[Federal Register Volume 85, Number 200 (Thursday, October 15, 2020)]
[Notices]
[Pages 65443-65449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-22869]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90146; File No. SR-MIAX-2020-32]


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

October 9, 2020.
    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act

[[Page 65444]]

of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on September 30, 2020, 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.
---------------------------------------------------------------------------

    \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'') to: (1) Make non-substantive 
reorganizing changes to certain sections of the Fee Schedule; and (2) 
extend the waiver period for certain non-transaction fees applicable to 
Market Makers \3\ that trade solely in Proprietary Products \4\ until 
December 31, 2020.
---------------------------------------------------------------------------

    \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 ``Proprietary Product'' means a class of options 
that is listed exclusively on the Exchange. See Exchange Rule 100.
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
website 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 amend the Fee Schedule to: (1) Make non-
substantive reorganizing changes to certain sections of the Fee 
Schedule; and (2) extend the waiver period for certain non-transaction 
fees applicable to Market Makers that trade solely in Proprietary 
Products until December 31, 2020.
    On October 12, 2018, the Exchange received approval from the 
Commission to list and trade on the Exchange, options on the 
SPIKES[supreg] Index, a new index that measures expected 30-day 
volatility of the SPDR S&P 500 ETF Trust (commonly known and referred 
to by its ticker symbol, ``SPY'').\5\ The Exchange adopted its initial 
SPIKES transaction fees on February 15, 2019 and adopted a new section 
of the Fee Schedule--Section 1)a)xi), SPIKES--for those fees.\6\ 
Options on the SPIKES Index began trading on the Exchange on February 
19, 2019.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 84417 (October 12, 
2018), 83 FR 52865 (October 18, 2018) (SR-MIAX-2018-14) (Order 
Granting Approval of a Proposed Rule Change by Miami International 
Securities Exchange, LLC to List and Trade on the Exchange Options 
on the SPIKES[supreg] Index).
    \6\ See Securities Exchange Release No. 85283 (March 11, 2019), 
84 FR 9567 (March 15, 2019) (SR-MIAX-2019-11). The Exchange 
initially filed the proposal on February 15, 2019 (SR-MIAX-2019-04). 
That filing was withdrawn and replaced with SR-MIAX-2019-11.
---------------------------------------------------------------------------

Fee Schedule Reorganization
    The Exchange now proposes to reorganize several sections of the Fee 
Schedule for purposes of clarity and to avoid potential confusion. 
First, the Exchange proposes to rename Section 1)a), Exchange Fees, to 
now be titled ``Multiply-Listed Options Exchange Fees.'' The purpose of 
this change is to clarify that the fees and rebates listed in this 
section of the Fee Schedule will apply only to multiply-listed options 
transactions, and not transactions in the Exchange's Proprietary 
Products, including SPIKES options.
    Next, the Exchange proposes to move Section 1)a)xi), SPIKES, to now 
be Section 1)b)i). As described above, the Exchange began listing 
SPIKES options on February 19, 2019. The Exchange plans to continue 
adding Proprietary Products and will include all fees and rebates for 
such products in one section of the Fee Schedule in order to clarify 
that the fees and rebates for multiply-listed options are different 
than for the Exchange's Proprietary Products. Accordingly, the Exchange 
proposes to move Section 1)a)xi), SPIKES, to now be Section 1)b)i). In 
connection with this proposed reorganization, the Exchange also plans 
to rename Section 1)b), Marketing Fee, to now be titled ``Proprietary 
Products Exchange Fees.'' Further, the Exchange proposes to move the 
Marketing Fee section (currently Section 1)b)) to now be Section 
1)a)xi). The purpose of this change is to clarify that the Marketing 
Fee applies to all multiply-listed options transactions on the Exchange 
and not to the Exchange's Proprietary Products, including SPIKES 
options. The Exchange does not propose to amend or change any of the 
actual fee or rebate amounts or applicability in the Fee Schedule.
Extend Fee Waiver for Certain Non-Transaction Fees
    On May 31, 2019, the Exchange filed a proposal with the Commission 
to amend the Fee Schedule to waive certain non-transaction fees 
applicable to Market Makers that trade solely in Proprietary Products 
(including options on the SPIKES Index) until September 30, 2019.\7\ In 
particular, the Exchange adopted waivers for Membership Application 
fees, monthly Market Maker Trading Permit fees, Application Programming 
Interface (``API'') Testing and Certification fees for Members, and 
monthly MEI Port fees assessed to Market Makers that trade solely in 
Proprietary Products (including options on SPIKES) until September 30, 
2019.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 86109 (June 14, 
2019), 84 FR 28860 (June 20, 2019) (SR-MIAX-2019-28).
---------------------------------------------------------------------------

