[Federal Register Volume 87, Number 38 (Friday, February 25, 2022)]
[Notices]
[Pages 10856-10860]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-03963]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94284; File No. SR-EMERALD-2022-07]


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

February 18, 2022.
    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on February 9, 2022, MIAX Emerald, LLC (``MIAX 
Emerald'' or ``Exchange''), filed with the Securities and Exchange 
Commission (``Commission'') a proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Emerald Fee 
Schedule (the ``Fee Schedule'').
    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 Section 1)a)i) of the Fee Schedule 
to: (i) Modify the application of the per

[[Page 10857]]

contract surcharge assessed for Complex Order \3\ transactions (the 
``Complex surcharge''); and (ii) increase the Complex surcharge for 
Complex Order transactions in Penny and non-Penny Classes (defined 
below). The Exchange originally filed this proposal on January 31, 2022 
(the ``First Proposed Rule Change'').\4\ On February 9, 2022, the 
Exchange withdrew the First Proposed Rule Change and submitted this 
filing for immediate effectiveness.
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    \3\ See Exchange Rule 518(a)(5) for the definition of Complex 
Order.
    \4\ See SR-EMERALD-2022-03.
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Background
    The Exchange currently assesses transaction rebates and fees to all 
market participants, which are based upon a threshold tier structure 
(``Tier''). Tiers are determined on a monthly basis and are based on 
three alternative calculation methods, as defined in Section 1)a)ii) of 
the Fee Schedule. The calculation method that results in the highest 
Tier achieved by the Member \5\ shall apply to all Origin types by the 
Member, except the Priority Customer \6\ Origin type. For the Priority 
Customer Origin calculation, the Tier applied for a Member and its 
Affiliates' \7\ is solely determined by calculation Method 3, as 
defined in Section 1)a)ii) of the Fee Schedule, titled ``Total Priority 
Customer, Maker sides volume, based on % of CTCV (`Method 3').'' The 
monthly volume thresholds for each of the methods, associated with each 
Tier, are calculated as the total monthly volume executed by the Member 
in all options classes on MIAX Emerald in the relevant Origins and/or 
applicable liquidity, not including Excluded Contracts,\8\ (as the 
numerator) expressed as a percentage of (divided by) Customer Total 
Consolidated Volume (``CTCV'') (as the denominator). CTCV is calculated 
as the total national volume cleared at The Options Clearing 
Corporation (``OCC'') in the Customer range in those classes listed on 
MIAX Emerald for the month for which fees apply, excluding volume 
cleared at the OCC in the Customer range executed during the period of 
time in which the Exchange experiences an ``Exchange System 
Disruption'' \9\ (solely in the option classes of the affected Matching 
Engine).\10\ In addition, the per contract transaction rebates and fees 
shall be applied retroactively to all eligible volume once the Tier has 
been reached by the Member. Members that place resting liquidity, i.e., 
orders on the MIAX Emerald System, will be assessed the specified 
``maker'' rebate or fee (each a ``Maker'') and Members that execute 
against resting liquidity will be assessed the specified ``taker'' fee 
or rebate (each a ``Taker'').\11\ Members are also assessed lower 
transaction fees and smaller rebates for order executions in standard 
option classes in the Penny Interval Program \12\ (``Penny Classes'') 
than for order executions in standard option classes which are not in 
the Penny Program (``non-Penny Classes''), for which Members will be 
assessed a higher transaction fees and larger rebates.
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    \5\ ``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.
    \6\ ``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). See Exchange Rule 
100, including Interpretation and Policy .01.
    \7\ ``Affiliate'' means (i) an affiliate of a Member of at least 
75% common ownership between the firms as reflected on each firm's 
Form BD, Schedule A, or (ii) the Appointed Market Maker of an 
Appointed EEM (or, conversely, the Appointed EEM of an Appointed 
Market Maker). An ``Appointed Market Maker'' is a MIAX Emerald 
Market Maker (who does not otherwise have a corporate affiliation 
based upon common ownership with an EEM) that has been appointed by 
an EEM and an ``Appointed EEM'' is an EEM (who does not otherwise 
