[Federal Register Volume 86, Number 225 (Friday, November 26, 2021)]
[Notices]
[Pages 67509-67511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25759]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93633; File No. SR-EMERALD-2021-41]


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

November 19, 2021.
    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 November 8, 2021, MIAX Emerald, LLC (``MIAX Emerald'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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 Emerald Fee 
Schedule (the ``Fee Schedule'').
    The text of the proposed rule change is available on the Exchange's 
website at https://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 (i) amend the Fee Schedule to amend the 
exchange groupings of options exchanges within the routing fee table in 
Section 1(b) of the Fee Schedule, Fees for Customer Orders Routed to 
another Options Exchange; and (ii) make a minor, non-substantive edit 
to correct a typographical error. The Exchange initially filed this 
proposal on October 27, 2021 (SR-EMERALD-2021-35) and withdrew such 
filing on November 8, 2021. The Exchange proposes to implement the fee 
change effective November 8, 2021.
    Currently, the Exchange assesses routing fees based upon (i) the 
origin type of the order, (ii) whether or not it is an order for 
standard option classes in the Penny Interval Program \3\ (``Penny 
classes'') or an order for standard option classes which are not in the 
Penny Interval Program (``Non-Penny classes'') (or other explicitly 
identified classes), and (iii) to which away market it is being routed. 
This assessment practice is identical to the routing fees assessment 
practice currently utilized by the Exchange's affiliates, Miami 
International Securities Exchange, LLC (``MIAX'') and MIAX PEARL, LLC 
(``MIAX Pearl''). This is also similar to the methodology utilized by 
the Cboe BZX Exchange, Inc. (``Cboe BZX Options''), a competing options 
exchange, in assessing routing fees. Cboe BZX Options has exchange 
groupings in its fee schedule, similar to those of the Exchange, 
whereby several exchanges are grouped into the same category, dependent 
upon the order's origin type and whether it is a Penny or Non-Penny 
class.\4\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 88993 (June 2, 
2020), 85 FR 35145 (June 8, 2020) (SR-EMERALD-2020-05) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Exchange Rule 510, Minimum Price Variations and Minimum 
Trading Increments, To Conform the Rule to Section 3.1 of the Plan 
for the Purpose of Developing and Implementing Procedures Designed 
To Facilitate the Listing and Trading of Standardized Options).
    \4\ See Cboe U.S. Options Fee Schedules, BZX Options, effective 
August 2, 2021, ``Fee Codes and Associated Fees,'' at https://www.cboe.com/us/options/membership/fee_schedule/bzx/.
---------------------------------------------------------------------------

    As a result of conducting a periodic review of the current 
transaction fees and rebates charged by away markets, the Exchange has 
determined to amend the exchange groupings of options exchanges within 
the routing fee table to better reflect the associated costs of routing 
customer orders to those options exchanges for execution.\5\ In 
particular, the Exchange proposes to amend the exchange groupings in 
the first row of the table identified as, ``Routed, Priority Customer, 
Penny Program,'' to relocate Nasdaq BX Options from the first row of 
the table to the second, also identified as, ``Routed, Priority 
Customer, Penny Program.'' The impact of this proposed change will be 
that the routing fee for Priority Customer orders in the Penny Program 
that are routed to Nasdaq BX Options will increase from $0.15 to $0.65. 
The purpose of the proposed rule change is to adjust the routing fee 
for certain orders routed to Nasdaq BX Options to reflect the 
associated costs for that routed execution.
---------------------------------------------------------------------------

    \5\ Nasdaq BX established a Customer Taker fee of $0.46 in Penny 
Classes and $0.65 in Non-Penny Classes. See Securities Exchange Act 
Release No. 91473 (April 5, 2021), 86 FR 18562 (April 9, 2021) (SR-
BX-2021-009). Nasdaq BX recently increased the Customer Taker fee in 
Non-Penny Classes from $0.65 to $0.79. See Securities Exchange Act 
Release No. 93121 (September 24, 2021), 86 FR 54259 (September 30, 
2021) (SR-BX-2021-040).
---------------------------------------------------------------------------

    Next, the Exchange proposes to amend the exchange groupings in the 
third row of the table, identified as ``Routed, Priority Customer, Non-
Penny Program,'' to relocate Nasdaq BX Options from the third row of 
the table to the fourth, also identified as, ``Routed, Priority 
Customer, Non-Penny Program.'' The impact of this proposed change will 
be that the routing fee for Priority Customer orders in the Non-Penny 
Program that are routed to Nasdaq BX Options will increase from $0.15 
to $1.00. The purpose of the proposed rule change is to adjust the 
routing fee for certain orders routed to Nasdaq BX Options to reflect 
the associated costs for that routed execution.
    Next, the Exchange proposes to amend the exchange groupings in the 
sixth row of the table identified as, ``Routed, Public Customer that is 
not a Priority Customer, Non-Penny Program,'' to relocate Nasdaq ISE 
from

