[Federal Register Volume 87, Number 158 (Wednesday, August 17, 2022)]
[Notices]
[Pages 50657-50661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17668]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95478; File No. SR-MIAX-2022-27]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Its Fee Schedule To Amend Certain Fees 
and Rebates for Transactions in SPIKES Options

August 11, 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 July 29, 2022, Miami International Securities 
Exchange LLC (``MIAX'' or ``Exchange'') filed with the Securities and 
Exchange Commission (``Commission'') a proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Options Fee 
Schedule (the ``Fee Schedule'') to amend the MIAX Options Exchange Fee 
Schedule (the ``Fee Schedule'') to amend certain fees and rebates for 
transactions in SPIKES options (defined below).
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings, at MIAX's principal 
office, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Section (1)(b)(i) of the Fee 
Schedule to: (1) amend certain fees and rebates for Simple and Complex 
transactions in SPIKES options; \3\ (2) adopt a new ``Routing EEM 
Rebate Program'' \4\ for certain SPIKES option orders routed to the 
Exchange; (3) remove the Market Turner Incentive Program; and (4) amend 
certain PRIME \5\ and cPRIME \6\ fees for orders in SPIKES options.
---------------------------------------------------------------------------

    \3\ SPIKES is a ``Proprietary Product.'' The term ``Proprietary 
Product'' means a class of options that is listed exclusively on the 
Exchange. See Fee Schedule, Section (1)(b)(i), note ``[xutri]'' and 
Exchange Rule 100.
    \4\ An ``Electronic Exchange Member'' or ``EEM'' means the 
holder of a Trading Permit who is not a Market Maker. Electronic 
Exchange Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
    \5\ The Price Improvement Mechanism (``PRIME'') is a process by 
which a Member may electronically submit for execution (``Auction'') 
an order it represents as agent (``Agency Order'') against principal 
interest, and/or an Agency Order against solicited interest. See 
Exchange Rule 515A(a).
    \6\ ``cPRIME'' is the process by which a Member may 
electronically submit a ``cPRIME Order'' (as defined in 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 conditions set forth in Exchange Rule 
515A, Interpretation and Policy .12. See Exchange Rule 515A, 
Interpretation and Policy .12.
---------------------------------------------------------------------------

Background
    On October 12, 2018, the Exchange received approval from the 
Commission to list and trade on the Exchange options on the 
SPIKES[supreg] Index, a new index that measures expected 30-day 
volatility of the SPDR S&P 500 ETF Trust (commonly known and referred 
to by its ticker symbol, ``SPY'').\7\ The Exchange adopted its initial 
SPIKES options transaction fees on February 15, 2019 and adopted a new 
section of the Fee Schedule--Section 1)a)xi), SPIKES--for those 
fees.\8\ SPIKES options began trading on the Exchange on February 19, 
2019.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 84417 (October 12, 
2018), 83 FR 52865 (October 18, 2018) (SR-MIAX-2018-14) (Order 
Granting Approval of a Proposed Rule Change by Miami International 
Securities Exchange, LLC to List and Trade on the Exchange Options 
on the SPIKES[supreg] Index).
    \8\ See Securities Exchange Release No. 85283 (March 11, 2019), 
84 FR 9567 (March 15, 2019) (SR-MIAX-2019-11). The Exchange 
initially filed the proposal on February 15, 2019 (SR-MIAX-2019-04). 
That filing was withdrawn and replaced with SR-MIAX-2019-11. On 
September 30, 2020, the Exchange filed its proposal to, among other 
things, reorganize the Fee Schedule to adopt new Section (1)(b), 
Proprietary Products Exchange Fees, and moved the fees and rebates 
for SPIKES options into new Section (1)(b)(i). See Securities 
Exchange Act Release No. 90146 (October 9, 2020), 85 FR 65443 
(October 15, 2020) (SR-MIAX-2020-32).
---------------------------------------------------------------------------

