[Federal Register Volume 83, Number 161 (Monday, August 20, 2018)]
[Notices]
[Pages 42178-42183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17849]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83847; File No. SR-MIAX-2018-23]


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

August 14, 2018.
    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 7, 2018, 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, 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 ``Fee Schedule'').
    The text of the proposed rule change is available on the Exchange's 
website at

[[Page 42179]]

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 amend the Fee Schedule to modify certain 
aspects of the following fees that apply to MIAX Options Market Makers: 
\3\ (i) The Monthly Trading Permit fees; and (ii) the MEI Port fees. 
The Exchange also proposes to amend the list of MIAX Select Symbols \4\ 
contained in the Priority Customer Rebate Program \5\ of the Exchange's 
Fee Schedule to delete an obsolete 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\ The term ``MIAX Select Symbols'' means options overlying 
AAL, AAPL, AIG, AMAT, AMD, AMZN, BA, BABA, BB, BIDU, BP, C, CAT, 
CBS, CELG, CLF, CVX, DAL, EBAY, EEM, FB, FCX, GE, GILD, GLD, GM, 
GOOGL, GPRO, HAL, HTZ, INTC, IWM, JCP, JNJ, JPM, KMI, KO, MO, MRK, 
NFLX, NOK, NQ, ORCL, PBR, PFE, PG, QCOM, QQQ, RIG, S, SPY, T, TSLA, 
USO, VALE, VXX, WBA, WFC, WMB, WY, X, XHB, XLE, XLF, XLP, XOM, and 
XOP.
    \5\ See Section 1(a)(iii) of the Fee Schedule for a complete 
description of the Program.
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    The Exchange issues Trading Permits that confer the ability to 
transact on the Exchange.\6\ Currently, the Exchange assesses the 
following monthly fees for MIAX Options Market Maker Trading Permits: 
(i) $7,000 for Market Maker Assignments in up to 10 option classes or 
up to 20% of option classes by volume; (ii) $12,000 for Market Maker 
Assignments in up to 40 option classes or up to 35% of option classes 
by volume; (iii) $17,000 for Market Maker Assignments in up to 100 
option classes or up to 50% of option classes by volume; and (iv) 
$22,000.00 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 Options.\7\ For the calculation of these monthly Trading Permit 
fees, the number of classes is defined as the greatest number of 
classes the Market Maker was assigned to quote in on any given day 
within the calendar month and the class volume percentage is based on 
the total national average daily volume in classes listed on MIAX 
Options in the prior calendar quarter.\8\ Newly listed option classes 
are excluded from the calculation of the monthly Market Maker Trading 
Permit 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.
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    \6\ There is no limit on the number of Trading Permits that may 
be issued by the Exchange; however, the Exchange has the authority 
to limit or decrease the number of Trading Permits it has determined 
to issue provided it complies with the provisions set forth in Rule 
200(a) and Section 6(c)(4) of the Exchange Act. See 15 U.S.C. 
78(f)(c)(4). For a complete description of MIAX Options Trading 
Permits, see MIAX Rule 200.
    \7\ See the Fee Schedule, Section 3(b).
    \8\ The Exchange will use the following formula to calculate the 
percentage of total national average daily volume that the Market 
Maker assignment is for purposes of the Market Maker trading permit 
fee for a given month:
    Market Maker assignment percentage of national average daily 
volume = [total volume during the prior calendar quarter in a class 
in which the Market Maker was assigned]/[total national volume in 