[[Page 67510]]

the exchange groupings in the sixth row of the table to the seventh row 
of the table, also identified as ``Routed, Public Customer that is not 
a Priority Customer, Non-Penny Program.'' The impact of this proposed 
change will be that the Exchange routing fee for Public Customer orders 
in the Non-Penny Program that are routed to Nasdaq ISE will increase 
from $1.00 to $1.15. The purpose of the proposed rule change is to 
adjust the routing fee for certain orders routed to Nasdaq ISE to 
reflect the associated costs for that routed execution.
    Additionally, the Exchange proposes to amend the exchange groupings 
in the seventh row of the table, identified as ``Routed, Public 
Customer that is not a Priority Customer, Non-Penny Program,'' to 
relocate Nasdaq BX Options and MIAX Pearl to the eighth row of the 
table, also identified as, ``Routed, Public Customer that is not a 
Priority Customer, Non-Penny Program.'' The impact of this proposed 
change will be that the routing fee for Public Customer orders that are 
not Priority Customer orders in the Non-Penny Program that are routed 
to Nasdaq BX Options or MIAX Pearl will increase from $1.15 to $1.25. 
The purpose of the proposed rule change is to adjust the routing fee 
for certain orders routed to Nasdaq BX Options or MIAX Pearl to reflect 
the associated costs for that routed execution. The Exchange notes that 
no options exchanges were removed from the routing fee table entirely, 
with the only change being the change in categorization.
    Accordingly, with the proposed change, the routing fee table will 
be as follows:

------------------------------------------------------------------------
                        Description                              Fees
------------------------------------------------------------------------
Routed, Priority Customer, Penny Program, to: NYSE                 $0.15
 American, BOX, Cboe, Cboe EDGX Options, MIAX, Nasdaq MRX,
 Nasdaq PHLX (except SPY)..................................
Routed, Priority Customer, Penny Program, to: NYSE Arca             0.65
 Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, Nasdaq
 ISE, NOM, Nasdaq PHLX (SPY only), MIAX Pearl, Nasdaq BX
 Options...................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE              0.15
 American, BOX, Cboe, Cboe EDGX Options, MIAX, Nasdaq ISE,
 Nasdaq MRX, Nasdaq PHLX...................................
Routed, Priority Customer, Non-Penny Program, to: NYSE Arca         1.00
 Options, Cboe BZX Options, Cboe C2, MIAX Pearl, Nasdaq
 GEMX, NOM, Nasdaq BX Options..............................
Routed, Public Customer that is not a Priority Customer,            0.65
 Penny Program, to: NYSE American, NYSE Arca Options, Cboe
 BZX Options, BOX, Cboe, Cboe C2, Cboe EDGX Options, Nasdaq
 GEMX, Nasdaq ISE, Nasdaq MRX, MIAX, MIAX Pearl, NOM,
 Nasdaq PHLX, Nasdaq BX Options............................
Routed, Public Customer that is not a Priority Customer,            1.00
 Non-Penny Program, to: MIAX, NYSE American, Cboe, Nasdaq
 PHLX, Cboe EDGX Options...................................
Routed, Public Customer that is not a Priority Customer,            1.15
 Non-Penny Program, to: Cboe C2, BOX, NOM, Nasdaq ISE......
Routed, Public Customer that is not a Priority Customer,            1.25
 Non-Penny Program, to: Cboe BZX Options, NYSE Arca
 Options, Nasdaq GEMX, Nasdaq MRX, Nasdaq BX Options, MIAX
 Pearl.....................................................
------------------------------------------------------------------------

    In determining to amend its routing fees the Exchange took into 
account transaction fees and rebates assessed by the away markets to 
which the Exchange routes orders, as well as the Exchange's clearing 
costs, administrative, regulatory, and technical costs associated with 
routing orders to an away market. The Exchange uses unaffiliated 
routing brokers to route orders to the away markets; the costs 
associated with the use of these services are included in the routing 
fees specified in the Fee Schedule. This routing fees structure is not 
only similar to the Exchange's affiliates, MIAX and MIAX Pearl, but is 
also comparable to the structure in place on at least one other 
competing options exchange, such as Cboe BZX Options.\6\ The Exchange's 
routing fee structure approximates the Exchange's costs associated with 
routing orders to away markets. The per-contract transaction fee amount 
associated with each grouping closely approximates the Exchange's all-
in cost (plus an additional, non-material amount) \7\ to execute that 
corresponding contract at that corresponding exchange. The Exchange 
notes that in determining whether to adjust certain groupings of 
options exchanges in the routing fee table, the Exchange considered the 
transaction fees and rebates assessed by away markets, and determined 
to amend the grouping of exchanges that assess transaction fees for 
routed orders within a similar range. This same logic and structure 
applies to all of the groupings in the routing fee table. By utilizing 
the same structure that is utilized by the Exchange's affiliates, MIAX 
and MIAX Pearl, the Exchange's Members \8\ will be assessed routing 
fees in a similar manner. The Exchange believes that this structure 
will minimize any confusion as to the method of assessing routing fees 
between the three exchanges. The Exchange notes that its affiliates, 
MIAX and MIAX Pearl, will file to make the same proposed routing fee 
changes contained herein.
---------------------------------------------------------------------------