Proposed Changes to the Table of Fees for Simple and Complex Orders in 
SPIKES Options
    The Exchange proposes to amend Section (1)(b)(i) of the Fee 
Schedule to amend the table of Simple and Complex Fees for transactions 
in SPIKES options. The Exchange charges Simple and Complex fees by 
origin type to each market participant that places resting liquidity in 
SPIKES options, i.e., quotes or orders on the MIAX System,\9\ which are 
assessed the ``maker'' fee (each a ``Maker''). The Exchange also 
charges Simple and Complex fees by origin type to each market 
participant that executes against (remove) resting liquidity in SPIKES 
options, which are assessed a higher ``taker'' fee (each a ``Taker'').
---------------------------------------------------------------------------

    \9\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
---------------------------------------------------------------------------

    Currently, with respect to Simple and Complex Maker fees, the 
Exchange charges the following, regardless of the contra-side origin: 
(i) $0.00 per contract for SPIKES options orders for Priority 
Customers,\10\ Market Makers,\11\ and Firm Proprietary quotes or 
orders; and (ii) $0.10 per contract for SPIKES options orders for Non-
MIAX Market Makers, Broker-Dealers, and Public Customers that are not 
Priority

[[Page 50658]]

Customers.\12\ Currently, with respect to Simple and Complex Taker 
fees, the Exchange charges the following, regardless of the contra-side 
origin: (i) $0.00 per contract for SPIKES options orders for Priority 
Customers; (ii) $0.20 per contract for SPIKES options orders for Market 
Makers and Firm Proprietary orders; and (iii) $0.25 per contract for 
SPIKES options orders for Non-MIAX Market Makers, Broker-Dealers, and 
Public Customers that are not Priority Customers.\13\ The Exchange 
notes that it charges Simple and Complex Taker fees of $0.05 per 
contract for SPIKES options with a premium price of $0.10 or less for 
Market Makers and Firm Proprietary quotes or orders, which is denoted 
by the symbol ``*''.
---------------------------------------------------------------------------

    \10\ A ``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 accounts(s). A ``Priority 
Customer Order'' means an order for the account of a Priority 
Customer. See Exchange Rule 100.
    \11\ The term ``Market Makers'' refers to ``Lead Market 
Makers'', ``Primary Lead Market Makers'' and ``Registered Market 
Makers'' collectively. See Exchange Rule 100.
    \12\ See Fee Schedule, Section (1)(b)(i).
    \13\ See id.
---------------------------------------------------------------------------

    The Exchange proposes to add two new columns to the table of Simple 
and Complex Fees to provide for different Maker and Taker fees 
depending on whether the contra-side origin is a Priority Customer or 
not. The Exchange proposes that the first fee column in the table of 
Simple and Complex Fees will now be titled ``Simple/
Complex[yen] Maker when trading contra to origins Not 
Priority Customer.'' The Exchange proposes to keep the current Maker 
fee rates in place for that column. Accordingly, with the proposed 
changes, the Exchange will charge Simple and Complex Maker fees when 
trading contra to origins not Priority Customer as follows: (i) $0.00 
per contract for SPIKES options orders for Priority Customers, Market 
Makers, and Firm Proprietary orders; and (ii) $0.10 per contract for 
SPIKES options orders for Non-MIAX Market Makers, Broker-Dealers, and 
Public Customers that are not Priority Customers.
    Next, the Exchange proposes to add a new second fee column titled 
``Simple/Complex[yen] Maker when trading contra to Priority 
Customer.'' The Exchange proposes to charge the following Simple and 
Complex Maker fees when trading contra to Priority Customer orders: (i) 
$0.00 per contract for SPIKES options orders for Priority Customers; 
(ii) $0.10 per contract for SPIKES options orders for Market Makers and 
Firm Proprietary orders; and (iii) $0.25 per contract for SPIKES 
options orders for Non-MIAX Market Makers, Broker-Dealers, and Public 
Customers that are not Priority Customers.
    The Exchange proposes that the third fee column in the table of 
Simple and Complex Fees will now be titled ``Simple/
Complex[yen] Taker when trading contra to origins Not 
Priority Customer.'' The Exchange proposes to keep the current Taker 
fee rates in place for that column. Accordingly, with the proposed 
changes, the Exchange will charge Simple and Complex Taker fees when 
trading contra to origins not Priority Customer as follows: (i) $0.00 
per contract for SPIKES options orders for Priority Customers; (ii) 
$0.20 per contract for SPIKES options orders for Market Makers and Firm 
Proprietary orders; and (iii) $0.25 per contract for SPIKES options 
orders for Non-MIAX Market Makers, Broker-Dealers, and Public Customers 
that are not Priority Customers.
    Next, the Exchange proposes to add a new fourth fee column titled 
``Simple/Complex[yen] Taker when trading contra to Priority 
Customer.'' The Exchange proposes to charge the following Simple and 
Complex Taker fees when trading contra to Priority Customer orders: (i) 
$0.00 per contract for SPIKES options orders for Priority Customers; 
(ii) $0.30 per contract for SPIKES options orders for Market Makers and 
Firm Proprietary orders; and (iii) $0.35 per contract for SPIKES 
options orders for Non-MIAX Market Makers, Broker-Dealers, and Public 
Customers that are not Priority Customers. The Exchange notes that it 
will continue charge Simple and Complex Taker fees of $0.05 per 
contract for SPIKES options with a premium price of $0.10 or less for 
Market Makers and Firm Proprietary orders, which will be denoted by the 
symbol ``*'' in the new column of Taker fees for trading contra to 
Priority Customer orders.
    Next, the Exchange proposes to amend the fee for Simple Opening 
orders in SPIKES options listed in the table of Simple and Complex Fees 
in Section (1)(b)(i) of the Fee Schedule. Currently, the Exchange 
charges the following Simple Opening fees: (i) $0.00 per contract for 
SPIKES options orders for Priority Customers; and (ii) $0.15 per 
contract for SPIKES options orders for Market Makers, Non-MIAX Market 
Makers, Broker-Dealers, Firm Proprietary quotes or orders, and Public 
Customers that are not Priority Customers. The Exchange now proposes to 
increase the fee for Simple Opening orders in SPIKES options from $0.15 
per contract to $0.25 per contract for all market participants except 
Priority Customers.
    The Exchange does not propose any changes to the fees for 
Combination Orders,\14\ the Simple Large Trade Discount Threshold or 
the Complex Large Trade Discount Threshold.
---------------------------------------------------------------------------