classes listed on MIAX Options in the prior calendar quarter].
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    The Exchange assesses Market Makers the monthly Trading Permit fee 
based on the greatest number of classes listed on MIAX Options that the 
Market Maker was assigned to quote 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. Members receiving Trading Permits during the month will be 
assessed Trading Permit fees according to this schedule, except that 
the calculation of the Trading Permit fee for the first month in which 
the Trading Permit is issued will be pro-rated based on the number of 
trading days occurring after the date on which the Trading Permit was 
in effect during that first month divided by the total number of 
trading days in such month multiplied by the monthly rate.
    The Exchange recently modified the Trading Permit fees to provide 
lower fees to Market Makers that execute less volume than a certain 
volume threshold in certain Trading Permit Tier levels.\9\ In 
particular, for Market Makers that fall within the following Trading 
Permit fee levels, which represent the 3rd or 4th levels of the fee 
table: (i) Market Maker Assignments in up to 100 option classes or up 
to 50% of option classes by volume, or (ii) Market Maker Assignments in 
over 100 option classes or over 50% of option classes by volume up to 
all option classes listed on MIAX Options; and whose total monthly 
Market Maker executed volume during the relevant month is less than 
0.075% of the total monthly executed volume reported by OCC in the 
market maker account type for MIAX-listed option classes for that 
month, the Exchange assesses a Trading Permit fee of $15,500 instead of 
the fee otherwise applicable to such level.\10\
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    \9\ See Securities Exchange Act Release No. 82868 (March 13, 
2018), 83 FR 12063 (March 19, 2018) (SR-MIAX-2018-08).
    \10\ For example, if Market Maker 1 elects to quote the top 40 
option classes which consist of 58% of the total national average 
daily volume in the prior calendar quarter, the Exchange would 
assess $12,000 to Market Maker 1 for the month which is the lesser 
of `up to 40 classes' and `over 50% of classes by volume up to all 
classes listed on MIAX.' If Market Maker 2 elects to quote the 
bottom 1000 option classes which consist of 10% of the total 
national average daily volume in the prior quarter, the Exchange 
would assess $7,000 to Market Maker 2 for the month which is the 
lesser of `over 100 classes' and `up to 20% of classes by volume.'
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    The Exchange now proposes to further modify its Trading Permit fees 
by lowering the monthly Market Maker executed volume threshold 
requirement from less than 0.075% to less than 0.060% of total monthly 
executed volume reported by OCC in the Market Maker account type for 
MIAX-listed option classes for that month, and which fall within the 
3rd or 4th levels of the fee table. Accordingly, the Exchange proposes 
for these Monthly 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. This is a proposed change to the Trading 
Permit fees for Market Makers that fall within the 3rd or 4th levels of 
the fee table.
    The proposed adjustment to the threshold is based on an assessment 
of recent Market Maker volume trends on the Exchange. Specifically, the 
Exchange determined that, due to lower total monthly executed volume 
executed by certain larger-scale Market Makers, certain larger-scale 
Market Markers could potentially receive the lower fees, which lower 
fees were intended only to apply to smaller-scale Market Makers. 
Therefore, the Exchange

