82 FR 59835 - Self-Regulatory Organizations, Miami International Securities Exchange LLC; Notice of Filing of Amendment No. 2 to a Proposed Rule Change To Amend the Fee Schedule

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 240 (December 15, 2017)

Page Range		59835-59838
FR Document		2017-27017

Federal Register, Volume 82 Issue 240 (Friday, December 15, 2017)

[Federal Register Volume 82, Number 240 (Friday, December 15, 2017)]
[Notices]
[Pages 59835-59838]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-27017]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82257; File No. SR-MIAX-2017-18]

Self-Regulatory Organizations, Miami International Securities
Exchange LLC; Notice of Filing of Amendment No. 2 to a Proposed Rule
Change To Amend the Fee Schedule

December 11, 2017.
On May 1, 2017, Miami International Securities Exchange LLC (``MIAX
Options'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to adopt a fee schedule to
establish the fees for Industry Members related to the National Market
System Plan Governing the Consolidated Audit Trail (``CAT NMS Plan'').
The proposed rule change was published in the Federal Register for
comment on May 19, 2017.\3\ The Commission received seven comment
letters on the proposed rule change,\4\ and a response to comments from
the Participants.\5\ On June 30, 2017, the Commission temporarily
suspended and initiated proceedings to determine whether to approve or
disapprove the proposed rule change.\6\ The Commission thereafter
received seven comment letters,\7\ and a response to comments

[[Page 59836]]

from the Participants.\8\ On November 7, 2017, the Exchange filed
Amendment No. 1 to the proposed rule change.\9\ On November 9, 2017,
the Commission extended the time period within which to approve the
proposed rule change or disapprove the proposed rule change to January
14, 2018.\10\ On December 1, 2017, the Exchange filed Amendment No. 2
to the proposed rule change, as described in Items I and II below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments from interested persons on
Amendment No. 2.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 80675 (May 15,
2017), 82 FR 23100 (May 19, 2017) (``Original Proposal'').
\4\ Since the CAT NMS Plan Participants' proposed rule changes
to adopt fees to be charged to Industry Members to fund the
consolidated audit trail are substantively identical, the Commission
is considering all comments received on the proposed rule changes
regardless of the comment file to which they were submitted. See
text accompanying note 13 infra, for a list of the CAT NMS Plan
Participants. See Letter from Theodore R. Lazo, Managing Director
and Associate General Counsel, Securities Industry and Financial
Markets Association, to Brent J. Fields, Secretary, Commission
(dated June 6, 2017), available at: https://www.sec.gov/comments/sr-batsbzx-2017-38/batsbzx201738-1788188-153228.pdf; Letter from
Patricia L. Cerny and Steven O'Malley, Compliance Consultants, to
Brent J. Fields, Secretary, Commission (dated June 12, 2017),
available at: https://www.sec.gov/comments/sr-cboe-2017-040/cboe2017040-1799253-153675.pdf; Letter from Daniel Zinn, General
Counsel, OTC Markets Group Inc., to Eduardo A. Aleman, Assistant
Secretary, Commission (dated June 13, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-1801717-153703.pdf; Letter from Joanna Mallers, Secretary, FIA Principal
Traders Group, to Brent J. Fields, Secretary, Commission (dated June
22, 2017), available at: https://www.sec.gov/comments/sr-cboe-2017-040/cboe2017040-1819670-154195.pdf; Letter from Stuart J. Kaswell,
Executive Vice President and Managing Director, General Counsel,
Managed Funds Association, to Brent J. Fields, Secretary, Commission
(dated June 23, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-1822454-154283.pdf; and Letter from
Suzanne H. Shatto, Investor, to Commission (dated June 27, 2017),
available at: https://www.sec.gov/comments/sr-batsedgx-2017-22/batsedgx201722-154443.pdf. The Commission also received a comment
letter which is not pertinent to these proposed rule changes. See
Letter from Christina Crouch, Smart Ltd., to Brent J. Fields,
Secretary, Commission (dated June 5, 2017), available at: https://www.sec.gov/comments/sr-batsbzx-2017-38/batsbzx201738-1785545-153152.htm.
\5\ See Letter from CAT NMS Plan Participants to Brent J.
Fields, Secretary, Commission (dated June 29, 2017), available at:
https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-1832632-154584.pdf.
\6\ See Securities Exchange Act Release No. 81067 (June 30,
2017), 82 FR 31656 (July 7, 2017).
\7\ See Letter from W. Hardy Callcott, Partner, Sidley Austin
LLP, to Brent J. Fields, Secretary, Commission (dated July 27,
2017), available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2148338-157737.pdf; Letter from Kevin Coleman,
General Counsel and Chief Compliance Officer, Belvedere Trading LLC,
to Brent J. Fields, Secretary, Commission (dated July 28, 2017),
available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2148360-157740.pdf; Letter from Joanna Mallers,
Secretary, FIA Principal Traders Group, to Brent J. Fields,
Secretary, Commission (dated July 28, 2017), available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2151228-157745.pdf; Letter from Theodore R. Lazo, Managing Director and
Associate General Counsel, SIFMA, to Brent J. Fields, Secretary,
Commission (dated July 28, 2017), available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2150977-157744.pdf; Letter
from Stuart J. Kaswell, Executive Vice President and Managing
Director, General Counsel, Managed Funds Association, to Brent J.
Fields, Secretary, Commission (dated July 28, 2017), available at:
https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2150818-157743.pdf; Letter from John Kinahan, Chief Executive
Officer, Group One Trading, L.P., to Brent J. Fields, Secretary,
Commission (dated August 10, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-2214568-160619.pdf; Letter from Joseph Molluso, Executive Vice President and
CFO, Virtu Financial, to Brent J. Fields, Commission (dated August
18, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-2238648-160830.pdf.
\8\ See Letter from Michael Simon, Chair, CAT NMS Plan Operating
Committee, to Brent J. Fields, Commission, Secretary (dated November
2, 2017), available at https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2674608-161412.pdf.
\9\ Amendment No. 1 to the proposed rule change replaced and
superseded the Original Proposal in its entirety. See Securities
Exchange Act Release No. 82256 (December 11, 2017).
\10\ See Securities Exchange Act Release No. 82049 (November 9,
2017), 82 FR 53549 (November 16, 2017).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