    \14\ A ``SPIKES Combination'' is a purchase (sale) of a SPIKES 
call option and sale (purchase) of a SPIKES put option having the 
same expiration date and strike price. See Fee Schedule, Section 
(1)(b)(i), note ``~''.
---------------------------------------------------------------------------

    The purpose of all these changes is for business and competitive 
reasons.
Proposal To Adopt the Routing EEM Rebate Program
    Next, the Exchange proposes to adopt the ``Routing EEM Rebate 
Program'' following the footnotes for the table of Simple and Complex 
Fees for SPIKES options in Section (1)(b)(i) of the Fee Schedule. 
Pursuant to this program, the Exchange proposes to provide a ($0.25) 
rebate per executed Priority Customer origin SPIKES options contract to 
the EEM that routed the order to the Exchange. The Exchange proposes 
that the following Priority Customer SPIKES options orders would be 
eligible to participate in the Routing EEM Rebate Program: (a) Simple 
Orders of 250 contracts or less (including during the Opening Process); 
(b) for Complex Orders, the lesser of (i) 250 strategies or less, or 
(ii) orders for a total of 1,000 contracts or less; (c) PRIME Agency 
Orders of 250 contracts or less; and (d) for cPRIME Agency Orders, the 
lesser of (i) 250 strategies or less, or (ii) orders for a total of 
1,000 contracts or less. The Exchange proposes that the following 
Priority Customer SPIKES options orders would not be eligible to 
participate in the Routing EEM Rebate Program: (a) PRIME contra-side 
orders; (b) cPRIME contra-side orders; and (c) for Combination Orders, 
(i) a Combination Order, (ii) Combination Orders as part of a larger 
strategy, and (iii) Combination Orders as part of a cPRIME order. The 
Exchange also proposes to exclude from the Routing EEM Rebate Program 
orders that are broken up in order to qualify for the 250 contracts 
(strategies) size limit described above. The purpose of the change to 
adopt the Routing EEM Rebate Program is to attract more Priority 
Customer order flow in SPIKES options, thereby improving the overall 
marketplace for SPIKES options on the Exchange.
Removal of the Market Turner Incentive Program
    Next, the Exchange proposes to amend Section (1)(b)(i) of the Fee 
Schedule to remove the Market Turner \15\ Incentive Program. The 
Exchange adopted the Market Turner Incentive Program beginning June 1,