have a corporate affiliation based upon common ownership with a MIAX 
Emerald Market Maker) that has been appointed by a MIAX Emerald 
Market Maker, pursuant to the following process. A MIAX Emerald 
Market Maker appoints an EEM and an EEM appoints a MIAX Emerald 
Market Maker, for the purposes of the Fee Schedule, by each 
completing and sending an executed Volume Aggregation Request Form 
by email to [email protected] no later than 2 business days 
prior to the first business day of the month in which the 
designation is to become effective. Transmittal of a validly 
completed and executed form to the Exchange along with the 
Exchange's acknowledgement of the effective designation to each of 
the Market Maker and EEM will be viewed as acceptance of the 
appointment. The Exchange will only recognize one designation per 
Member. A Member may make a designation not more than once every 12 
months (from the date of its most recent designation), which 
designation shall remain in effect unless or until the Exchange 
receives written notice submitted 2 business days prior to the first 
business day of the month from either Member indicating that the 
appointment has been terminated. Designations will become operative 
on the first business day of the effective month and may not be 
terminated prior to the end of the month. Execution data and reports 
will be provided to both parties. See the Definitions Section of the 
MIAX Emerald Fee Schedule.
    \8\ ``Excluded Contracts'' means any contracts routed to an away 
market for execution. See the Definitions Section of the Fee 
Schedule.
    \9\ The term ``Exchange System Disruption'' means an outage of a 
Matching Engine or collective Matching Engines for a period of two 
consecutive hour or more, during trading hours. See the Definitions 
Section of the Fee Schedule.
    \10\ A ``Matching Engine'' is a part of the MIAX Emerald 
electronic system that processes options orders and trades on a 
symbol-by-symbol basis. See the Definitions Section of the Fee 
Schedule.
    \11\ For a Priority Customer complex order taking liquidity in 
both a Penny class and non-Penny class against Origins other than 
Priority Customer, the Priority Customer order will receive a rebate 
based on the Tier achieved.
    \12\ 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) (the 
``Penny Program'').
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Proposal To Modify the Application of, and Increase, the Complex 
Surcharge
    The Exchange proposes to amend Section 1)a)i) of the Fee Schedule 
to: (i) Modify the application of the Complex surcharge; and (ii) 
increase the Complex surcharge for Complex Order transactions in Penny 
and non-Penny Classes. Currently, the Exchange assesses a fee of $0.86 
or $0.88 per contract for all Origins other than Priority Customer for 
Complex Orders that remove liquidity from the Exchange's Strategy Book 
\13\ in non-Penny Classes, depending on the Origin and Tier achieved. 
The Exchange also assesses a Complex surcharge of $0.05 per contract 
for all Origins other than Priority Customer for Complex Orders that 
remove liquidity from the Strategy Book in non-Penny Classes, which is 
denoted by footnote ``~'' following the tables in Section 1)a)i) of the 
Fee Schedule. Currently, the Exchange does not assess a Complex 
surcharge for Complex Orders that remove liquidity from the Strategy 
Book in Penny Classes for any Origin.
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    \13\ The ``Strategy Book'' is the Exchange's electronic book of 
complex orders and complex quotes. See Exchange Rule 518(a)(17).
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    The Exchange proposes to modify the application of the Complex 
surcharge in several ways. First, the Exchange proposes that the 
Complex surcharge will now apply to both Penny and non-Penny Classes, 
which the Exchange will denote in both the Penny and non-Penny Class 
tables of transaction fees and rebates in Section 1)a)i) of the Fee 
Schedule (described further below). Prior to the First Proposed Rule 
Change, the Complex surcharge applied only to non-Penny Classes. 
Second, the Exchange proposes that the Complex surcharge will now apply 
to both liquidity adding (Maker) and liquidity removing (Taker) Complex 
Orders for all Origins, except the Priority Customer Origin. Prior to 
the First Proposed Rule Change, the Complex surcharge applied only to 
liquidity removing (Taker) Complex Orders. Third, the Exchange proposes 
that the Complex surcharge will apply to Complex Orders submitted as a 
Response or unrelated quote or

