[Federal Register Volume 85, Number 212 (Monday, November 2, 2020)]
[Notices]
[Pages 69371-69375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24162]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90274; File No. SR-EMERALD-2020-13]


Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Fee Schedule To Establish Market Data Fees

October 27, 2020.
    Pursuant to 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 October 14, 2020, MIAX Emerald, LLC (``MIAX Emerald'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the 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 Emerald Fee 
Schedule (the ``Fee Schedule'') to establish market data fees.
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings/emerald, 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 establish market 
data fees. MIAX Emerald commenced operations as a national securities 
exchange registered under Section 6 of the Act \3\ on March 1, 2019.\4\ 
The Exchange adopted its transaction fees and certain of its non-
transaction fees in its filing SR-EMERALD-2019-15.\5\ In that filing, 
the Exchange expressly waived, among others, market data fees to 
provide an incentive to prospective market participants to become 
Members \6\ of the Exchange. At that time, the Exchange waived market 
data fees for the Waiver Period \7\ and stated that it would provide 
notice to market participants when the Exchange intended to terminate 
the Waiver Period.
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    \3\ 15 U.S.C. 78f.
    \4\ See Securities Exchange Act Release No. 84891 (December 20, 
2018), 83 FR 67421 (December 28, 2018) (File No. 10-233) (order 
approving application of MIAX Emerald, LLC for registration as a 
national securities exchange).
    \5\ See Securities Exchange Act Release No. 85393 (March 21, 
2019), 84 FR 11599 (March 27, 2019) (SR-EMERALD-2019-15) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Establish the MIAX Emerald Fee Schedule).
    \6\ ``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 and the Definitions Section of the Fee Schedule.
    \7\ ``Waiver Period'' means, for each applicable fee, the period 
of time from the initial effective date of the MIAX Emerald Fee 
Schedule until such time that the Exchange has an effective fee 
filing establishing the applicable fee. The Exchange will issue a 
Regulatory Circular announcing the establishment of an applicable 
fee that was subject to a Waiver Period at least fifteen (15) days 
prior to the termination of the Waiver Period and effective date of 
any such applicable fee. See the Definitions Section of the Fee 
Schedule.
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    On September 15, 2020, the Exchange issued a Regulatory Circular 
which announced, among other things, that the Exchange would be ending 
the Waiver Period for market data fees, beginning October 1, 2020.\8\
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    \8\ See MIAX Emerald Regulatory Circular 2020-41 available at 
https://www.miaxoptions.com/sites/default/files/circular-files/MIAX_Emerald_RC_2020_41.pdf.
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    On October 1, 2020, the Exchange filed its proposal to assess fees 
for its

[[Page 69372]]