[[Page 50659]]

2019.\16\ Pursuant to the Market Turner Incentive Program, the Exchange 
provides a per contract rebate to the Market Turner for each SPIKES 
options contract that executes as the MBB (MBO). The amount of the 
rebate is as follows: (i) $0.20 per executed contract, for options 
having a premium price greater than $0.10, or (ii) $0.05 per executed 
contract, for options having a premium price of $0.10 or less.\17\ The 
Market Turner Incentive Program was adopted to incentivize Market 
Makers to quote aggressively in SPIKES options on the Exchange, which 
the Exchange believed would strengthen its market quality for all 
market participants in SPIKES options. The Market Turner Incentive 
Program was also designed to attract additional market makers (both 
existing MIAX Market Makers as well as non-members to join MIAX) to 
quote in SPIKES options. The Exchange believes that the Market Turner 
Incentive Program has fulfilled its intended purpose and that the 
Exchange's other fee changes related to SPIKES options, including the 
changes described herein, will continue to strengthen the market 
quality for all market participants in SPIKES options. Accordingly, the 
Exchange proposes to remove the text for the Market Turner Incentive 
Program from the Fee Schedule.
---------------------------------------------------------------------------

    \15\ The term ``Market Turner'' means a Market Maker simple 
quote (not eQuote) that establishes and maintains the new MIAX best 
bid (the ``MBB'') or the MIAX best offer (``MBO'') in a SPIKES 
option. See Fee Schedule, Section (1)(b)(i).
    \16\ See Securities Exchange Act Release No. 86110 (June 14, 
2019), 84 FR 28864 (June 20, 2019) (SR-MIAX-2019-29).
    \17\ See Fee Schedule, Section (1)(b)(i).
---------------------------------------------------------------------------

Proposed Changes to PRIME and cPRIME Fees for SPIKES Options
    Next, the Exchange proposes to amend the table of PRIME and cPRIME 
fees for SPIKES options in Section (1)(b)(i) of the Fee Schedule. 
Currently, for SPIKES options orders entered into PRIME or cPRIME, the 
Exchange charges a contra-side fee for all origin types in the amount 
of $0.20 and a responder fee in the amount of $0.25. The Exchange now 
proposes to increase the contra-side and responder fees for SPIKES 
options orders entered into PRIME or cPRIME for all origin types. In 
particular, the Exchange proposes to charge a contra-side fee for all 
origin types in the amount of $0.25 and a responder fee in the amount 
of $0.50. The purpose of these changes is for business and competitive 
reasons.
    The proposed changes described in this filing will become effective 
August 1, 2022.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \18\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \19\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among its members and issuers and other persons using 
its facilities.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

Simple and Complex Fee Changes
    The Exchange believes the proposed changes to the Simple and 
Complex fees for transactions in SPIKES option are reasonable, 
equitable and not unfairly discriminatory because the Exchange will 
continue to assess lower transaction fees to its Makers as compared to 
its Takers as an incentive for market participants to provide liquidity 
on the Exchange. The Exchange believes this will encourage greater 
order flow from all market participants, which will in turn bring 
greater volume and liquidity to the Exchange, which benefits all market 
participants by providing more trading opportunities and tighter 
spreads. The Exchange believes it is reasonable, equitable and not 
unfairly discriminatory to charge slightly higher fees for market 
participants trading contra to Priority Customer SPIKES options orders 
because there is a history in the options markets of providing 
preferential treatment to Priority Customers and Priority Customer 
order flow attracts additional liquidity to the Exchange. The Exchange 
believes the added Priority Customer SPIKES options order flow will 
provide all market participants with more trading opportunities and 
encourage an increase in Market Maker activity, which facilitates 
tighter spreads. This may cause an additional corresponding increase in 
order flow from other market participants, contributing overall towards 
a robust and well-balanced market ecosystem, particularly in a newer 
product such as SPIKES options.
    The Exchange believes that it is equitable and not unfairly 
discriminatory that Firm Proprietary orders will continue to be 
assessed lower Maker and Taker fees for Simple and Complex orders than 
other origin types because the Exchange believes that Firm Proprietary 
order flow enhances liquidity on the Exchange for the benefit of all 
market participants. Firm Proprietary order flow liquidity benefits all 
market participants by providing more robust trading opportunities, 
which attract Market Makers. An increase in the activity of those 
market participants in turn facilitates tighter spreads, which may 
cause an additional corresponding increase in order flow from other 
market participants. The Maker and Taker fees offered to Firm 
Proprietary orders are intended to attract more Firm Proprietary order 
volume to the Exchange.
    The Exchange further believes that it is equitable and not unfairly 
discriminatory to continue to assess lower Maker and Taker fees to 
Market Makers for Simple and Complex orders as compared to other market 
participants because Market Makers, unlike other market participants, 
take on a number of obligations, including quoting obligations that 
other market participants do not have.\20\ Further, Market Makers have 
added market making and regulatory requirements, which normally do not 
apply to other market participants. For example, Market Makers have 
obligations to maintain continuous markets, engage in a course of 
dealings reasonably calculated to contribute to the maintenance of a 
fair and orderly market, and to not make bids or offers or enter into 
transactions that are inconsistent with a course of dealing. Further, 
the proposed lower Maker and Taker fees offered to Market Makers are 
intended to incent Market Makers to quote and trade more in SPIKES 
options on the Exchange, thereby providing more liquidity and trading 
opportunities for all market participants in SPIKES options. 
Additionally, the proposed Maker and Taker fees for Market Makers will 
be applied equally to all Market Makers in SPIKES options.
---------------------------------------------------------------------------