    On October 1, 2019, the Exchange filed a proposal with the 
Commission to extend the waiver period for the same non-transaction 
fees applicable to Market Makers that trade solely in Proprietary 
Products (including options on SPIKES) until December 31, 2019.\8\ On 
December 30, 2019, the Exchange filed a proposal with the Commission to 
extend the waiver period for the same non-transaction fees applicable 
to Market Makers that trade solely in Proprietary Products (including 
options on SPIKES) until June 30, 2020.\9\ On June 30, 2020, the 
Exchange filed a proposal with the Commission to extend the waiver 
period for the same non-transaction fees applicable to Market Makers 
that trade solely in Proprietary Products (including options on SPIKES) 
until September 30, 2020.\10\
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 87282 (October 10, 
2019), 84 FR 55658 (October 17, 2019) (SR-MIAX-2019-43).
    \9\ See Securities Exchange Act Release No. 87897 (January 6, 
2020), 85 FR 1346 (January 10, 2020) (SR-MIAX-2019-53).
    \10\ See Securities Exchange Act Release No. 89289 (July 10, 
2020), 85 FR 43279 (July 16, 2020) (SR-MIAX-2020-22).
---------------------------------------------------------------------------

    The Exchange now proposes to extend the waiver period for the same 
non-transaction fees applicable to Market Makers that trade solely in 
Proprietary Products (including options on SPIKES) until December 31, 
2020. In particular, the Exchange proposes to waive

[[Page 65445]]

Membership Application fees, monthly Market Maker Trading Permit fees, 
Member API Testing and Certification fees, and monthly MEI Port fees 
assessed to Market Makers that trade solely in Proprietary Products 
(including options on SPIKES) until December 31, 2020.
Membership Application Fees
    The Exchange currently assesses Membership fees for applications of 
potential Members. The Exchange assesses a one-time Membership 
Application fee on the earlier of (i) the date the applicant is 
certified in the membership system, or (ii) once an application for 
MIAX membership is finally denied. The one-time application fee is 
based upon the applicant's status as either a Market Maker or an 
Electronic Exchange Member (``EEM'').\11\ A Market Maker is assessed a 
one-time Membership Application fee of $3,000.00.
---------------------------------------------------------------------------

    \11\ The term ``Electronic Exchange Member'' or ``EEM'' 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.
---------------------------------------------------------------------------

