82 FR 11670 - 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 Clarify Its Fees Relating to the MIAX Express Network Interconnect (“MENI”)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 36 (February 24, 2017)

Page Range		11670-11673
FR Document		2017-03575
Federal Register, Volume 82 Issue 36 (Friday, February 24, 2017)
[Federal Register Volume 82, Number 36 (Friday, February 24, 2017)]
[Notices]
[Pages 11670-11673]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-03575]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80062; File No. SR-MIAX-2017-05]


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 Clarify Its Fees 
Relating to the MIAX Express Network Interconnect (``MENI'')

February 17, 2017.
    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 13, 2017, Miami International 
Securities Exchange LLC (``MIAX Options'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') a proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by the Exchange. The Commission is publishing this

[[Page 11671]]

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 the 
Substance of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Options Fee 
Schedule (the ``Fee Schedule'').
    The text of the proposed rule change is available on the Exchange's 
Web site 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 its Fee Schedule to provide a 
definition of the MIAX Express Network Interconnect (``MENI'') and that 
any Member \3\ or non-Member using the MENI to access the Exchange's 
System \4\ and the automated trading system of MIAX PEARL, LLC (``MIAX 
PEARL''), the Exchange's affiliate (the ``MIAX PEARL System'') will 
only be assessed one network connectivity fee per such connection, 
regardless of the trading platforms, market data systems, test systems, 
and disaster recovery facilities of the Exchange and MIAX PEARL 
accessed via such connection, as more fully described below. \5\
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    \3\ 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 
Exchange Rule 100.
    \4\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
    \5\ The Exchange notes that MIAX PEARL has filed with the 
Commission a proposed rule change to adopt similar clarifying rules 
in connection with the establishment of its proposed fee schedule. 
See SR-PEARL-2017-10 filed on February 13, 2017 at 
www.miaxoptions.com.
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    The Exchange provides to Members and non-Members a network 
infrastructure pursuant to which such Members and non-Members establish 
connectivity to the trading platforms, market data systems, test 
systems, and disaster recovery facilities of the Exchange. The Exchange 
refers to this network infrastructure as the MIAX Express Network 
Interconnect, or the MENI. The MENI consists of the low latency and 
ultra-low latency (``ULL'') connectivity options set forth in the 
Exchange's Fee Schedule. The MENI also provides members and non-members 
of MIAX PEARL network connectivity to the trading platforms, market 
data systems, test systems, and disaster recovery facilities of MIAX 
PEARL. Further, for Members and non-Members of the Exchange that wish 
to establish connectivity to both the Exchange and MIAX PEARL, the MENI 
can be configured to provide such Members and non-Members of the 
Exchange network connectivity to the trading platforms, market data 
systems, test systems, and disaster recovery facilities of both the 
Exchange and MIAX PEARL, via a single, shared connection.
    Accordingly, the Exchange is proposing to clarify that, when a 
Member or non-Member of the Exchange establishes network connectivity 
to the trading platforms, market data systems, test systems, and 
disaster recovery facilities of both the Exchange and MIAX PEARL, via a 
single, shared connection, for purposes of: (i) Section 4) of the 
Exchange's Fee Schedule, the Member or non-Member will only be assessed 
one Network Connectivity Testing and Certification Fee per connection 
tested, regardless of the trading platforms, market data systems, test 
systems, and disaster recovery facilities accessed via such connection, 
and (ii) Section 5) of the Exchange's Fee Schedule, the Member or non-
Member will only be assessed one Network Connectivity Fee per 
connection, regardless of the trading platforms, market data systems, 
test systems, and disaster recovery facilities accessed via such 
connection.
    In particular, regarding Network Connectivity Testing and 
Certification, new users of the Exchange's System (and existing users 
of the System that seek to change connectivity options) require testing 
and certification prior to actual use in the production environment, 
and are assessed fees for such testing and certification as are 
specified in the Exchange's Fee Schedule. Accordingly, the Exchange now 
proposes to amend Section 4)c) of the Fee Schedule to provide that 
Members utilizing the MENI to connect to the trading platforms, market 
data systems, test systems, and disaster recovery facilities of the 
Exchange and MIAX PEARL via a single, shared connection will only be 
assessed one Network Connectivity Testing and Certification Fee per 
connection tested, regardless of the trading platforms, market data 
systems, test systems, and disaster recovery facilities accessed via 
such connection. Further, the Exchange similarly proposes to amend 
Section 4)d) of the Fee Schedule to provide that non-Members utilizing 
the MENI to connect to the trading platforms, market data systems, test 
systems, and disaster recovery facilities of the Exchange and MIAX 
PEARL via a single, shared connection will only be assessed one Network 
Connectivity Testing and Certification Fee per connection tested, 
regardless of the trading platforms, market data systems, test systems, 
and disaster recovery facilities accessed via such connection.
    Regarding System Network Connectivity Fees, Members and non-Members 
of the Exchange are assessed fees for connectivity to the Exchange as 
is set forth in the Fee Schedule, depending on the connection size 
(e.g., 1 Gigabit, 10 Gigabit, 10 Gigabit ULL) and facility site (e.g., 
primary/secondary facility, disaster recovery facility). Accordingly, 
the Exchange now proposes to amend Section 5)a) of the Fee Schedule to 
provide that Members utilizing the MENI to connect to the trading 
platforms, market data systems, test systems, and disaster recovery 
facilities of the Exchange and MIAX PEARL via a single, shared 
connection will only be assessed one Monthly Member Network 
Connectivity Fee per connection, regardless of the trading platforms, 
market data systems, test systems, and disaster recovery facilities 
accessed via such connection. Further, the Exchange similarly proposes 
to amend Section 5)b) of the Fee Schedule to provide that non-Members 
utilizing the MENI to connect to the trading platforms, market data 
systems, test systems, and disaster recovery facilities of the Exchange 
and MIAX PEARL via a single, shared connection will only be assessed 
one Monthly Non-Member Network Connectivity Fee per connection, 
regardless of the trading platforms, market data systems, test systems, 
and disaster recovery facilities accessed via such connection.
    The proposed rule change is intended to provide greater 
transparency to Members and non-Members of the Exchange regarding how 
network connectivity testing and certification fees and network 
connectivity fees will