market data products, MIAX Emerald Top of Market (``ToM''), 
Administrative Information Subscriber (``AIS'') feed, and MIAX Order 
Feed (``MOR'').\9\ On October 14, 2020, the Exchange withdrew the First 
Proposed Rule Change and refiled its proposal in order to provide more 
description regarding the difference in pricing for internal 
distributors and external distributors. A more detailed description of 
the ToM, AIS and MOR products can be found in the Exchange's previously 
filed Market Data Product filings.\10\ The Exchange notes that it will 
not be assessing fees for Complex Top of Market (``cToM'') \11\ data at 
this time.
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    \9\ See SR-EMERALD-2020-10 (the ``First Proposed Rule Change'').
    \10\ See Securities Exchange Act Release No. 85207 (February 27, 
2019), 84 FR 7963 (March 5, 2019) (SR-EMERALD-2019-09) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to 
Establish MIAX Emerald Top of Market (``ToM'') Data Feed, MIAX 
Emerald Complex Top of Market (``cToM'') Data Feed, MIAX Emerald 
Administrative Information Subscriber (``AIS'') Data Feed, and MIAX 
Emerald Order Feed (``MOR'')).
    \11\ cToM provides subscribers with the same information as the 
ToM market data product as it relates to the strategy book, i.e., 
the Exchange's best bid and offer for a complex strategy, with 
aggregate size, based on displayable order and quoting interest in 
the complex strategy on the Exchange. cToM also provides subscribers 
with the identification of the complex strategies currently trading 
on MIAX Emerald; complex strategy last sale information; and the 
status of securities underlying the complex strategy (e.g., halted, 
open, or resumed). cToM is distinct from ToM, and anyone wishing to 
receive cToM data must subscribe to cToM regardless of whether they 
are a current ToM subscriber. ToM subscribers are not required to 
subscribe to cToM, and cToM subscribers are not required to 
subscribe to ToM. See id.
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    To summarize, ToM provides market participants with a direct data 
feed that includes the Exchange's best bid and offer, with aggregate 
size, and last sale information, based on displayable order and quoting 
interest on the Exchange. The ToM data feed includes data that is 
identical to the data sent to the processor for the Options Price 
Reporting Authority (``OPRA''). ToM also contains a feature that 
provides the number of Priority Customer \12\ contracts that are 
included in the size associated with the Exchange's best bid and offer.
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    \12\ The term ``Priority Customer'' means a person or entity 
that (i) is not a broker or dealer in securities, and (ii) does not 
place more than 390 orders in listed options per day on average 
during a calendar month for its own beneficial account(s). The 
number of orders shall be counted in accordance with Interpretation 
and Policy .01 to Exchange Rule 100. See Exchange Rule 100.
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    AIS provides market participants with a direct data feed that 
allows subscribers to receive real-time updates of products traded on 
MIAX Emerald, trading status for MIAX Emerald and products traded on 
MIAX Emerald, and liquidity seeking event notifications. The AIS market 
data feed includes opening imbalance condition information, opening 
routing information, expanded quote range information, post-halt 
notifications, and liquidity refresh condition information. AIS real-
time messages are disseminated over multicast to achieve a fair 
delivery mechanism. AIS notifications provide current electronic system 
status allowing subscribers to take necessary actions immediately.
    MOR provides market participants with a direct data feed that 
allows subscribers to receive real-time updates of options orders, 
products traded on MIAX Emerald, MIAX Emerald Options System status, 
and MIAX Emerald Options Underlying trading status. Subscribers to the 