[[Page 42180]]

believes that it is reasonable, equitable, and not unfairly 
discriminatory to adjust the monthly Market Maker executed volume 
threshold requirement from less than 0.075% to less than 0.060% of 
total monthly executed volume reported by OCC in the Market Maker 
account type for MIAX-listed option classes for that month, so that 
such lower fees will continue to apply to only smaller-scale Market 
Makers. The Exchange believes that by continuing to offer lower fees to 
Market Makers that execute less volume than a certain volume threshold 
in certain Trading Permit Tier levels, the Exchange will retain and 
attract smaller-scale Market Makers, which are an integral component of 
the option industry marketplace, but have been decreasing in number in 
recent years, due to industry consolidation and lower market maker 
profitability. Since these smaller-scale Market Makers execute less 
volume overall, the Exchange believes it is reasonable and appropriate 
to offer such Market Makers (that are willing to quote the majority or 
entirety of the market) lower fees.
    Similarly, the Exchange also proposes to modify its MEI Port fees 
assessable to Market Makers. Currently, MIAX Options assesses monthly 
MEI Port fees on Market Makers based upon the number of classes or 
class volume accessed by the Market Maker. Market Makers are allocated 
two (2) Full Service MEI Ports \11\ and two (2) Limited Service MEI 
Ports per matching engine \12\ to which they connect. The Exchange 
currently assesses the following MEI Port fees: (a) $5,000 for Market 
Maker Assignments in up to 5 option classes or up to 10% of option 
classes by volume; (b) $10,000 for Market Maker Assignments in up to 10 
option classes or up to 20% of option classes by volume; (c) $14,000 
for Market Maker Assignments in up to 40 option classes or up to 35% of 
option classes by volume; (d) $17,500 for Market Maker Assignments in 
up to 100 option classes or up to 50% of option classes by volume; and 
(e) $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 Options.\13\ 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. 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. For the 
calculation of the monthly MEI Port fees that apply to Market Makers, 
the number of classes is defined as the greatest number of classes the 
Market Maker was assigned to quote in on any given day within the 
calendar month and the class volume percentage is based on the total 
national average daily volume in classes listed on MIAX Options in the 
prior calendar quarter.\14\ 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.
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    \11\ Full Service MEI Ports provide Market Makers with the 
ability to send Market Maker quotes, eQuotes, and quote purge 
messages to the MIAX Options 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.
    \12\ A ``matching engine'' is a part of the MIAX Options 
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.
    \13\ See the Fee Schedule, Section 5(d)(ii).
    \14\ The Exchange will use the following formula to calculate 
the percentage of total national average daily volume that the 
Market Maker assignment is for purposes of the MEI Port fee for a 
given month:
    Market Maker assignment percentage of national average daily 
volume = [total volume during the prior calendar quarter in a class 
in which the Market Maker was assigned]/[total national volume in 
classes listed on MIAX Options in the prior calendar quarter].
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    The Exchange assesses Market Makers the monthly MEI Port fees based 
on the greatest number of classes listed on MIAX Options that the 
Market Maker was assigned to quote 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 recently modified the MEI Port fees to provide lower 
fees to Market Makers that execute less volume than a certain volume 
threshold in certain MEI Port fee levels.\15\ In particular, for Market 
Makers that fall within the following MEI Port fee levels, which 
represent the 4th or 5th levels of the fee table: Market Makers that 
have (i) Assignments in up to 100 option classes or up to 50% of option 
classes by volume, or (ii) Assignments in over 100 option classes or 
over 50% of option classes by volume up to all option classes listed on 
MIAX Options; and whose total monthly Market Maker executed volume 
during the relevant month is less than 0.075% of the total monthly 
executed volume reported by OCC in the market maker account type for 
MIAX-listed option classes for that month, the Exchange assesses a fee 
of $14,500 instead of the fee otherwise applicable to such level.\16\
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    \15\ See supra note 9.
    \16\ For example, if Market Maker 1 elects to quote the top 40 
option classes which consist of 58% of the total national average 
daily volume in the prior calendar quarter, the Exchange would 
assess $14,000 to Market Maker 1 for the month which is the lesser 
of `up to 40 classes' and `over 50% of classes by volume up to all 
classes listed on MIAX.' If Market Maker 2 elects to quote the 
bottom 1000 option classes which consist of 10% of the total 
national average daily volume in the prior quarter, the Exchange 
would assess $5,000 to Market Maker 2 for the month which is the 
lesser of `over 100 classes' and `up to 10% of classes by volume.'
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    The Exchange now proposes to further modify its MEI Port fees by 
lowering the monthly volume threshold requirement from less than 0.075% 
to less than 0.060% of total monthly Market Maker executed volume 
reported by OCC in the Market Maker account type for MIAX-listed option 
classes for that month, and which fall within the 4th or 5th levels of 
the fee table. Accordingly, the Exchange proposes for these MEI Port 
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 $14,500 instead of 
the fee otherwise applicable to such level. This is a proposed change 
to the MEI Port fees for Market Makers that fall within the 4th or 5th 
levels of the fee table.
    The proposed adjustment to the threshold is based on an assessment 
of recent Market Maker volume trends on the Exchange. Specifically, the 
Exchange determined that, due to lower total monthly executed volume 
executed by certain larger-scale Market Makers, certain larger-scale 
Market Markers could potentially receive the lower fees, which lower 
fees were intended only to apply to smaller-scale Market Makers. 
Therefore, the Exchange believes that it is reasonable, equitable, and 
not unfairly discriminatory to adjust the monthly Market Maker executed 
volume threshold requirement from less than 0.075% to less than 0.060% 
of total monthly executed volume reported by OCC in the Market Maker 
account type for MIAX-listed option classes for that month, so that 
such lower fees will continue to apply