[[Page 11672]]

be assessed by the Exchange when Members and non-Members establish 
network connectivity to the Exchange and MIAX PEARL via a single, 
shared network connection by explicitly stating that each such 
connection will only be charged once per connection. The Exchange 
believes that clarifying regarding how network connectivity testing and 
certification fees and network connectivity fees will be assessed by 
the Exchange will benefit all market participants by assisting them in 
the decision-making process to connect to the Exchange and further 
their readiness to use the MIAX PEARL System.

2. Statutory Basis

    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \6\ in general, and furthers the 
objectives of Sections 6(b)(4) of the Act,\7\ in that it is an 
equitable allocation of reasonable fees and other charges among 
Exchange Members and other persons using its facilities, and Section 
6(b)(5) of the Act,\8\ in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, to remove 
impediments to and perfect the mechanisms of a free and open market and 
a national market system and, in general, to protect investors and the 
public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The proposed rule change furthers the objectives of Section 6(b)(4) 
of the Act \9\ because it will apply equally to all Exchange 
participants who test and/or use a single, shared connection to access 
the Exchange and MIAX PEARL. The Exchange believes that assessing all 
Exchange participants only one connectivity fee for each single, shared 
connection to both the Exchange and MIAX PEARL is reasonable, equitable 
and not unfairly discriminatory because it makes the fees consistent 
between the Exchange and MIAX PEARL for use of the MENI to access both 
exchanges.
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    \9\ 15 U.S.C. 78f(b)(4).
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    The proposed rule change is consistent with Section 6(b)(5) of the 
Act,\10\ in that it is designed to protect investors and the public 
interest and to promote just and equitable principles of trade by 
providing greater transparency to Members and non-Members of the 
Exchange regarding how network connectivity testing and certification 
fees and network connectivity fees will be assessed by the Exchange 
when Members and non-Members establish network connectivity to the 
Exchange and MIAX PEARL via a single, shared network connection by 
explicitly stating that each such connection will only be charged once 
per connection.
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    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
believes that the proposed changes would increase both intermarket and 
intramarket competition by defining the assessments of such network 
connectivity testing and certification fees and network connectivity 
fees for all users of the Exchange, thereby creating greater clarity 
around the Exchange's assessment of such fees for participants that 
wish to begin using MIAX PEARL's System through its existing MIAX 
Options' network connection and to continue using the Exchange's 
facilities through the same shared connection, thereby enabling a 
potential user of both systems to assess the competitive nature of the 
fees. This should benefit all market participants and improve 
competition on the Exchange.
    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 proposal will enhance 
competition, because market participants will have more clarity 
surrounding how they will be assessed the network connectivity testing 
and certification fees and network connectivity fees if they desire to 
connect to both the MIAX Options and MIAX PEARL through the MENI and 
will also understand that they will not be double charged for these 
network fees for using the same, shared connections to both exchanges.