data feed will get a list of all options symbols and strategies that 
will be traded and sourced on that feed at the start of every session.
    The Exchange proposes to charge monthly fees to Distributors 
(defined below) of the ToM, AIS, and MOR market data products. MIAX 
Emerald will assess market data fees applicable to the market data 
products on Internal and External Distributors in each month the 
Distributor is credentialed to use the applicable market data product 
in the production environment. A ``Distributor'' of MIAX Emerald data 
is any entity that receives a feed or file of data either directly from 
MIAX Emerald or indirectly through another entity and then distributes 
it either internally (within that entity) or externally (outside that 
entity). All Distributors are required to execute a MIAX Emerald 
Distributor Agreement. Market data fees for ToM, AIS, and MOR will be 
reduced for new Distributors for the first month during which they 
subscribe to the applicable market data product, based on the number of 
trading days that have been held during the month prior to the date on 
which they have been credentialed to use the applicable market data 
product in the production environment. Such new Distributors will be 
assessed a pro-rata percentage of the fees described above, which is 
the percentage of the number of trading days remaining in the affected 
calendar month as of the date on which they have been credentialed to 
use the applicable market data product in the production environment, 
divided by the total number of trading days in the affected calendar 
month.
    Specifically, the Exchange proposes to assess Internal Distributors 
$1,250 per month and External Distributors $1,750 per month for the ToM 
market data feed. The Exchange proposes to assess Internal Distributors 
$1,250 per month and External Distributors $1,750 per month for the AIS 
market data feed. The Exchange proposes to assess Internal Distributors 
$3,000 per month and External Distributors $3,500 per month for the MOR 
market data feed. The Exchange notes that its data feed prices are 
generally lower than other options exchanges' data feed prices for 
their comparable data feed products.\13\
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    \13\ See Nasdaq PHLX LLC Pricing Schedule, Options 7, Section 
10, Proprietary Data Feed Fees; Cboe BZX Exchange, Inc. Fee 
Schedule, Market Data Fees; Cboe Data Services, LLC, Fee Schedule.
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2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \14\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \15\ in 
particular, in that it is an equitable allocation of reasonable dues, 
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.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that its proposal to adopt market data fees 
is reasonable in several respects. First, the Exchange is subject to 
significant competitive forces in the market for options transaction 
and non-transaction services that constrain its pricing determinations 
in that market. The Commission has repeatedly expressed its preference 
for competition over regulatory intervention in determining prices, 
products, and services in the securities markets. In Regulation NMS, 
the Commission highlighted the importance of market forces in 
determining prices and SRO revenues and, also, recognized that current 
regulation of the market system ``has been remarkably successful in 
promoting market competition in its broader forms that are most 
important to investors and listed companies.'' \16\
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    \16\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005).
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    Numerous indicia demonstrate the competitive nature of this market. 
For example, clear substitutes to the Exchange exist in the market for 
options transaction services. The Exchange is one of several options 
venues to which market participants may direct their order flow, and it 
represents a small