    The Exchange proposes that the waiver for the one-time Membership 
Application fee of $3,000.00 for Market Makers that trade solely in 
Proprietary Products (including options on SPIKES) will be extended 
from September 30, 2020 until December 31, 2020, which the Exchange 
proposes to state in the Fee Schedule. The purpose of this proposed 
change is to continue to provide an incentive for potential Market 
Makers to submit membership applications, which should result in 
increasing potential liquidity in Proprietary Products, including 
options on SPIKES. Even though the Exchange is proposing to extend the 
waiver of this particular fee for Market Makers who will trade solely 
in Proprietary Products from September 30, 2020 until December 31, 
2020, the overall structure of the fee is outlined in the Fee Schedule 
so that there is general awareness that the Exchange intends to assess 
such a fee after December 31, 2020.
Trading Permit Fees
    The Exchange issues Trading Permits that confer the ability to 
transact on the Exchange. MIAX Trading Permits are issued to Market 
Makers and EEMs. Members receiving Trading Permits during a particular 
calendar month are assessed monthly Trading Permit fees as set forth in 
the Fee Schedule. As it relates to Market Makers, MIAX currently 
assesses a monthly Trading Permit fee in any month the Market Maker is 
certified in the membership system, is credentialed to use one or more 
MIAX Express Interface Ports (``MEI Ports'') \12\ in the production 
environment and is assigned to quote in one or more classes. MIAX 
assesses its Market Makers the monthly Market Maker Trading Permit fee 
based on the greatest number of classes listed on MIAX that the MIAX 
Market Maker was assigned to quote in on any given day within a 
calendar month and the applicable fee rate is the lesser of either the 
per class basis or percentage of total national average daily volume 
measurements. A MIAX Market Maker is assessed a monthly Trading Permit 
Fee according to the following table:
---------------------------------------------------------------------------

    \12\ 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 
Fee Schedule, note 27.

----------------------------------------------------------------------------------------------------------------
                                                         Market maker assignments (the lesser of the applicable
                                         Monthly MIAX                  measurements below) [Omega]
        Type of trading permit          trading permit ---------------------------------------------------------
                                              fee                                   % of national average daily
                                                                Per class                      volume
----------------------------------------------------------------------------------------------------------------
Market Maker (includes RMM, LMM, PLMM)       $7,000.00  Up to 10 Classes.........  Up to 20% of Classes by
                                                                                    volume
                                            $12,000.00  Up to 40 Classes.........  Up to 35% of Classes by
                                                                                    volume
                                          $17,000.00 *  Up to 100 Classes........  Up to 50% of Classes by
                                                                                    volume
                                          $22,000.00 *  Over 100 Classes.........  Over 50% of Classes by volume
                                                                                    up to all Classes listed on
                                                                                    MIAX
----------------------------------------------------------------------------------------------------------------
[Omega] Excludes Proprietary Products.
* For these Monthly MIAX 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.

    MIAX proposes that the waiver for the monthly Trading Permit fee 
for Market Makers that trade solely in Proprietary Products (including 
options on SPIKES) will be extended from September 30, 2020 to December 
31, 2020, which the Exchange proposes to state in the Fee Schedule. The 
purpose of this proposed change is to continue to provide an incentive 
for Market Makers to provide liquidity in Proprietary Products on the 
Exchange, which should result in increasing potential order flow and 
volume in Proprietary Products, including options on SPIKES. Even 
though the Exchange is proposing to extend the waiver of this 
particular fee for Market Makers trading solely in Proprietary Products 
from September 30, 2020 until December 31, 2020, the overall structure 
of the fee is outlined in the Fee Schedule so that there is general 
awareness by potential Members seeking a Trading Permit on the Exchange 
that the Exchange intends to assess such a fee after December 31, 2020.
    The Exchange also proposes that Market Makers who trade Proprietary 
Products (including options on SPIKES) along with multi-listed classes 
will continue to not have Proprietary Products (including SPIKES) 
counted toward those Market Makers' class assignment count or 
percentage of total national average daily volume. This exclusion is 
noted with the symbol ``[Omega]'' following the table that shows the 
monthly Trading Permit Fees currently assessed for Market Makers in 
Section 3)b) of the Fee Schedule.
API Testing and Certification Fee
    The Exchange assesses an API Testing and Certification fee to all 
Members depending upon the type of Member. An API makes it possible for 
Members' software to communicate with MIAX software applications, and 
is subject to Members testing with, and certification by, MIAX. The 
Exchange offers four types of interfaces: (i) The Financial Information 
Exchange Port (``FIX Port'') \13\, which enables the FIX Port user 
(typically an EEM or a Market

[[Page 65446]]