    \6\ See supra note 4. The Cboe BZX Options fee schedule has 
exchange groupings, whereby several exchanges are grouped into the 
same category, dependent on the order's Origin type and whether it 
is a Penny or Non-Penny class. For example, Cboe BZX Options fee 
code RR covers routed customer orders in Non-Penny classes to NYSE 
Arca, Cboe C2, Nasdaq ISE, Nasdaq Gemini, MIAX Emerald, MIAX Pearl, 
or NOM, with a single fee of $1.25 per contract.
    \7\ This amount is to cover de minimis differences/changes to 
away market fees (i.e., minor increases or decreases) that would not 
necessitate a fee filing by the Exchange to re-categorize the away 
exchange into a different grouping. Routing fees are not intended to 
be a profit center for the Exchange and the Exchange's target 
regarding routing fees and expenses is to be as close as possible to 
net neutral.
    \8\ The term ``Member'' means an individual or organization 
approved to exercise the trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
the Definitions section of the Fee Schedule and Exchange Rule 100.
---------------------------------------------------------------------------

    Finally, the Exchange proposes to make a minor non-substantive 
change to the title of the table in section 1(b) of the Fee Schedule, 
to capitalize the ``a'' in the word ``another'' such that the title of 
the table will be ``Fees for Customer Orders Routed to Another Options 
Exchange.'' This proposed change harmonizes the title of the table to 
that of the Exchange's affiliate, MIAX Pearl.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \9\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \10\ 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 \11\ in that it is

[[Page 67511]]

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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes the proposed change to the exchange groupings 
of options exchanges within the routing fee table furthers the 
objectives of Section 6(b)(4) of the Act and is reasonable, equitable 
and not unfairly discriminatory because the proposed change will 
continue to apply in the same manner to all Members that are subject to 
routing fees. The Exchange believes the proposed change to the routing 
fee table exchange groupings furthers the objectives of Section 6(b)(5) 
of the Act and is designed to promote just and equitable principles of 
trade and is not unfairly discriminatory because the proposed change 
seeks to recoup costs that are incurred by the Exchange when routing 
customer orders to away markets on behalf of Members and does so in the 
same manner to all Members that are subject to routing fees. The costs 
to the Exchange to route orders to away markets for execution primarily 
includes transaction fees and rebates assessed by the away markets to 
which the Exchange routes orders, in addition to the Exchange's 
clearing costs, administrative, regulatory and technical costs. The 
Exchange believes that the proposed re-categorization of certain 
exchange groupings would enable the Exchange to recover the costs it 
incurs to route orders to Nasdaq BX Options, Nasdaq ISE, and MIAX 
Pearl. The per-contract transaction fee amount associated with each 
grouping approximates the Exchange's all-in cost (plus an additional, 
non-material amount) to execute the corresponding contract at the 
corresponding exchange.
    The Exchange believes the proposed change to correct a 
typographical error in the title of the table in section 1(b) 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 change 
promotes clarity and consistency within the Fee Schedules of MIAX 
Emerald and its affiliate Exchange, MIAX Pearl. The Exchange believes 
this change will provide greater clarity to Members and the public 
regarding the Exchange's Fee Schedule and it is in the public interest 
for the Fee Schedule to be accurate and consistent so as to eliminate 
the potential for confusion.

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 its 
proposed re-categorization of certain exchange groupings is intended to 
enable the Exchange to recover the costs it incurs to route orders to 
away markets, particularly Nasdaq BX Options and Nasdaq ISE. The 
Exchange does not believe that this proposal imposes any unnecessary 
burden on competition because it seeks to recoup costs incurred by the 
Exchange when routing orders to away markets on behalf of Members and 
at least one other options exchange has a similar routing fees 
structure.\12\
---------------------------------------------------------------------------

    \12\ See supra note 4.
---------------------------------------------------------------------------

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 is effective upon filing pursuant to 
Section 19(b)(3)(A) \13\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \14\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

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

    At any time within 60 days of the filing of such 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 under 
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-EMERALD-2021-41 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-2021-41. 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-2021-41 and should be submitted 
on or before December 17, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25759 Filed 11-24-21; 8:45 am]
BILLING CODE 8011-01-P