    \20\ See, generally, Chapter VI of the Exchange's Rulebook.
---------------------------------------------------------------------------

    Moreover, the Exchange believes that assessing all other market 
participants that are not Priority Customers a higher transaction fee 
for orders in SPIKES options, including for Simple Opening orders, is 
reasonable, equitable, and not unfairly discriminatory because these 
types of market participants are more sophisticated and have higher 
levels of order flow activity and system usage. This level of trading 
activity draws on a greater amount of system resources than that of 
Priority Customers. Further, the Exchange believes it is equitable and 
not unfairly discriminatory to assess all other market participants 
that are not Priority Customers, Market Makers, or Firm Proprietary 
orders higher Simple and Complex Maker fees for orders in SPIKES 
options (including Simple Opening orders) because Priority Customers, 
Market Makers, and Firm Proprietary orders bring valuable liquidity to 
the market. An increase in the activity of these market participants in 
turn facilitates tighter spreads, which may cause an additional 
corresponding increase in order flow from other market

[[Page 50660]]

participants, which in turn benefits the market as a whole.
    The Exchange also believes the proposed changes for SPIKES options 
Simple and Complex transaction fees are reasonably designed because the 
proposed fees are within the range of fees assessed by other exchanges 
employing similar fee structures for singly-listed competing options 
products. For example, Cboe Exchange, Inc. (``Cboe'') assesses 
Customers VIX \21\ simple order fees based on tiered premium price 
which ranges from base prices of $0.10 to $0.45 per contract and 
complex order fees based on tiered premium price which ranges from base 
prices $0.05 to $0.45 per contract.\22\ Further, a Clearing Trading 
Permit Holder Proprietary is assessed a VIX fee based on a VIX sliding 
scale which ranges from $0.25 to $0.01 per contract.\23\ A Cboe Options 
Market-Maker/DPM/LMM are assessed fees based on tiered premium price 
which ranges from $0.05 to $0.23 per contract. Joint Back Office, Non-
Trading Permit Holder Market Makers, and Professionals are assessed a 
VIX $0.40 per contract fee.\24\ VIX transactions are assessed a 
Surcharge Fee/Index License of $0.10 ($0.00 for capacity codes F and L 
for VIX transactions where the VIX Premium is <= $0.10 and the related 
series has an expiration of seven (7) calendar days or less).\25\ 
Similarly, Nasdaq ISE, LLC (``ISE'') charges all market participants, 
except priority customers, a $0.75 per contract fee for all regular 
orders in NDX Index options.\26\ For complex orders in NDX Index 
options, ISE, similar to the Exchange, charges a different Maker fee 
depending on whether the contra-side is a priority customer or not. For 
complex orders in NDX Index options, ISE charges a Maker fee of $0.20 
per contract for all market participants, except priority customers, 
when trading contra to origins that are not priority customer.\27\ For 
complex orders in NDX Index options when trading contra to priority 
customer, ISE charges a Maker fee of $0.86 per contract to market 
makers and $0.88 per contract to all other market participants, except 
priority customers.\28\ Further, for complex orders in NDX Index 
options, ISE charges a Taker fee of $0.86 per contract for market 
makers and $0.88 per contract for all other market participants, except 
priority customers.\29\
---------------------------------------------------------------------------