[[Page 10858]]

order in a Complex Order Auction.\14\ Prior to the First Proposed Rule 
Change, the Complex surcharge applied only to liquidity removing 
Complex Orders that were not part of a Complex Order Auction. Fourth, 
the Exchange proposes that the Complex surcharge will apply to Complex 
Orders that are contra to the Priority Customer Origin only. Prior to 
the First Proposed Rule Change, the Complex surcharge applied to 
Complex Orders that were contra to any Origin. Fifth, the Exchange 
proposes to increase the Complex surcharge from $0.05 per contract to 
$0.12 per contract. The Exchange notes that the Complex surcharge will 
continue to not apply to transactions that are Linkage Trades.\15\ 
Additionally, the Exchange notes that the Complex surcharge will not 
apply to transactions that are paired trades, such as transactions in 
cPRIME, which the Exchange proposes to explicitly exclude from the 
Complex surcharge (denoted in a footnote described below). Accordingly, 
with all of the proposed changes, the proposed Complex surcharge of 
$0.12 per contract will apply to Complex Orders for all Origins except 
Priority Customer that add (Maker) or remove (Taker) liquidity in Penny 
and non-Penny Classes when trading against a Priority Customer on the 
Strategy Book. The Complex surcharge would continue to not apply to the 
Priority Customer Origin. The Complex surcharge would also apply to all 
Origins except Priority Customer when trading against a Priority 
Customer as a Response or unrelated quote or order in a Complex Order 
Auction,\16\ other than a cPRIME auction.\17\ The Exchange notes that 
the proposed application and amount of the Complex surcharge subject to 
this filing is the same application and amount of the Complex surcharge 
that is currently assessed by the Exchange's affiliate, Miami 
International Securities Exchange, LLC (``MIAX'').\18\ For example, 
assuming a Firm Origin Complex Order taking liquidity against (contra) 
a Priority Customer Origin Complex Order resting liquidity in a Penny 
Class, MIAX will charge a standard fee of $0.47 and a Complex surcharge 
of $0.12.\19\ Similarly, under the proposed fee application and 
proposed Complex surcharge rate increase, MIAX Emerald would now charge 
a standard (taker) fee of $0.50 and a Complex surcharge of $0.12.
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    \14\ See Exchange Rule 518(d) (describing the Complex Order 
Auction process). The Exchange notes that the Complex surcharge will 
not apply to Complex Orders submitted as part of a cPRIME auction. A 
Complex PRIME or ``cPRIME'' Order is a complex order (as defined in 
Rule 518(a)(5)) that is submitted for participation in a cPRIME 
Auction. Trading of cPRIME Orders is governed by Rule 515A, 
Interpretation and Policy .12. See Exchange Rule 518(b)(7). 
``cPRIME'' is the process by which a Member may electronically 
submit a ``cPRIME Order'' (as defined in Exchange Rule 518(b)(7)) it 
represents as agent (a ``cPRIME Agency Order'') against principal or 
solicited interest for execution (a ``cPRIME Auction''), subject to 
the requirements in Exchange Rule 515A, Interpretation and Policy 
.12(a). See, generally, Exchange Rule 515A.
    \15\ See Exchange Rule 521(j).
    \16\ See Exchange Rule 518(d).
    \17\ See supra note 14.
    \18\ See MIAX Fee Schedule, Sections 1)a)i)-ii) (assessing a 
$0.12 per contract surcharge for trading against a Priority Customer 
Complex Order for Penny and Non-Penny classes).
    \19\ See MIAX Fee Schedule, Section 1)a)ii).
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    To represent all the proposed changes, the Exchange proposes to add 
a new column to each table for Penny and non-Penny Classes in Section 
1)a)i) of the Fee Schedule, under the ``Complex'' heading. The Exchange 
proposes that each new column would be titled ``Per Contract Surcharge 
for Trading Against a Priority Customer Complex Order.'' \20\ In the 
new column for each table, the Exchange proposes to insert the proposed 
increased Complex surcharge amount of $0.12 per contract for all 
Origins, except Priority Customer, which would be $0.00 per contract 
for all Tiers. The Exchange also proposes to move footnote ``~'' from 