Maker) to submit simple and complex orders electronically to MIAX; (ii) 
the MEI Port, which enables Market Makers to submit simple and complex 
electronic quotes to MIAX; (iii) the Clearing Trade Drop Port (``CTD 
Port'') \14\, which provides real-time trade clearing information to 
the participants to a trade on MIAX and to the participants' respective 
clearing firms; and (iv) the FIX Drop Copy Port (``FXD Port'') \15\, 
which provides a copy of real-time trade execution, correction and 
cancellation information through a FIX Port to any number of FIX Ports 
designated by an EEM to receive such messages.
---------------------------------------------------------------------------

    \13\ A FIX Port is an interface with MIAX systems that enables 
the Port user (typically an Electronic Exchange Member or a Market 
Maker) to submit simple and complex orders electronically to MIAX. 
See Fee Schedule, note 24.
    \14\ Clearing Trade Drop (``CTD'') provides Exchange members 
with real-time clearing trade updates. The updates include the 
Member's clearing trade messages on a low latency, real-time basis. 
The trade messages are routed to a Member's connection containing 
certain information. The information includes, among other things, 
the following: (i) Trade date and time; (ii) symbol information; 
(iii) trade price/size information; (iv) Member type (for example, 
and without limitation, Market Maker, Electronic Exchange Member, 
Broker-Dealer); (v) Exchange Member Participant Identifier 
(``MPID'') for each side of the transaction, including Clearing 
Member MPID; and (vi) strategy specific information for complex 
transactions. CTD Port Fees will be assessed in any month the Member 
is credentialed to use the CTD Port in the production environment. 
See Fee Schedule, Section 5)d)iii.
    \15\ The FIX Drop Copy Port (``FXD'') is a messaging interface 
that will provide a copy of real-time trade execution, trade 
correction and trade cancellation information for simple and complex 
orders to FIX Drop Copy Port users who subscribe to the service. FIX 
Drop Copy Port users are those users who are designated by an EEM to 
receive the information and the information is restricted for use by 
the EEM only. FXD Port Fees will be assessed in any month the Member 
is credentialed to use the FXD Port in the production environment. 
See Fee Schedule, Section 5)d)iv.
---------------------------------------------------------------------------

    API Testing and Certification fees for Market Makers are assessed 
(i) initially per API for CTD and MEI in the month the Market Maker has 
been credentialed to use one or more ports in the production 
environment for the tested API and the Market Maker has been assigned 
to quote in one or more classes, and (ii) each time a Market Maker 
initiates a change to its system that requires testing and 
certification. API Testing and Certification fees will not be assessed 
in situations where the Exchange initiates a mandatory change to the 
Exchange's system that requires testing and certification. The Exchange 
currently assesses a Market Maker an API Testing and Certification fee 
of $2,500.00. The API Testing and Certification fees represent costs 
incurred by the Exchange as it works with each Member for testing and 
certifying that the Member's software systems communicate properly with 
MIAX's interfaces.
    MIAX proposes to extend the waiver of the API Testing and 
Certification fee for Market Makers that trade solely in Proprietary 
Products (including options on SPIKES) from September 30, 2020 until 
December 31, 2020, which the Exchange proposes to state in the Fee 
Schedule. The purpose of this proposed change is to continue to provide 
an incentive for potential Market Makers to develop software 
applications to trade in Proprietary Products, including options on 
SPIKES. Even though the Exchange is proposing to extend the waiver of 
this particular fee for Market Makers who trade solely in Proprietary 
Products from September 30, 2020 until December 31, 2020, the overall 
structure of the fee is outlined in the Fee Schedule so that there is 
general awareness that the Exchange intends to assess such a fee after 
December 31, 2020.
MEI Port Fees
    MIAX provides four (4) Port types, including (i) the FIX Port, 
which enables the FIX Port user (typically an EEM or a Market Maker) to 
submit simple and complex orders electronically to MIAX; (ii) the MEI 
Port, which enables Market Makers to submit simple and complex 
electronic quotes to MIAX; (iii) the CTD Port, which provides real-time 
trade clearing information to the participants to a trade on MIAX and 
to the participants' respective clearing firms; and (iv) the FXD Port, 
which provides a copy of real-time trade execution, correction and 
cancellation information through a FIX Port to any number of FIX Ports 
designated by an EEM to receive such messages.
    MIAX assesses monthly MEI Port Fees to Market Makers in each month 
the Member has been credentialed to use the MEI Port in the production 
environment and has been assigned to quote in at least one class. The 
amount of the monthly MEI Port Fee is based upon the number of classes 
in which the Market Maker was assigned to quote on any given day within 
the calendar month, and upon the class volume percentages set forth in 
the above table. The class volume percentage is based on the total 
national average daily volume in classes listed on MIAX in the prior 
calendar quarter. 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. The Exchange assesses MIAX Market 
Makers the monthly MEI Port Fee based on the greatest number of classes 
listed on MIAX that the MIAX Market Maker was assigned to quote in 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. MIAX assesses MEI Port Fees 
on Market Makers according to the following table:

------------------------------------------------------------------------
                                 Market maker assignments (the lesser of
                                   the applicable measurements below)
                                                 [Omega]
     Monthly MIAX MEI Fees     -----------------------------------------
                                                   % of national average
                                    Per class           daily volume
------------------------------------------------------------------------
$5,000.00.....................  Up to 5 Classes..  Up to 10% of Classes
                                                    by volume
$10,000.00....................  Up to 10 Classes.  Up to 20% of Classes
                                                    by volume
$14,000.00....................  Up to 40 Classes.  Up to 35% of Classes
                                                    by volume
$17,500.00 *..................  Up to 100 Classes  Up to 50% of Classes
                                                    by volume
$20,500.00 *..................  Over 100 Classes.  Over 50% of Classes
                                                    by volume up to all
                                                    Classes listed on
                                                    MIAX
------------------------------------------------------------------------
[Omega] Excludes Proprietary Products.
* For these Monthly MIAX MEI Fees 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.

    MIAX proposes to extend the waiver of the monthly MEI Port Fee for 
Market Makers that trade solely in Proprietary Products (including 
options on SPIKES) from September 30, 2020 until December 31, 2020, 
which the Exchange proposes to state in the Fee Schedule. The purpose 
of this proposal is to continue to provide an incentive to

[[Page 65447]]