B. 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,\11\ and Rule 19b-4(f)(2) \12\ 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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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 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 No. SR-MIAX-2017-05 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 No. SR-MIAX-2017-05. 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 Web site (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 Web site viewing and 
printing in the Commission's Public

[[Page 11673]]

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 
such filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File No. SR-MIAX-2017-05, and should be submitted on or before March 
17, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-03575 Filed 2-23-17; 8:45 am]
 BILLING CODE 8011-01-P
11670 Federal Register / Vol. 82, No. 36 / Friday, February 24, 2017 / Notices

Order is contra to other than the organization will be eligible to eliminate amendments, all written statements
Initiating Order, the PIXL Order will the Initiating Order Fee for Professional, with respect to the proposed rule
continue to be assessed $0.00 per Firm, Broker-Dealer, Specialist and change that are filed with the
contract, unless the order is a Customer, Market Maker orders that are contra to Commission, and all written
in which case the Customer will receive a Customer PIXL Order if the Customer communications relating to the
an increased rebate of $0.40 per contract PIXL Order is greater than 399 contracts. proposed rule change between the
does not impose an undue burden on Commission and any person, other than
intra-market competition because the C. Self-Regulatory Organization’s those that may be withheld from the
Exchange will uniformly pay this rebate. Statement on Comments on the public in accordance with the
The Exchange’s proposal to amend Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be
the SPY PIXL pricing so that all other Members, Participants, or Others available for Web site viewing and
Non-Customer contra parties to the PIXL No written comments were either printing in the Commission’s Public
Order, other than the Initiating Order, solicited or received. Reference Room, 100 F Street NE.,
will be assessed an increased Fee for Washington, DC 20549, on official
Removing Liquidity of $0.50 per III. Date of Effectiveness of the
business days between the hours of
contract or will receive the Rebate for Proposed Rule Change and Timing for
10:00 a.m. and 3:00 p.m. Copies of the
Adding Liquidity does not impose an Commission Action
filing also will be available for
undue burden on intra-market The foregoing rule change has become inspection and copying at the principal
competition because the Exchange will effective pursuant to Section office of the Exchange. All comments
uniformly assess the increased Fee for 19(b)(3)(A)(ii) of the Act.29 At any time received will be posted without change;
Removing Liquidity to all applicable within 60 days of the filing of the the Commission does not edit personal
members and member organizations. proposed rule change, the Commission identifying information from
The Exchange’s proposal to not offer summarily may temporarily suspend submissions. You should submit only
a rebate when the PIXL Order is contra such rule change if it appears to the information that you wish to make
to a Specialist or Market Maker quote, Commission that such action is: (i) available publicly. All submissions
which was established at the initiation Necessary or appropriate in the public should refer to File Number SR–Phlx–
of a PIXL auction, the Customer PIXL interest; (ii) for the protection of 2017–15 and should be submitted on or
Order does not impose an undue burden investors; or (iii) otherwise in before March 17, 2017.
on intra-market competition. The furtherance of the purposes of the Act. For the Commission, by the Division of
Exchange will uniformly not offer a If the Commission takes such action, the Trading and Markets, pursuant to delegated
rebate to any member or member Commission shall institute proceedings authority.30
organization when the PIXL Order is to determine whether the proposed rule Eduardo A. Aleman,
contra to a Specialist or Market Maker should be approved or disapproved. Assistant Secretary.
quote, which was established at the
IV. Solicitation of Comments [FR Doc. 2017–03576 Filed 2–23–17; 8:45 am]
initiation of a PIXL auction.
BILLING CODE 8011–01–P
Proposed Amendments to Section IV, Interested persons are invited to
Part A: PIXL Pricing submit written data, views, and
arguments concerning the foregoing, SECURITIES AND EXCHANGE
The Exchange’s proposal that if the including whether the proposed rule
member or member organization COMMISSION
change is consistent with the Act.
qualifies for the Tier 3, 4 or 5 Customer Comments may be submitted by any of [Release No. 34–80062; File No. SR–MIAX–
Rebate in Section B the member or the following methods: 2017–05]
member organization will be assessed
$0.05 per contract, instead of the $0.07 Electronic Comments Self-Regulatory Organizations; Miami
per contract Initiating Order fee does • Use the Commission’s Internet International Securities Exchange LLC;
not impose an undue burden on intra- comment form (http://www.sec.gov/ Notice of Filing and Immediate
market competition because the Effectiveness of a Proposed Rule
rules/sro.shtml); or
Exchange will assess the fee in a • Send an email to rule-comments@ Change To Amend Its Fee Schedule To
uniform manner to all applicable sec.gov. Please include File Number SR– Clarify Its Fees Relating to the MIAX
members and member organizations. Express Network Interconnect
Phlx–2017–15 on the subject line.
The Exchange’s proposal to no longer (‘‘MENI’’)
offer the ability to not be assessed an Paper Comments
February 17, 2017.
Initiating Order Fee for Professional, • Send paper comments in triplicate Pursuant to the provisions of Section
Firm, Broker-Dealer, Specialist and to Secretary, Securities and Exchange 19(b)(1) of the Securities Exchange Act
Market Maker orders that are contra to Commission, 100 F Street NE., of 1934 (‘‘Act’’) 1 and Rule 19b–4
a Customer PIXL Order if the Customer Washington, DC 20549–1090. thereunder,2 notice is hereby given that
PIXL Order is greater than 399 contracts All submissions should refer to File on February 13, 2017, Miami
and instead replace this offer with a Number SR–Phlx–2017–15. This file International Securities Exchange LLC
rebate to attract more liquidity for PIXL number should be included on the (‘‘MIAX Options’’ or ‘‘Exchange’’) filed
SPY Complex Orders similar to subject line if email is used. To help the with the Securities and Exchange
proposed SPY PIXL pricing does not Commission process and review your
asabaliauskas on DSK3SPTVN1PROD with NOTICES