[[Page 42181]]

to only smaller-scale Market Makers. The Exchange believes that by 
continuing to offer lower fees to Market Makers that execute less 
volume than a certain volume threshold in certain MEI Port fee levels, 
the Exchange will retain and attract smaller-scale Market Makers, which 
are an integral component of the option industry marketplace, but have 
been decreasing in number in recent years, due to industry 
consolidation and lower market maker profitability. Since these 
smaller-scale Market Makers execute less volume overall, the Exchange 
believes it is reasonable and appropriate to offer such Market Makers 
(that are willing to quote the majority or entirety of the market) 
lower fees.
    The Exchange also proposes to amend the list of MIAX Select Symbols 
contained in the Priority Customer Rebate Program of the Exchange's Fee 
Schedule to delete an obsolete reference. Specifically, the Exchange 
proposes to delete the symbol ``NQ'' associated with NQ Mobile Inc. The 
Exchange notes that, as a result of a recent corporate action, NQ 
changed its name, trading symbol, CUSIP, and business model. The 
company is now known as Link Motion Inc. (``LKM'').\17\ The Exchange 
determined not to replace NQ with LKM, for business reasons. Therefore, 
NQ should be removed from the list of MIAX Select Symbols. By removing 
NQ from the list of MIAX Select Symbols, it will help to ensure that 
there is no confusion amongst market participants and will clarify that 
LKM is not a MIAX Select Symbol.
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    \17\ The change became effective on March 14, 2018.
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    The Exchange initially filed the proposal on July 31, 2018 (SR-
MIAX-2018-17). That filing was withdrawn and replaced with the current 
filing (SR-MIAX-2018-23).
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \18\ in general, and 
furthers the objectives of Section 6(b)(4) and 6(b)(5) of the Act \19\ 
in particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among Exchange Members and 
issuers and other persons using any facility or system which the 
Exchange operates or controls. The Exchange also believes the proposal 
furthers the objectives of Section 6(b)(5) of the Act \20\ 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 customer, issuers, brokers and dealers.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(4)(5).
    \20\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed modification to the Trading 
Permit fees is consistent with Section 6(b)(4) of the Act in that it is 
reasonable, equitable and not unfairly discriminatory. The proposed 
modification to the Trading Permit fees is reasonable in that, by 
continuing to offer lower fees to Market Makers that execute less 
volume than a certain volume threshold in certain Trading Permit Tier 
levels, the Exchange will retain and attract smaller-scale Market 
Makers, which are an integral component of the option industry 
marketplace, but have been decreasing in number in recent years, due to 
industry consolidation and lower market maker profitability. Since 
these smaller-scale Market Makers execute less volume overall, the 
Exchange believes it is reasonable and appropriate to offer such Market 
Makers (that are willing to quote the majority or entirety of the 
market) lower fees. The Exchange also believes that its proposal is 
consistent with Section 6(b)(5) of the Act because it will be uniformly 
applied to all Market Makers that execute less volume on the Exchange, 
as determined and measured by a uniform, objective, quantitative volume 