    \21\ ``VIX'' refers to options on the The Cboe Volatility Index 
(the ``VIX Index''). The VIX Index is an up-to-the-minute market 
estimate of expected volatility that is calculated by using real-
time S&P 500[supreg] Index (``SPX'') option bid/ask quotes. See VIX 
Options Product Specifications, available at https://www.cboe.com/tradable_products/vix/vix_options/specifications/ (last visited July 
25, 2022).
    \22\ See Cboe Fee Schedule, Rate Table--Underlying Symbol List 
A, Page 2, available at https://www.cboe.com/us/options/membership/fee_schedule/cone/ (last visited July 25, 2022).
    \23\ See id.
    \24\ See id.
    \25\ See id. The Exchange notes that it is continuing to waive 
the ``Index License Surcharge'' for SPIKES options of $0.075 per 
contract. See Fee Schedule, Section (1)(b)(i), note ``#''.
    \26\ See ISE Fee Schedule, Options 7 Pricing schedule, Section 
5. Index Options Fees and Rebates, Section A, NDX Index Options Fees 
for Regular Orders, available at https://listingcenter.nasdaq.com/rulebook/ise/rules/ISE%20Options%207 (last visited July 25, 2022).
    \27\ See id., Section 4. Complex Order Fees and Rebates.
    \28\ See id.
    \29\ See id.
---------------------------------------------------------------------------

Routing EEM Rebate Program
    The Exchange believes the proposal to adopt the Routing EEM Rebate 
Program is reasonable, equitably allocated and not unfairly 
discriminatory because it would apply equally to all of the Exchange's 
EEMs that send Priority Customer SPIKES options orders to the Exchange. 
The Exchange believes the Routing EEM Rebate Program is reasonable 
because it is designed to incentivize increased SPIKES options order 
flow, which should strengthen the market quality for SPIKES options for 
all market participants, leading to more trading opportunities and 
tighter spreads. To the extent Priority Customer SPIKES options order 
flow is increased by the proposal, market participants will 
increasingly compete for the opportunity to trade on the Exchange 
including sending more orders and providing narrower and larger-sized 
quotations in the effort to trade with such Priority Customer order 
flow.
Removal of Market Turner Incentive Program
    The Exchange believes that the proposed change to discontinue the 
Market Turner Incentive Program and remove that language from the Fee 
Schedule is reasonable, equitable and not unfairly discriminatory 
because the elimination of the Market Turner Incentive Program will 
uniformly apply to all Market Makers in SPIKES options. The Exchange 
initially adopted the Market Turner Incentive Program to attract 
additional market makers (both existing MIAX Market Makers as well as 
non-members to join MIAX) to quote in SPIKES options. The Exchange 
believes that the Market Turner Incentive Program is no longer 
necessary and that the Exchange's fees and rebates for transactions in 
SPIKES options will continue to strengthen the market quality for all 
market participants in SPIKES options.
Contra-Side and Responder Fee Increases in PRIME and cPRIME Auctions 
for SPIKES Options
    The Exchange believes that the proposed increases to contra-side 
and responder fees for SPIKES options in PRIME and cPRIME are equitable 
and not unfairly discriminatory because the proposed fees will apply 
equally to all origins. The Exchange believes that the application of 
these fees are equitable and not unfairly discriminatory because the 
fees are identical for all market participants for contra-side orders 
or for market participants that respond to PRIME and cPRIME Auctions 
for SPIKES options orders.
    The Exchange believes its proposal to amend its contra-side and 
responder fees for all origins in PRIME and cPRIME Auctions for SPIKES 
options is reasonable, equitably allocated and not unfairly 
discriminatory because these changes are for business and competitive 
reasons. In order to attract SPIKES options order flow, the Exchange 
initially set low fees for contra-side and responders for its PRIME and 
cPRIME Auctions for SPIKES options. The Exchange now believes that it 
is appropriate to increase these fees but believes they will remain 
competitive and should enable the Exchange to continue to attract 
SPIKES options order flow to PRIME and cPRIME Auctions.
    The Exchange also believes the proposed contra-side and responder 
fees are similar to fees charged by competing options exchanges in 
singly-listed products. The Exchange notes that Cboe assesses Automated 
Improvement Mechanism (``AIM'') \30\ contra-side fees to Customers for 
VIX transactions based on tiered premium price, which ranges from base 
prices of $0.10 to $0.45 per contract and complex order fees based on 
tiered premium price which ranges from base prices of $0.05 to $0.45 
per contract.\31\ Cboe Options Market-Makers/DPMs/LMMs are assessed VIX 
AIM contra-side fees based on tiered premium price, which ranges from 
$0.05 to $0.23 per contract. Joint Back Office, Non-Trading Permit 
Holder Market Makers, and Professionals are assessed a VIX AIM contra-
side fee $0.40 per contract fee.\32\ In addition, Cboe assesses a 
variety of surcharges for VIX transactions, including an AIM Agency/
Primary Surcharge fee of $0.04