Commission (‘‘Commission’’) a
impose an undue burden on intra- comments more efficiently, please use proposed rule change as described in
market competition. All members and only one method. The Commission will Items I, II, and III below, which Items
member organizations are eligible for post all comments on the Commission’s have been prepared by the Exchange.
the proposed rebate, provide they met Internet Web site (http://www.sec.gov/ The Commission is publishing this
the requisite qualifications. Members rules/sro.shtml). Copies of the
and member organizations would be submission, all subsequent 30 17 CFR 200.30–3(a)(12).
uniformly paid the rebate, provided 1 15 U.S.C. 78s(b)(1).
they qualify. No member or member 29 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 CFR 240.19b–4.

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notice to solicit comments on the The Exchange provides to Members Members utilizing the MENI to connect
proposed rule change from interested and non-Members a network to the trading platforms, market data
persons. infrastructure pursuant to which such systems, test systems, and disaster
Members and non-Members establish recovery facilities of the Exchange and
I. Self-Regulatory Organization’s
connectivity to the trading platforms, MIAX PEARL via a single, shared
Statement of the Terms of the Substance
market data systems, test systems, and connection will only be assessed one
of the Proposed Rule Change
disaster recovery facilities of the Network Connectivity Testing and
The Exchange is filing a proposal to Exchange. The Exchange refers to this Certification Fee per connection tested,
amend the MIAX Options Fee Schedule network infrastructure as the MIAX regardless of the trading platforms,
(the ‘‘Fee Schedule’’). Express Network Interconnect, or the market data systems, test systems, and
The text of the proposed rule change MENI. The MENI consists of the low disaster recovery facilities accessed via
is available on the Exchange’s Web site latency and ultra-low latency (‘‘ULL’’) such connection. Further, the Exchange
at http://www.miaxoptions.com/rule- connectivity options set forth in the similarly proposes to amend Section
filings, at MIAX’s principal office, and Exchange’s Fee Schedule. The MENI 4)d) of the Fee Schedule to provide that
at the Commission’s Public Reference also provides members and non- non-Members utilizing the MENI to
Room. members of MIAX PEARL network connect to the trading platforms, market
II. Self-Regulatory Organization’s connectivity to the trading platforms, data systems, test systems, and disaster
Statement of the Purpose of, and market data systems, test systems, and recovery facilities of the Exchange and
Statutory Basis for, the Proposed Rule disaster recovery facilities of MIAX MIAX PEARL via a single, shared
Change PEARL. Further, for Members and non- connection will only be assessed one
Members of the Exchange that wish to Network Connectivity Testing and
In its filing with the Commission, the establish connectivity to both the Certification Fee per connection tested,
Exchange included statements Exchange and MIAX PEARL, the MENI regardless of the trading platforms,
concerning the purpose of and basis for can be configured to provide such market data systems, test systems, and
the proposed rule change and discussed Members and non-Members of the disaster recovery facilities accessed via
any comments it received on the Exchange network connectivity to the such connection.
proposed rule change. The text of these trading platforms, market data systems, Regarding System Network
statements may be examined at the test systems, and disaster recovery Connectivity Fees, Members and non-
places specified in Item IV below. The facilities of both the Exchange and Members of the Exchange are assessed
Exchange has prepared summaries, set MIAX PEARL, via a single, shared fees for connectivity to the Exchange as
forth in sections A, B, and C below, of connection. is set forth in the Fee Schedule,
the most significant aspects of such Accordingly, the Exchange is depending on the connection size (e.g.,