Market Makers to connect to MIAX through the MEI Port such that they 
will be able to trade in MIAX Proprietary Products. Even though the 
Exchange is proposing to extend the waiver of this particular fee for 
Market Makers trading solely in Proprietary Products until December 31, 
2020, the overall structure of the fee is outlined in the Fee Schedule 
so that there is general awareness that the Exchange intends to assess 
such a fee after December 31, 2020.
    The Exchange notes that for the purposes of this proposed change, 
other Market Makers who trade MIAX Proprietary Products (including 
options on SPIKES) along with multi-listed classes will continue to not 
have Proprietary Products (including SPIKES) counted toward those 
Market Makers' class assignment count or percentage of total national 
average daily volume. This exclusion is noted by the symbol ``[Omega]'' 
following the table that shows the monthly MEI Port Fees currently 
assessed for Market Makers in Section 5)d)ii) of the Fee Schedule.
    The proposed extension of the fee waivers are targeted at market 
participants, particularly market makers, who are not currently members 
of MIAX, who may be interested in being a Market Maker in Proprietary 
Products on the Exchange. The Exchange estimates that there are fewer 
than ten (10) such market participants that could benefit from the 
extension of these fee waivers. The proposed extension of the fee 
waivers does not apply differently to different sizes of market 
participants, however the fee waivers do only apply to Market Makers 
(and not EEMs).
    Market Makers, unlike other market participants, take on a number 
of obligations, including quoting obligations that other market 
participants do not have. Further, Market Makers have added market 
making and regulatory requirements, which normally do not apply to 
other market participants. For example, Market Makers have obligations 
to maintain continuous markets, engage in a course of dealings 
reasonably calculated to contribute to the maintenance of a fair and 
orderly market, and to not make bids or offers or enter into 
transactions that are inconsistent with a course of dealing. 
Accordingly, the Exchange believes it is reasonable and not unfairly 
discriminatory to continue to offer the fee waivers to Market Makers 
because the Exchange is seeking additional liquidity providers for 
Proprietary Products, in order to enhance liquidity and spreads in 
Proprietary Products, which is traditionally provided by Market Makers, 
as opposed to EEMs.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \16\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \17\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among its members and issuers and other persons using 
its facilities. The Exchange also believes the proposal furthers the 
objectives of Section 6(b)(5) of the Act 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 
customers, issuers, brokers and dealers.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes the proposed changes to reorganize certain 
sections of the Fee Schedule promotes just and equitable principles of 
trade and removes impediments to and perfects the mechanism of a free 
and open market and a national market system because the proposed 
changes make clarifying, non-substantive edits to the Fee Schedule. The 
Exchange believes that these proposed changes will provide greater 
clarity to Members and the public regarding the Exchange's Fee Schedule 
and that it is in the public interest for the Fee Schedule to be 
accurate and concise so as to eliminate the potential for confusion.
    The Exchange believes that the proposal to extend the fee waiver 
period for certain non-transaction fees for Market Makers in 
Proprietary Products is an equitable allocation of reasonable fees 
because the proposal continues to waive non-transaction fees for a 
limited period of time in order to enable the Exchange to improve its 
overall competitiveness and strengthen its market quality for all 
market participants in MIAX's Proprietary Products, including options 
on SPIKES. The Exchange believe the proposed extension of the fee 
waivers is fair and equitable and not unreasonably discriminatory 
because it applies to all market participants not currently registered 
as Market Makers at the Exchange. Any market participant may choose to 
satisfy the additional requirements and obligations of being a Market 
Maker and trade solely in Proprietary Products in order to qualify for 
the fee waivers.
    The Exchange believes that the proposed extension of the fee 
waivers is equitable and not unfairly discriminatory for Market Makers 
as compared to EEMs because Market Makers, unlike other market 
participants, take on a number of obligations, including quoting 
obligations that other market participants do not have. Further, Market 
Makers have added market making and regulatory requirements, which 
normally do not apply to other market participants. For example, Market 
Makers have obligations to maintain continuous markets, engage in a 
course of dealings reasonably calculated to contribute to the 
maintenance of a fair and orderly market, and to not make bids or 
offers or enter into transactions that are inconsistent with a course 
of dealing.
    The Exchange believes it is reasonable and equitable to continue to 
waive the one-time Membership Application Fee, monthly Trading Permit 
Fee, API Testing and Certification Fee, and monthly MEI Port Fee for 
Market Makers that trade solely in Proprietary Products (including 
options on SPIKES) until December 31, 2020, since the waiver of such 
fees provides incentives to interested market participants to trade in 
Proprietary Products. This should result in increasing potential order 
flow and liquidity in MIAX Proprietary Products, including options on 
SPIKES.
    The Exchange believes it is reasonable and equitable to continue to 
waive the API Testing and Certification fee assessable to Market Makers 
that trade solely in Proprietary Products (including options on SPIKES) 
until December 31, 2020, since the waiver of such fees provides 
incentives to interested Members to develop and test their APIs sooner. 
Determining system operability with the Exchange's system will in turn 
provide MIAX with potential order flow and liquidity providers in 
Proprietary Products.
    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory that Market Makers who trade in Proprietary Products 
along with multi-listed classes will continue to not have Proprietary 
Products counted toward those Market Makers' class assignment count or 
percentage of total national average daily volume for monthly Trading 
Permit Fees and monthly MEI Port Fees in order to incentivize existing 
Market Makers who currently trade in multi-listed classes to also trade 
in Proprietary Products,

