhanced risk protection for Market Makers offered by the 
proposed Purge Ports to go into effect without undue delay. 
Accordingly, the Commission hereby waives the 30-day operative delay 
requirement and designates the proposed rule change operative upon 
filing.\38\
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    \37\ 17 CFR 240.19b-4(f)(6)(iii).
    \38\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-MIAX-2017-36 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-2017-36. 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 the 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-2017-36 and should be 
submitted on or before August 24, 2017.
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    \39\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\39\
Brent J. Fields,
Secretary.
[FR Doc. 2017-16296 Filed 8-2-17; 8:45 am]
BILLING CODE 8011-01-P