statements. proposing to clarify that, when a 1 Gigabit, 10 Gigabit, 10 Gigabit ULL)
A. Self-Regulatory Organization’s Member or non-Member of the and facility site (e.g., primary/secondary
Statement of the Purpose of, and Exchange establishes network facility, disaster recovery facility).
Statutory Basis for, the Proposed Rule connectivity to the trading platforms, Accordingly, the Exchange now
Change market data systems, test systems, and proposes to amend Section 5)a) of the
disaster recovery facilities of both the Fee Schedule to provide that Members
1. Purpose Exchange and MIAX PEARL, via a utilizing the MENI to connect to the
The Exchange proposes to amend its single, shared connection, for purposes trading platforms, market data systems,
Fee Schedule to provide a definition of of: (i) Section 4) of the Exchange’s Fee test systems, and disaster recovery
the MIAX Express Network Interconnect Schedule, the Member or non-Member facilities of the Exchange and MIAX
(‘‘MENI’’) and that any Member 3 or will only be assessed one Network PEARL via a single, shared connection
non-Member using the MENI to access Connectivity Testing and Certification will only be assessed one Monthly
the Exchange’s System 4 and the Fee per connection tested, regardless of Member Network Connectivity Fee per
automated trading system of MIAX the trading platforms, market data connection, regardless of the trading
PEARL, LLC (‘‘MIAX PEARL’’), the systems, test systems, and disaster platforms, market data systems, test
Exchange’s affiliate (the ‘‘MIAX PEARL recovery facilities accessed via such systems, and disaster recovery facilities
System’’) will only be assessed one connection, and (ii) Section 5) of the accessed via such connection. Further,
network connectivity fee per such Exchange’s Fee Schedule, the Member the Exchange similarly proposes to
connection, regardless of the trading or non-Member will only be assessed amend Section 5)b) of the Fee Schedule
platforms, market data systems, test one Network Connectivity Fee per to provide that non-Members utilizing
systems, and disaster recovery facilities connection, regardless of the trading the MENI to connect to the trading
of the Exchange and MIAX PEARL platforms, market data systems, test platforms, market data systems, test
accessed via such connection, as more systems, and disaster recovery facilities systems, and disaster recovery facilities
fully described below. 5 accessed via such connection. of the Exchange and MIAX PEARL via
In particular, regarding Network a single, shared connection will only be
3 The term ‘‘Member’’ means an individual or Connectivity Testing and Certification, assessed one Monthly Non-Member
organization approved to exercise the trading rights new users of the Exchange’s System Network Connectivity Fee per
associated with a Trading Permit. Members are (and existing users of the System that connection, regardless of the trading
deemed ‘‘members’’ under the Exchange Act. See seek to change connectivity options)
asabaliauskas on DSK3SPTVN1PROD with NOTICES

platforms, market data systems, test
Exchange Rule 100.
4 The term ‘‘System’’ means the automated
require testing and certification prior to systems, and disaster recovery facilities
trading system used by the Exchange for the trading actual use in the production accessed via such connection.
of securities. See Exchange Rule 100. environment, and are assessed fees for The proposed rule change is intended
5 The Exchange notes that MIAX PEARL has filed such testing and certification as are to provide greater transparency to
with the Commission a proposed rule change to specified in the Exchange’s Fee Members and non-Members of the
adopt similar clarifying rules in connection with
the establishment of its proposed fee schedule. See
Schedule. Accordingly, the Exchange Exchange regarding how network
SR–PEARL–2017–10 filed on February 13, 2017 at now proposes to amend Section 4)c) of connectivity testing and certification
www.miaxoptions.com. the Fee Schedule to provide that fees and network connectivity fees will