[[Page 65448]]

without incurring certain additional fees.
    The Exchange believes that the proposed extension of the fee 
waivers constitutes an equitable allocation of reasonable fees and 
other charges among its members and issuers and other persons using its 
facilities. The proposed extension of the fee waivers means that all 
prospective market makers that wish to become Market Maker Members of 
the Exchange and quote solely in Proprietary Products may do so and 
have the above-mentioned fees waived until December 31, 2020. The 
proposed extension of the fee waivers will continue to not apply to 
potential EEMs because the Exchange is seeking to enhance the quality 
of its markets in Proprietary Products through introducing more 
competition among Market Makers in Proprietary Products. In order to 
increase the competition, the Exchange believes that it must continue 
to waive entry type fees for such Market Makers. EEMs do not provide 
the benefit of enhanced liquidity which is provided by Market Makers, 
therefore the Exchange believes it is reasonable and not unfairly 
discriminatory to continue to only offer the proposed fee waivers to 
Market Makers (and not EEMs). Further, the Exchange believes it is 
reasonable and not unfairly discriminatory to continue to exclude 
Proprietary Products from an existing Market Maker's permit fees and 
port fees, in order to incentive such Market Makers to quote in 
Proprietary Products. The amount of a Market Maker's permit and port 
fee is determined by the number of classes quoted and volume of the 
Market Maker. By excluding Proprietary Products from such fees, the 
Exchange is able to incentivize Market Makers to quote in Proprietary 
Products. EEMs do not pay permit and port fees based on the classes 
traded or volume, so the Exchange believes it is reasonable, equitable, 
and not unfairly discriminatory to only offer the exclusion to Market 
Makers (and not EEMs).

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.
Intra-Market Competition
    The Exchange believes that the proposal to reorganize certain 
sections of the Fee Schedule does not impose any burden on intra-market 
competition that is not necessary or appropriate because this proposal 
is not competitive in nature, but rather is designed to remedy minor 
non-substantive issues and provide added clarity to the Fee Schedule in 
order to avoid potential confusion on the part of market participants.
    The Exchange believes that the proposal to extend certain of the 
non-transaction fee waivers until December 31, 2020 for Market Makers 
in Proprietary Products would increase intra-market competition by 
incentivizing new potential Market Makers to quote in Proprietary 
Products, which will enhance the quality of quoting and increase the 
volume of contracts in Proprietary Products traded on MIAX. To the 
extent that this purpose is achieved, all the Exchange's market 
participants should benefit from the improved market liquidity for the 
Exchange's Proprietary Products. Enhanced market quality and increased 
transaction volume in Proprietary Products that results from the 
anticipated increase in Market Maker activity on the Exchange will 
benefit all market participants and improve competition on the 
Exchange.
    The Exchange does not believe that the proposed rule change will 
impose any burden on intra-market competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed changes for each separate type of market participant (new 
Market Makers and existing Market Makers) will be assessed equally to 
all such market participants. While different fees are assessed to 
different market participants in some circumstances, these different 
market participants have different obligations and different 
circumstances as discussed above. For example, Market Makers have 
quoting obligations that other market participants (such as EEMs) do 
not have.
Inter-Market Competition
    The Exchange does not believe the proposal to reorganize certain 
sections of the Fee Schedule will impose any burden on inter-market 
competition as the proposal does not address any competitive issues and 
is intended to protect investors by providing further transparency 
regarding the Exchange's Fee Schedule.
    The Exchange does not believe that the proposed rule change to 
extend the fee waiver for certain non-transaction fees will impose any 
burden on inter-market competition that is not necessary or appropriate 
in furtherance of the purposes of the Act because the proposed 
extension of the fee waivers apply only to the Exchange's Proprietary 
Products (including options on SPIKES), which are traded exclusively 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,\18\ and Rule 19b-4(f)(2) \19\ 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.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \19\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2020-32 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-2020-32. 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

[[Page 65449]]

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-2020-32, and should be submitted on or before November 5, 2020.
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-22869 Filed 10-14-20; 8:45 am]
BILLING CODE 8011-01-P