amount. The Exchange notes that the proposed changes to Trading Permit 
fees apply only to the two highest tiers on the Fee Schedule. The 
Exchange believes that this is consistent with Section 6(b)(5) of the 
Act because it will allow for smaller-scale Market Makers, that execute 
less volume overall, to still be incentivized to quote the majority or 
entirety of the market, without paying the higher fees, which would be 
assessed to a Market Maker with a total monthly executed volume during 
the relevant month of greater than the proposed 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. The proposed 
Trading Permit fees are fair and equitable and not unreasonably 
discriminatory because they apply equally to all similarly situated 
Market Makers regardless of type and access to the Exchange is offered 
on terms that are not unfairly discriminatory.
    The Exchange also believes that the proposed modification to the 
Trading Permit fees is reasonable in that it is based on an assessment 
of recent Market Maker volume trends on the Exchange. Specifically, the 
Exchange determined that, due to lower total monthly executed volume 
executed by certain larger-scale Market Makers, certain larger-scale 
Market Markers could potentially receive the lower fees, which lower 
fees were intended only to apply to smaller-scale Market Makers. 
Therefore, the Exchange believes that it is reasonable, equitable, and 
not unfairly discriminatory to adjust the monthly Market Maker executed 
volume threshold requirement from less than 0.075% to less than 0.060% 
of total monthly executed volume reported by OCC in the Market Maker 
account type for MIAX-listed option classes for that month, so that 
such lower fees will continue to apply to only smaller-scale Market 
Makers. The Exchange believes that by continuing to offer lower fees to 
Market Makers that execute less volume than a certain volume threshold 
in certain Trading Permit Tier levels, the Exchange will retain and 
attract smaller-scale Market Makers, which are an integral component of 
the option industry marketplace, but have been decreasing in number in 
recent years, due to industry consolidation and lower market maker 
profitability. Since these smaller-scale Market Makers execute less 
volume overall, the Exchange believes it is reasonable and appropriate 
to offer such Market Makers (that are willing to quote the majority or 
entirety of the market) lower fees.
    The Exchange believes that the proposed modification to the MEI 
Port fees is consistent with Section 6(b)(4) of the Act in that it is 
reasonable, equitable and not unfairly discriminatory. The proposed 
modification to the MEI Port fees is reasonable in that, by continuing 
to offer lower fees to Market Makers that execute less volume than a 
certain volume threshold in certain MEI Port fee levels, the Exchange 
will retain and attract smaller-scale Market Makers, which are an 
integral component of the option industry marketplace, but have been 
decreasing in number in recent years, due to industry consolidation and 
lower market maker profitability. Since these smaller-scale Market 
Makers execute less volume overall, the Exchange believes it is 
reasonable and appropriate to offer such Market Makers (who are willing 
to quote the majority or entirety of the market) lower fees. The 
Exchange also believes that its proposal is consistent with Section 
6(b)(5) of the Act because it will be uniformly applied to all Market 
Makers that execute less volume on the Exchange, as determined and 
measured by a uniform, objective, quantitative volume amount. The 
Exchange notes