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be assessed by the Exchange when fees and network connectivity fees will III. Date of Effectiveness of the
Members and non-Members establish be assessed by the Exchange when Proposed Rule Change and Timing for
network connectivity to the Exchange Members and non-Members establish Commission Action
and MIAX PEARL via a single, shared network connectivity to the Exchange The foregoing rule change has become
network connection by explicitly stating and MIAX PEARL via a single, shared effective pursuant to Section
that each such connection will only be network connection by explicitly stating 19(b)(3)(A)(ii) of the Act,11 and Rule
charged once per connection. The that each such connection will only be 19b–4(f)(2) 12 thereunder. At any time
Exchange believes that clarifying charged once per connection. within 60 days of the filing of the
regarding how network connectivity proposed rule change, the Commission
testing and certification fees and B. Self-Regulatory Organization’s
summarily may temporarily suspend
network connectivity fees will be Statement on Burden on Competition such rule change if it appears to the
assessed by the Exchange will benefit all Commission that such action is
The Exchange does not believe that
market participants by assisting them in necessary or appropriate in the public
the decision-making process to connect the proposed rule change will result in
any burden on competition that is not interest, for the protection of investors,
to the Exchange and further their or otherwise in furtherance of the
readiness to use the MIAX PEARL necessary or appropriate in furtherance
purposes of the Act. If the Commission
System. of the purposes of the Act. The
takes such action, the Commission shall
Exchange believes that the proposed
2. Statutory Basis institute proceedings to determine
changes would increase both
whether the proposed rule should be
The Exchange believes that its intermarket and intramarket approved or disapproved.
proposed rule change is consistent with competition by defining the assessments
Section 6(b) of the Act 6 in general, and of such network connectivity testing IV. Solicitation of Comments
furthers the objectives of Sections and certification fees and network Interested persons are invited to
6(b)(4) of the Act,7 in that it is an connectivity fees for all users of the submit written data, views, and
equitable allocation of reasonable fees Exchange, thereby creating greater arguments concerning the foregoing,
and other charges among Exchange clarity around the Exchange’s including whether the proposed rule
Members and other persons using its assessment of such fees for participants change is consistent with the Act.
facilities, and Section 6(b)(5) of the that wish to begin using MIAX PEARL’s Comments may be submitted by any of
Act,8 in that it is designed to prevent System through its existing MIAX the following methods:
fraudulent and manipulative acts and Options’ network connection and to Electronic Comments
practices, to promote just and equitable continue using the Exchange’s facilities
principles of trade, to foster cooperation through the same shared connection, • Use the Commission’s Internet
and coordination with persons engaged thereby enabling a potential user of both comment form (http://www.sec.gov/
in facilitating transactions in securities, systems to assess the competitive nature rules/sro.shtml); or
to remove impediments to and perfect of the fees. This should benefit all • Send an email to rule-comments@
the mechanisms of a free and open sec.gov. Please include File No. SR–
market participants and improve
market and a national market system MIAX–2017–05 on the subject line.
competition on the Exchange.
and, in general, to protect investors and Paper Comments
the public interest. The Exchange notes that it operates in
The proposed rule change furthers the a highly competitive market in which • Send paper comments in triplicate
objectives of Section 6(b)(4) of the Act 9 market participants can readily favor to Secretary, Securities and Exchange
because it will apply equally to all competing venues if they deem fee Commission, 100 F Street NE.,
Exchange participants who test and/or levels at a particular venue to be Washington, DC 20549–1090.
use a single, shared connection to access excessive. In such an environment, the All submissions should refer to File No.
the Exchange and MIAX PEARL. The Exchange must continually adjust its SR–MIAX–2017–05. This file number
Exchange believes that assessing all fees to remain competitive with other should be included on the subject line
Exchange participants only one exchanges and to attract order flow to if email is used. To help the
connectivity fee for each single, shared the Exchange. The Exchange believes Commission process and review your
connection to both the Exchange and that the proposal will enhance comments more efficiently, please use
MIAX PEARL is reasonable, equitable competition, because market only one method. The Commission will
and not unfairly discriminatory because participants will have more clarity post all comments on the Commission’s
it makes the fees consistent between the surrounding how they will be assessed Internet Web site (http://www.sec.gov/
Exchange and MIAX PEARL for use of the network connectivity testing and rules/sro.shtml). Copies of the
the MENI to access both exchanges. certification fees and network submission, all subsequent
The proposed rule change is connectivity fees if they desire to amendments, all written statements
consistent with Section 6(b)(5) of the connect to both the MIAX Options and with respect to the proposed rule
Act,10 in that it is designed to protect MIAX PEARL through the MENI and change that are filed with the
investors and the public interest and to will also understand that they will not Commission, and all written
promote just and equitable principles of be double charged for these network communications relating to the
trade by providing greater transparency fees for using the same, shared proposed rule change between the
asabaliauskas on DSK3SPTVN1PROD with NOTICES