[[Page 69373]]

percentage of the overall market. Within this environment, market 
participants can freely and often do shift their order flow among the 
Exchange and competing venues in response to changes in their 
respective pricing schedules. There are currently 16 registered options 
exchanges competing for order flow. Based on publicly-available 
information, and excluding index-based options, no single exchange has 
more than approximately 16% of the market share of executed volume of 
multiply-listed equity and exchange-traded fund (``ETF'') options.\17\ 
Therefore, no exchange possesses significant pricing power. More 
specifically, for the month of August 2020, the Exchange had a market 
share of approximately 3.24% of executed multiply-listed equity 
options.\18\ Additionally, the Exchange notes that it does not 
currently list any proprietary or singly-list products. Accordingly, 
there are no products listed on the Exchange for which the Exchange is 
the sole source of market data. Thus, it is a business decision whether 
firms decide to purchase the Exchange's market data feeds, as the 
Exchange only offers trading in multiply-listed options.
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    \17\ The Options Clearing Corporation (``OCC'') publishes 
options and futures volume in a variety of formats, including daily 
and monthly volume by exchange, available here: https://www.theocc.com/market-data/volume/default.jsp.
    \18\ See id.
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    The Exchange also believes that the ever-shifting market share 
among the exchanges from month to month demonstrates that market 
participants can discontinue or reduce use of certain categories of 
products, or shift order flow, in response to non-transaction and 
transaction fee changes. For example, on February 28, 2019, the 
Exchange's affiliate, MIAX PEARL, LLC (``MIAX PEARL'') filed with the 
Commission a proposal to increase Taker fees in certain Tiers for 
options transactions in certain Penny classes for Priority Customers 
and decrease Maker rebates in certain Tiers for options transactions in 
Penny classes for Priority Customers (which fee was to be effective 
March 1, 2019).\19\ MIAX PEARL experienced a decrease in total market 
share for the month of March 2019, after the proposal went into effect. 
Accordingly, the Exchange believes that the MIAX PEARL March 1, 2019 
fee change, to increase certain transaction fees and decrease certain 
transaction rebates, may have contributed to the decrease in MIAX 
PEARL's market share and, as such, the Exchange believes competitive 
forces constrain the Exchange's, and other options exchanges, ability 
to set transaction fees and market participants can shift order flow 
based on fee changes instituted by the exchanges.
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    \19\ See Securities Exchange Act Release No. 85304 (March 13, 
2019), 84 FR 10144 (March 19, 2019) (SR-PEARL-2019-07).
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    Further, the Exchange no longer believes it is necessary to waive 
its market data fees to attract market participants to the MIAX Emerald 
market since this market is now established and MIAX Emerald no longer 
needs to rely on such waivers to attract market participants. The 
Exchange believes that the proposed change is equitable and not 
unfairly discriminatory because the elimination of the fee waiver for 
market data fees will uniformly apply to all market participants and 
market participants are not required to purchase any market data feed 
from the Exchange. As described above, the Exchange does not offer 
trading in any proprietary or singly-list options products. 
Accordingly, the Exchange is not the sole source of market data for any 
products listed on the Exchange. Therefore, it is a business decision 
as to whether a firm purchases the Exchange's market data feeds. 
Additionally, the Exchange believes its proposal to establish market 
data fees is reasonable and well within the range of fees assessed 
among other exchanges, including the Exchange's affiliate, MIAX.\20\
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    \20\ See the MIAX Options Fee Schedule.
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    The Exchange believes that it is reasonable, equitable and not 
unfairly discriminatory to assess internal distributors fees that are 
less than the fees assessed for external distributors for subscriptions 
to the Exchange's ToM, AIS and MOR data feeds because internal 
distributors have limited, restricted usage rights to the market data, 
as compared to external distributors which have more expansive usage 
rights. All Members and non-Members that determine to receive any 
market data feed of the Exchange (or its affiliates, MIAX and MIAX 
PEARL), must first execute, among other things, the MIAX Exchange Group 
Exchange Data Agreement (the ``Exchange Data Agreement'').\21\ Pursuant 
to the Exchange Data Agreement, internal distributors are restricted to 
the ``internal use'' of any market data they receive. This means that 
internal distributors may only distribute the Exchange's market data to 
the recipient's officers and employees and its affiliates.\22\ External 
distributors may distribute the Exchange's market data to persons who 
are not officers, employees or affiliates of the external 
distributor,\23\ and may charge their own fees for the distribution of 
such market data. Accordingly, the Exchange believes it is fair, 
reasonable and not unfairly discriminatory to assess external 
distributors a higher fee for the Exchange's market data products as 
external distributors have greater usage rights to commercialize such 
market data. The Exchange believes the proposed fees are a reasonable 
allocation of its costs and expenses among its Members and other 
persons using its facilities since it is recovering the costs 
associated with distributing such data. Access to the Exchange is 
provided on fair and non-discriminatory terms. The Exchange believes 
the proposed fees are equitable and not unfairly discriminatory because 
the fee level results in a reasonable and equitable allocation of fees 
amongst users for similar services. Moreover, the decision as to 
whether or not to purchase market data is entirely optional to all 
users. Potential purchasers are not required to purchase the market 
data, and the Exchange is not required to make the market data 
available. Purchasers may request the data at any time or may decline 
to purchase such data. The allocation of fees among users is fair and 
reasonable because, if the market deems the proposed fees to be unfair 
or inequitable, firms can diminish or discontinue their use of this 
data.
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    \21\ See Exchange Data Agreement, available at https://miaxweb2.pairsite.com/sites/default/files/page-files/MIAX_Exchange_Group_Data_Agreement_09032020.pdf.
    \22\ See id.
    \23\ See id.
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to the public. It was believed that 
this authority would expand the amount of data available to consumers, 
and also spur innovation and competition for the provision of market 
data:

[E]fficiency is promoted when broker-dealers who do not need the 
data beyond the prices, sizes, market center identifications of the 
NBBO and consolidated last sale information are not required to 
receive (and pay for) such data when broker-dealers may choose to 
receive (and pay for) additional market data based on their own 
internal analysis of the need for such data.\24\
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    \24\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005).