[[Page 42182]]

that the proposed changes to MEI Port fees apply only to the two 
highest tiers of the Fee Schedule. The Exchange believes that this is 
consistent with Section 6(b)(5) of the Act because it will allow for 
smaller-scale Market Makers, that execute less volume overall, to still 
be incentivized to quote the majority or entirety of the market, 
without paying the higher fees, which would be assessed to a Market 
Maker with a total monthly executed volume during the relevant month of 
greater than the proposed 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. The proposed MEI Port fees are fair and 
equitable and not unreasonably discriminatory because they apply 
equally to all similarly situated Market Makers regardless of type and 
access to the Exchange is offered on terms that are not unfairly 
discriminatory.
    The Exchange also believes that the proposed modification to the 
MEI Port fees is reasonable in that it is based on an assessment of 
recent Market Maker volume trends on the Exchange. Specifically, the 
Exchange determined that, due to lower total monthly executed volume 
executed by certain larger-scale Market Makers, certain larger-scale 
Market Markers could potentially receive the lower fees, which lower 
fees were intended only to apply to smaller-scale Market Makers. 
Therefore, the Exchange believes that it is reasonable, equitable, and 
not unfairly discriminatory to adjust the monthly Market Maker executed 
volume threshold requirement from less than 0.075% to less than 0.060% 
of total monthly executed volume reported by OCC in the Market Maker 
account type for MIAX-listed option classes for that month, so that 
such lower fees will continue to apply to only smaller-scale Market 
Makers. The Exchange believes that by continuing to offer lower fees to 
Market Makers that execute less volume than a certain volume threshold 
in certain MEI Port fee levels, the Exchange will retain and attract 
smaller-scale Market Makers, which are an integral component of the 
option industry marketplace, but have been decreasing in number in 
recent years, due to industry consolidation and lower market maker 
profitability. Since these smaller-scale Market Makers execute less 
volume overall, the Exchange believes it is reasonable and appropriate 
to offer such Market Makers (that are willing to quote the majority or 
entirety of the market) lower fees.
    Furthermore, the proposal to delete the symbol NQ from the list of 
MIAX Select Symbols contained in the Priority Customer Rebate Program 
is consistent with Section 6(b)(4) of the Act because the proposed 
change will benefit investors by providing them an accurate, up-to-date 
list of MIAX Select Symbols contained in the Priority Customer Rebate 
Program on the Fee Schedule. The Exchange believes that the credit for 
transactions in the select symbols is reasonably designed because it 
continues to incentivize providers of Priority Customer order flow to 
send that Priority Customer order flow to the Exchange in order to 
receive a credit in a manner that enables the Exchange to improve its 
overall competitiveness and strengthen its market quality for all 
market participants. Additionally, the Exchange believes that its 
decision not to list the symbol LKM, which replaced NQ, is reasonably 
designed to increase the competitiveness of the Exchange with other 
options exchange in that the Exchange does not believe the symbol LKM 
should be included as a higher volume symbol in the MAIX Select Symbol 
program. The Exchange also believes that its proposal is consistent 
with Section 6(b)(5) of the Act because it will apply equally to all 
Priority Customer orders in the select symbols. All similarly situated 
Priority Customer orders in the select symbols are subject to the same 
rebate schedule, and access to the Exchange is offered on terms that 
are not unfairly discriminatory. In addition, the Program is equitable 
and not unfairly discriminatory because, while only Priority Customer 
order flow qualifies for the Program, an increase in Priority Customer 
order flow will bring greater volume and liquidity, which benefit all 
market participants by providing more trading opportunities and tighter 
spreads.

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 believes that the 
proposed rule changes will increase both intermarket and intramarket 
competition by continuing to enable smaller-scale Market Makers that 
are willing to quote the entire marketplace (or a substantial amount of 
the entire marketplace) access to the Exchange at a lower fee. By 
continuing to offer lower fees to Market Makers that execute less 
volume than a certain volume threshold at certain fee levels, the 
Exchange believes that it will retain and attract smaller-scale Market 
Makers, which are an integral component of the option industry 
marketplace, but have been decreasing in number in recent years, due to 
industry consolidation and lower market maker profitability. Since 
these smaller-scale Market Makers execute less volume overall, the 
Exchange believes it is reasonable and appropriate to offer such Market 
Makers lower fees. The Exchange also believes that removing the symbol 
NQ from the MIAX Select Symbols and not replacing it with symbol LKM 
will not impose any burden on competition not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes that 
the proposed rule change will increase both intermarket and intramarket 
competition by providing investors an accurate, up-to-date list of MIAX 
Select Symbols contained in the Priority Customer Rebate Program on the 
Fee Schedule and by continuing to provide increased incentives only for 
higher volume symbols that the Exchange believes will increase the 
competitiveness of the Exchange with other options exchange that also 
offer increased incentives to higher volume symbols.
    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 changes reflect 
this competitive environment because they modify the Exchange's fees in 
a manner that continues to encourage market participants to register as 
Market Makers on the Exchange, to provide liquidity and to attract 
order flow. To the extent that this purpose is achieved, all the 
Exchange's market participants should benefit from the improved market 
liquidity.

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,\21\ and Rule 19b-4(f)(2) \22\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission

[[Page 42183]]

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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    \21\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \22\ 17 CFR 240.19b-4(f)(2).
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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 [email protected]. Please include 
File Number SR-MIAX-2018-23 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-2018-23. 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 (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 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 10:00 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-MIAX-2018-23, and should be submitted on 
or before September 10, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2018-17849 Filed 8-17-18; 8:45 am]
 BILLING CODE 8011-01-P