to Members and non-Members of the Commission and any person, other than
connections to both exchanges.
Exchange regarding how network those that may be withheld from the
connectivity testing and certification B. Self-Regulatory Organization’s public in accordance with the
Statement on Comments on the provisions of 5 U.S.C. 552, will be
6 15 U.S.C. 78f(b). Proposed Rule Change Received From available for Web site viewing and
7 15 U.S.C. 78f(b)(4). Members, Participants, or Others printing in the Commission’s Public
8 15 U.S.C. 78f(b)(5).
9 15 U.S.C. 78f(b)(4). Written comments were neither 11 15 U.S.C. 78s(b)(3)(A)(ii).
10 15 U.S.C. 78f(b)(5). solicited nor received. 12 17 CFR 240.19b–4(f)(2).

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Federal Register / Vol. 82, No. 36 / Friday, February 24, 2017 / Notices 11673

Reference Room, 100 F Street NE., third-Friday of the month (‘‘third- participants.12 Specifically, the
Washington, DC 20549 on official Friday’’), currently listed in a separate Exchange noted that it expects a smooth
business days between the hours of class and trading under the symbol transition of the SPXPM series to the
10:00 a.m. and 3:00 p.m. Copies of such ‘‘SPXPM’’, to the Hybrid 3.0 S&P 500 SPXW symbol because SPXPM and
filing also will be available for Index options class. In connection with SPXW options both trade on the Hybrid
inspection and copying at the principal the move, the Exchange proposes Trading System 13 and the Exchange’s
office of the Exchange. All comments changing the trading symbol for these rules and systems treat SPXPM and
received will be posted without change; options from ‘‘SPXPM’’ to ‘‘SPXW.’’ SPXW the same in many respects.14
the Commission does not edit personal The Exchange currently lists A.M.- Pilot Reports
identifying information from settled 4 and P.M.-settled 5 S&P 500
submissions. You should submit only Index options that have standard third- SPXPM options currently are
information that you wish to make Friday expirations. Third-Friday A.M.- approved for listing and trading on a
available publicly. All submissions settled S&P 500 Index options trade pilot basis.15 The Exchange represents
should refer to File No. SR–MIAX– under the symbol ‘‘SPX’’ on the that the pilot will continue under the
2017–05, and should be submitted on or Exchange’s Hybrid 3.0 platform.6 Third- same terms that established the pilot.16
before March 17, 2017. Friday P.M.-settled S&P 500 Index III. Discussion and Commission
For the Commission, by the Division of options trade on the Hybrid Trading Findings
Trading and Markets, pursuant to delegated System in a separate options class under
authority.13
After careful review, the Commission
the symbol ‘‘SPXPM’’.7
finds that the proposed rule change is
Eduardo A. Aleman, In addition, the Hybrid 3.0 options
consistent with the requirements of the
Assistant Secretary. class also includes nonstandard P.M.-
Act 17 and the rules and regulations
[FR Doc. 2017–03575 Filed 2–23–17; 8:45 am] settled S&P 500 Index options trading thereunder applicable to a national
BILLING CODE 8011–01–P under the symbol ‘‘SPXW,’’ which may securities exchange.18 In particular, the
expire on Mondays, Wednesdays, Commission finds that the proposed
Fridays (other than the third-Friday-of- rule change is consistent with Section
SECURITIES AND EXCHANGE the-month) (i.e., nonstandard weekly 6(b)(5) of the Act, 19 which requires,
COMMISSION expirations pursuant to Rule 24.9(e)), among other things, that the rules of a
and the last trading day of the month.8 national securities exchange be
[Release No. 34–80060; File No. SR–CBOE–
2016–091] Although SPXW options are included in designed to remove impediments to and
the Hybrid 3.0 class, they trade on the perfect the mechanism of a free and
Self-Regulatory Organizations; Hybrid Trading System.9 open market and a national market
Chicago Board Options Exchange, In its filing, the Exchange noted that system, and, in general, to protect
Incorporated; Order Approving a a gap exists currently in Friday investors and the public interest.
Proposed Rule Change Related to a expirations for SPXW as a user of SPXW The Exchange represents that trading
Change to the Trading Symbol for options cannot roll an existing SPXW P.M.-settled third-Friday expirations as
P.M.-Settled Options on the Standard & position that expires on a first or second part of the S&P 500 Index options class
Poor’s 500 Index Friday of a month into a SPXW position under the SPXW symbol, rather than as
that expires on a third-Friday, because a separate class under the SPXPM
February 17, 2017. the latter is part of the separate SPXPM symbol, will help remove impediments
I. Introduction class.10 Moving SPXPM into the SPX to and perfect the mechanism of a free
class under symbol SPXW will remove and open market by providing market
On December 16, 2016, Chicago Board
Options Exchange, Incorporated (the this gap and allow market participants participants with access to a single class
‘‘Exchange’’ or ‘‘CBOE’’) filed with the to maintain exposure to SPXW Friday
Securities and Exchange Commission expirations throughout the month if 12 See id.
(‘‘Commission’’), pursuant to Section they so choose. The Exchange also 13 See Rules 8.3(c)(i) (identifying P.M.-settled
19(b)(1) of the Securities Exchange Act noted that offering access to all P.M.- third-Friday S&P Index options as a Tier AA Hybrid
settled S&P 500 Index options in a Options Class) and 8.14.01 (allowing the Exchange
of 1934 (‘‘Act’’) 1 and Rule 19b–4 to authorize a group of series of a class for trading
thereunder,2 a proposed rule change single class with expirations every on the Hybrid Trading System).
amending CBOE’s rules related to P.M.- Friday of the month will provide market 14 See Notice, supra note 3, at 1384–85