[[Page 50661]]

per contract.\33\ Similarly, ISE charges all market participants, 
except priority customers, a $0.75 per contract fee for all originating 
and contra side of Crossing Orders and Responses to Crossing Orders in 
NDX Index options.\34\ Accordingly, the Exchange believes the proposed 
changes to contra-side and responder fees for transactions in SPIKES 
options in PRIME and cPRIME are similar to fees charged by competing 
options exchanges in singly-listed competing products.
---------------------------------------------------------------------------

    \30\ See Cboe Rule 5.37.
    \31\ See supra note 22.
    \32\ See id.
    \33\ See id.
    \34\ See supra note 26.
---------------------------------------------------------------------------

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 changes will 
impose any burden on intra-market competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
believes that the proposed changes will enhance the competitiveness of 
the Exchange relative to other exchanges that offer their own singly-
listed products. The Exchange notes that there are other volatility 
products available today on other options markets, such as VIX and 
VOLQ,\35\ which allow investors to gauge volatility. As noted above, 
the Exchange believes that the proposed pricing for transactions in 
SPIKES options is comparable to and within the range of fees and 
rebates charged by the Exchange's competitors offering singly-listed 
products.\36\ In sum, if the changes proposed herein are unattractive 
to market participants, it is likely that the Exchange will receive no 
market share as a result. The Exchange believes that the proposed 
changes to the fees and rebates for transactions in SPIKES options are 
not going to have an impact on intra-market competition based on the 
total cost for participants to transact in such order types versus the 
cost for participants to transact in other order types available for 
trading on the Exchange.
---------------------------------------------------------------------------

    \35\ ``VOLQ'' refers to options on the Nasdaq-100[supreg] 
volatility Index (the ``VOLQ Index''). The VOLQ Index measures 
changes in 30-day implied volatility as expressed by options on the 
Nasdaq-100[supreg] Index (``NDX''), a modified market 
capitalization- weighted index composed of securities issued by 100 
of the largest non-financial companies listed on The Nasdaq Stock 
Market LLC. See Nasdaq-100[supreg] Volatility Index Option 
Description, available at https://indexes.nasdaqomx.com/Index/Overview/VOLQ (last visited July 25, 2022).
    \36\ See supra notes 22 and 26.
---------------------------------------------------------------------------

Inter-Market Competition
    The Exchange does not believe that the proposed rule changes will 
impose any burden on inter-market competition that is not necessary or 
appropriate in furtherance of the purposes of 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 to remain competitive with 
other exchanges and to attract order flow to the Exchange. The Exchange 
believes that the proposed rule change reflects this competitive 
environment because it is adjusting its fees in a manner that 
encourages market participants to provide liquidity in SPIKES options, 
and to attract additional transaction volume to the Exchange.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act,\37\ and Rule 19b-4(f)(2) \38\ 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.
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \38\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MIAX-2022-27 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-MIAX-2022-27. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-MIAX-2022-27 and should be submitted on 
or before September 7, 2022.
---------------------------------------------------------------------------

    \39\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\39\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-17668 Filed 8-16-22; 8:45 am]
BILLING CODE 8011-01-P