the ``Taker'' column in the non-Penny Classes table and insert it at 
the end of each of the newly proposed column headings for the Complex 
surcharge, described above. Further, the Exchange proposes to delete 
the text of footnote ``~'' in its entirety and insert the following new 
text for that footnote following the tables in Section 1)a)i) of the 
Fee Schedule: ``The per contract surcharge for trading against a 
Priority Customer Complex Order for Penny and Non-Penny Classes applies 
to all Origins except Priority Customer when trading against a Priority 
Customer: (i) On the Strategy Book; or (ii) as a Response or unrelated 
quote or order in a complex order auction other than a cPRIME 
Auction.'' \21\
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    \20\ This is similar to how the Complex surcharge is represented 
in the tables of transaction fees and rebates in the MIAX Fee 
Schedule. See supra note 18.
    \21\ This is substantially similar language regarding the 
application of the Complex surcharge that is represented by text 
below the tables of transaction fees and rebates in the MIAX Fee 
Schedule. See MIAX Fee Schedule, Section 1)a)ii), at page 4.
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    As described above, the Exchange proposes to increase the Complex 
surcharge from $0.05 per contract to $0.12 per contract. The Exchange 
notes that the proposed Complex surcharge rate of $0.12 per contract is 
the same amount charged by at least two competing options exchanges 
with base fee amounts for complex orders of $0.50 per contract in Penny 
Classes plus a $0.12 per contract complex surcharge, which has similar 
application methods.\22\ Further, the proposed application and 
increased amount of the Complex surcharge is the same application and 
amount of the Complex surcharge that is currently assessed by the 
Exchange's affiliate, MIAX.\23\
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    \22\ See NYSE American Options Fee Schedule, Section I.A., 
footnote 5, page 9 (assessing $0.12 per contract surcharge to any 
Electronic Non-Customer Complex Order that executes against a 
Customer Complex Order, regardless of whether the execution occurs 
in a Complex Order Auction); BOX Options Exchange Fee Schedule, 
Section III.A. Complex Order Transaction Fees (noting that a $0.12 
per contract Complex Surcharge will be applied to any electronic 
non-Public Customer Complex Order that executes against an 
electronic Public Customer Complex Order, including for Penny 
Interval Class taker fees with a base fee amount of $0.50 per 
contract).
    \23\ See supra note 18.
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    The purpose of the proposed changes to the Complex surcharge are 
for business and competitive reasons. In order to attract order flow, 
the Exchange initially set its Complex surcharge rate so that it was 
similar to, or lower, than other options exchanges that operate 
comparable maker/taker pricing models.\24\ The Exchange now believes 
that it is appropriate to adjust this rate and application so that it 
is more in line with other exchanges, but will remain highly 
competitive such that it should enable the Exchange to continue to 
attract order flow and maintain market share.\25\
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    \24\ See Securities Exchange Act Release No. 85393 (March 21, 
2019), 84 FR 11599 (March 27, 2019) (SR-EMERALD-2019-15).
    \25\ See supra notes 18 and 22.
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Implementation
    The proposed changes are immediately effective.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \26\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act,\27\ in that it 
is an equitable allocation of reasonable dues, fees and other charges 
among Exchange members and issuers and other persons using its 
facilities, and 6(b)(5) of the Act,\28\ in that it is designed to 
prevent fraudulent and manipulative acts and practices, promote just 
and equitable principles of trade, foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, remove 
impediments to and perfect the mechanisms of a free and open market and 
a national market system and, in