settled options on the Standard & Poor’s participants with greater flexibility in (discussing areas where trading parameters for
500 Index (‘‘S&P 500 Index’’). The submitting complex orders using S&P SPXPM and SPXW are the same, such as the
500 index options.11 minimum increment for bids and offers, and where
proposed rule change was published for they differ, such as the appointment costs).
comment in the Federal Register on In its filing, the Exchange noted its 15 See Rule 24.9.14 and Securities Exchange Act

January 5, 2017.3 The Commission belief that moving SPXPM into the SPX Release No. 68457 (December 18, 2012), 77 FR
received no comment letters on the options class under the symbol SPXW 76135 (December 26, 2012) (SR–CBOE–2012–120).
proposed rule change. This order should not adversely impact market 16 See Notice, supra note 3, at 1385. As part of

the pilot, the Exchange submits quarterly reports
approves the proposed rule change. 4 See Rule 24.9(a)(4)(i) (A.M.-settled index and annual reports that analyze the market impact
and trading patterns of third-Friday P.M.-settled
II. Description of the Proposed Rule options).
S&P 500 options. The Exchange will modify the
5 See Rule 24.9.14 (authorizing the Exchange to
Change reports to provide the same data and analysis for
asabaliauskas on DSK3SPTVN1PROD with NOTICES

list P.M.-settled S&P 500 options for a specified third-Friday P.M.-settled S&P 500 Index options
CBOE proposes to move P.M.-settled pilot period). trading under symbol SPXW that it currently
S&P 500 Index options expiring on the 6 See Rule 8.3(c)(iii).
submits for third-Friday P.M.-settled S&P 500 Index
7 See Rule 8.3(c)(i) (identifying P.M.-settled third-
options trading under symbol SPXPM. See id.
13 17 CFR 200.30–3(a)(12). Friday S&P 500 options as a Tier AA Hybrid 17 15 U.S.C. 78f.
1 15 U.S.C. 78s(b)(1). Options Class). 18 In approving this proposed rule change, the
8 See Rule 24.9(e).
2 17 CFR 240.19b–4. Commission has considered the proposed rule’s
9 See Rule 8.14.01.
3 See Securities Exchange Act Release No. 79712 impact on efficiency, competition, and capital
10 See Notice, supra note 3, at 1384. formation. See 15 U.S.C. 78c(f).
(December 29, 2016), 82 FR 1383 (January 5, 2017)
(‘‘Notice’’). 11 See id. 19 15 U.S.C. 78f(b)(5).

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Document Created: 2017-02-24 01:17:08
Document Modified: 2017-02-24 01:17:08
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 11670