    By removing ``unnecessary regulatory restrictions'' on the ability 
of exchanges to sell their own data, Regulation NMS advanced the goals 
of the Act and the principles reflected in its legislative history. If 
the free market should

[[Page 69374]]

determine whether proprietary data is sold to broker-dealers at all, it 
follows that the price at which such data is sold should be set by the 
market as well.
    In July, 2010, Congress adopted H.R. 4173, the Dodd-Frank Wall 
Street Reform and Consumer Protection Act of 2010 (``Dodd-Frank Act''), 
which amended Section 19 of the Act. Among other things, Section 916 of 
the Dodd-Frank Act amended paragraph (A) of Section 19(b)(3) of the Act 
by inserting the phrase ``on any person, whether or not the person is a 
member of the self-regulatory organization'' after ``due, fee or other 
charge imposed by the self-regulatory organization.'' As a result, all 
SRO rule proposals establishing or changing dues, fees or other charges 
are immediately effective upon filing regardless of whether such dues, 
fees or other charges are imposed on members of the SRO, non-members, 
or both. Section 916 further amended paragraph (C) of Section 19(b)(3) 
of the Act to read, in pertinent part, ``At any time within the 60-day 
period beginning on the date of filing of such a proposed rule change 
in accordance with the provisions of paragraph (1) [of Section 19(b)], 
the Commission summarily may temporarily suspend the change in the 
rules of the self-regulatory organization made thereby, 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 this title. If the Commission takes such 
action, the Commission shall institute proceedings under paragraph 
(2)(B) [of Section 19(b)] to determine whether the proposed rule should 
be approved or disapproved.''
    The Exchange believes that these amendments to Section 19 of the 
Act reflect Congress's intent to allow the Commission to rely upon the 
forces of competition to ensure that fees for market data are 
reasonable and equitably allocated. Although Section 19(b) had formerly 
authorized immediate effectiveness for a ``due, fee or other charge 
imposed by the self-regulatory organization,'' the Commission adopted a 
policy and subsequently a rule stating that fees for data and other 
products available to persons that are not members of the self-
regulatory organization must be approved by the Commission after first 
being published for comment. At the time, the Commission supported the 
adoption of the policy and the rule by pointing out that unlike 
members, whose representation in self-regulatory organization 
governance was mandated by the Act, non-members should be given the 
opportunity to comment on fees before being required to pay them, and 
that the Commission should specifically approve all such fees. The 
Exchange believes that the amendment to Section 19 reflects Congress's 
conclusion that the evolution of self-regulatory organization 
governance and competitive market structure have rendered the 
Commission's prior policy on non-member fees obsolete. Specifically, 
many exchanges have evolved from member-owned, not-for-profit 
corporations into for-profit, investor-owned corporations (or 
subsidiaries of investor-owned corporations). Accordingly, exchanges no 
longer have narrow incentives to manage their affairs for the exclusive 
benefit of their members, but rather have incentives to maximize the 
appeal of their products to all customers, whether members or non-
members, so as to broaden distribution and grow revenues. Moreover, the 
Exchange believes that the change also reflects an endorsement of the 
Commission's determinations that reliance on competitive markets is an 
appropriate means to ensure equitable and reasonable prices. Simply 
put, the change reflects a presumption that all fee changes should be 
permitted to take effect immediately, since the level of all fees are 
constrained by competitive forces.
    Selling proprietary market data is a means by which exchanges 
compete to attract business. To the extent that exchanges are 
successful in such competition, they earn trading revenues and also 
enhance the value of their data products by increasing the amount of 
data they provide. The need to compete for business places substantial 
pressure upon exchanges to keep their fees for both executions and data 
reasonable.\25\ The Exchange therefore believes that the fees for 
market data are properly assessed on Members and Non-Member users.
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    \25\ See Sec. Indus. Fin. Mkts. Ass'n (SIFMA), Initial Decision 
Release No. 1015, 2016 SEC LEXIS 2278 (ALJ June 1, 2016) (finding 
the existence of vigorous competition with respect to non-core 
market data).
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    The decision of the United States Court of Appeals for the District 
of Columbia Circuit in NetCoalition v. SEC, No. 09-1042 (D.C. Cir. 
2010), although reviewing a Commission decision made prior to the 
effective date of the Dodd-Frank Act, upheld the Commission's reliance 
upon competitive markets to set reasonable and equitably allocated fees 
for market data:

In fact, the legislative history indicates that the Congress 
intended that the market system `evolve through the interplay of 
competitive forces as unnecessary regulatory restrictions are 
removed' and that the SEC wield its regulatory power `in those 
situations where competition may not be sufficient,' such as in the 
creation of a `consolidated transactional reporting system.' '' \26\
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    \26\ NetCoalition, at 15 (quoting H.R. Rep. No. 94-229, at 92 
(1975), as reprinted in 1975 U.S.C.C.A.N. 321, 323).

    The court's conclusions about Congressional intent are therefore 
reinforced by the Dodd-Frank Act amendments, which create a presumption 
that exchange fees, including market data fees, may take effect 
immediately, without prior Commission approval, and that the Commission 
should take action to suspend a fee change and institute a proceeding 
to determine whether the fee change should be approved or disapproved 
only where the Commission has concerns that the change may not be 
consistent with the Act.
    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues if they 
deem fee levels at a particular venue to be excessive. In such an 
environment, the Exchange must continually adjust its fees for services 
and products, in addition to order flow, to remain competitive with 
other exchanges. The Exchange believes that the proposed changes 
reflect this competitive environment.

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 does not believe that the proposed rule change would 
place certain market participants at the Exchange at a relative 
disadvantage compared to other market participants or affect the 
ability of such market participants to compete. Unilateral action by 
the Exchange in the assessment of certain non-transaction fees for 
services provided to its Members and others using its facilities will 
not have an impact on competition. As a more recent entrant in the 
already highly competitive environment for equity options trading, the 
Exchange does not have the market power necessary to set prices for 
services that are unreasonable or unfairly discriminatory in violation 
of the Act. The Exchange's proposed market data

[[Page 69375]]

fee levels, as described herein, are comparable to fee levels charged 
by other options exchanges for the same or similar services, including 
those fees assessed by the Exchange's affiliate, MIAX.\27\
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    \27\ See the MIAX Options Fee Schedule.
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    The Exchange believes that the proposed market data fees do not 
place certain market participants at a relative disadvantage to other 
market participants because the fees do not apply unequally to 
different size market participants, but instead would allow the 
Exchange charge for the time and resource necessary for providing 
market data to the market participants that request such data. 
Accordingly, the Exchange believes that the proposed market data fees 
do not favor certain categories of market participants in a manner that 
would impose a burden on competition.
Inter-Market Competition
    The Exchange believes the proposed market data fees do not place an 
undue burden on competition on other SROs that is not necessary or 
appropriate. The Exchange operates in a highly competitive market in 
which market participants can readily favor one of the 16 competing 
options venues if they deem fee levels at a particular venue to be 
excessive. Based on publicly-available information, and excluding 
index-based options, no single exchange has more than 16% market 
share.\28\ Therefore, no exchange possesses significant pricing power 
in the execution of multiply-listed equity and ETF options order flow. 
For the month of August 2020, the Exchange had a market share of 
approximately 3.24% of executed multiply-listed equity options,\29\ and 
the Exchange believes that the ever-shifting market share among 
exchanges from month to month demonstrates that market participants can 
discontinue or reduce use of certain categories of products, or shift 
order flow, in response to fee changes. In such an environment, the 
Exchange must continually adjust its fees and fee waivers to remain 
competitive with other exchanges and to attract order flow to the 
Exchange.
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    \28\ See supra note 17.
    \29\ Id.
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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,\30\ and Rule 19b-4(f)(2) \31\ 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.
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    \30\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \31\ 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 rule-comments@sec.gov. Please include 
File Number SR-EMERALD-2020-13 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-EMERALD-2020-13. 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-EMERALD-2020-13, and should be submitted 
on or before November 23, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
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    \32\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-24162 Filed 10-30-20; 8:45 am]
BILLING CODE P