[[Page 10859]]

general, protect investors and the public interest.
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    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(4).
    \28\ 15 U.S.C. 78f(b)(1) and (b)(5).
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    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.'' \29\
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    \29\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005).
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    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 a market share of more than 
approximately 12-13% of the equity options market.\30\ Therefore, no 
exchange possesses significant pricing power. More specifically, as of 
January 26, 2022, the Exchange had a market share of approximately 
3.96% of executed volume of multiply-listed equity and exchange traded 
fund (``ETF'') options for the month of January 2022.\31\
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    \30\ See ``The Market at a Glance,'' (last visited January 26, 
2022), available at https://www.miaxoptions.com/.
    \31\ See id.
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    The Exchange 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 and 
services, terminate an existing membership or determine to not become a 
new member, and/or shift order flow, in response to 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).\32\ 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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    \32\ See Securities Exchange Act Release No. 85304 (March 13, 
2019), 84 FR 10144 (March 19, 2019) (SR-PEARL-2019-07).
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    The Exchange believes its proposal is reasonable, equitable and not 
unfairly discriminatory because all similarly situated market 
participants in the same Origin type (except Priority Customers) will 
now be subject to the Complex surcharge. The Exchange believes it is 
equitable and not unfairly discriminatory to increase the Complex 
surcharge for business and competitive business reasons. The Exchange 
initially set its Complex surcharge rate similar to, or lower than, the 
complex surcharges assessed by other options exchanges that operate 
comparable maker/taker pricing models. The Exchange now believes that 
it is appropriate to increase the Complex surcharge so that it is in 
line with other exchanges, and will still remain highly competitive 
such that it should enable the Exchange to continue to attract order 
flow and maintain market share.\33\ The Exchange believes that the 
amount of Complex surcharge, as proposed, will continue to encourage 
market participants to send Complex Orders to the Exchange.
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    \33\ See supra notes 18 and 22.
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    The Exchange believes the proposal to increase the Complex 
surcharge and broaden its application is consistent with Section 
6(b)(4) of the Act \34\ because it applies equally to all market 
participants (Market Makers, Non-MIAX Market Makers, Firm Proprietary/
Broker-Dealers, except Priority Customers) that would be charged such 
Complex surcharge. Assessing the Complex surcharge to Market Makers and 
other professional market participants (except Priority Customers), in 
a broader application, similar to that of other exchanges, is 
reasonable and not unfairly discriminatory because it will provide 
Market Makers and other professional market participants with equal 
surcharges when trading against a Priority Customer Complex Order. As 
stated above, the proposed Complex surcharge is the same amount as the 
surcharges assessed by NYSE American Options, BOX Options, and the 
Exchange's affiliate, MIAX.\35\ The Exchange notes that, although the 
increase of the Complex surcharge represents a slight fee increase, the 
Exchange believes that this increase is fair and equitable because it 
is in line with the amount of surcharges assessed on other options 
exchanges when trading against Priority Customer Complex Orders.\36\
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    \34\ 15 U.S.C. 78f(b)(4).
    \35\ See supra notes 18 and 22.
    \36\ See id.
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    The Exchange believes its proposal to apply the Complex surcharge 
to all Origins, except Priority Customer, is reasonable, equitably 
allocated and not unfairly discriminatory because it will continue to 
encourage Priority Customer Complex Order flow. The Exchange believes 
increased Priority Customer Complex Order flow benefits all market 
participants by providing more trading opportunities and tighter 
spreads. The Exchange also believes that increased Priority Customer 
Complex Order flow may attract Market Makers and other liquidity 
providers, thus, facilitating price improvement in the Complex Order 
Auction process, signaling additional corresponding increase in Complex 
Order flow from other market participants, and, as a result, increasing 
liquidity on the Exchange.
    The Exchange believes its proposal to broaden the application of 
the Complex surcharge is also consistent with Section 6(b)(5) of the 
Act \37\ because it perfects the mechanisms of a free and open market 
and a national market system by aligning the broader application of the 
Complex surcharge to that of other options exchanges,\38\ which will 
help to create consistency and uniformity in the marketplace.
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    \37\ 15 U.S.C. 78f(b)(1) and (b)(5).
    \38\ See supra note 22.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes 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 proposed changes to the Complex 
surcharge should continue to encourage the provision of liquidity that 
enhances the quality of the Exchange's Complex Order market and 
increases the number of trading opportunities on the Exchange for all 
participants who will be able to compete for such opportunities. The 
proposed rule changes should enable the Exchange to continue to attract 
and compete for order flow with other exchanges. The Exchange also 
believes that its proposal to apply the Complex surcharge to all 
Origins except Priority Customer will not impose any burden on 
competition not necessary or appropriate because the

[[Page 10860]]

Exchange believes increased Priority Customer Complex Order flow 
benefits all market participants by providing more trading 
opportunities and tighter spreads. The Exchange also believes that 
increased Priority Customer Complex Order flow may attract Market 
Makers and other liquidity providers, thus, facilitating price 
improvement in the Complex Order Auction process, signaling additional 
corresponding increase in Complex Order flow from other market 
participants, and, as a result, increasing liquidity on the Exchange.
Inter-Market Competition
    The Exchange 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. 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 a market share of more than approximately 12-13% of 
the equity options market.\39\ Therefore, no exchange possesses 
significant pricing power. More specifically, as of January 26, 2022, 
the Exchange had a market share of approximately 3.96% of executed 
volume of multiply-listed equity and ETF options for the month of 
January 2022.\40\ Therefore, no exchange possesses significant pricing 
power in the execution of multiply-listed equity and ETF options order 
flow. In such an environment, the Exchange must continually adjust its 
transaction and non-transaction fees to remain competitive with other 
exchanges and to attract order flow. The Exchange believes that the 
proposed rule changes reflect this competitive environment because it 
modifies the Exchange's fees for Complex Order transactions in a manner 
that will allow the Exchange to remain competitive.
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    \39\ See supra note 30.
    \40\ See 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,\41\ and Rule 19b-4(f)(2) \42\ 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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    \41\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \42\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-EMERALD-2022-07 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-2022-07. 
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-2022-07, and should 
be submitted on or before March 18, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\43\
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    \43\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-03963 Filed 2-24-22; 8:45 am]
BILLING CODE 8011-01-P