On May 1, 2017, Miami International Securities Exchange, LLC
(``MIAX Options'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'' or ``SEC'') a proposed rule change
SR-MIAX-2017-18 (the ``Original Proposal''),\11\ pursuant to which the
Exchange proposed to adopt a fee schedule to establish the fees for
Industry Members related to the National Market System Plan Governing
the Consolidated Audit Trail (the ``CAT NMS Plan'' or ``Plan'').\12\ On
November 7, 2017, the Exchange filed an amendment to the Original
Proposal (``First Amendment''). The Exchange files this proposed rule
change (the ``Second Amendment'') to amend the Original Proposal as
amended by the First Amendment.
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\11\ See Securities Exchange Act Release No. 80675 (May 15,
2017), 82 FR 23100 (May 19, 2017) (SR-MIAX-2017-18).
\12\ Unless otherwise specified, capitalized terms used in this
fee filing are defined as set forth herein, the CAT Compliance Rule
Series, in the CAT NMS Plan, or the Original Proposal.
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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
BOX Options Exchange LLC, Cboe BYX Exchange, Inc., Cboe BZX
Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc.,
Cboe C2 Exchange, Inc., Cboe Exchange, Inc., Chicago Stock Exchange,
Inc., Financial Industry Regulatory Authority, Inc. (``FINRA''),
Investors' Exchange LLC, Miami International Securities Exchange, LLC,
MIAX PEARL, LLC, NASDAQ BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC,
Nasdaq MRX, LLC, NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, New York
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc. and NYSE
National, Inc.\13\ (collectively, the ``Participants'') filed with the
Commission, pursuant to Section 11A of the Exchange Act \14\ and Rule
608 of Regulation NMS thereunder,\15\ the CAT NMS Plan.\16\ The
Participants filed the Plan to comply with Rule 613 of Regulation NMS
under the Exchange Act. The Plan was published for comment in the
Federal Register on May 17, 2016,\17\ and approved by the Commission,
as modified, on November 15, 2016.\18\ The Plan is designed to create,
implement and maintain a consolidated audit trail (``CAT'') that would
capture customer and order event information for orders in NMS
Securities and OTC Equity Securities, across all markets, from the time
of order inception through routing, cancellation, modification, or
execution in a single consolidated data source. The Plan accomplishes
this by creating CAT NMS, LLC (the ``Company''), of which each
Participant is a member, to operate the CAT.\19\ Under the CAT NMS
Plan, the Operating Committee of the Company (``Operating Committee'')
has discretion to establish funding for the Company to operate the CAT,
including establishing fees that the Participants will pay, and
establishing fees for Industry Members that will be implemented by the
Participants (``CAT Fees'').\20\ The Participants are required to file
with the SEC under Section 19(b) of the Exchange Act any such CAT Fees
applicable to Industry Members that the Operating Committee
approves.\21\ Accordingly, the Exchange submitted the Original Proposal
to propose the Consolidated Audit Trail Funding Fees, which would
require Industry Members that are Exchange members to pay the CAT Fees
determined by the Operating Committee.
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\13\ Note that Bats BYX Exchange, Inc., Bats BZX Exchange, Inc.,
Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., LLC, C2 Options
Exchange, Incorporated, and Chicago Board Options Exchange,
Incorporated, have been renamed Cboe BYX Exchange, Inc., Cboe BZX
Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc.,
Cboe C2 Exchange, Inc., Cboe Exchange, Inc., respectively.
\14\ 15 U.S.C. 78k-1.
\15\ 17 CFR 242.608.
\16\ See Letter from the Participants to Brent J. Fields,
Secretary, Commission, dated September 30, 2014; and Letter from
Participants to Brent J. Fields, Secretary, Commission, dated
February 27, 2015. On December 24, 2015, the Participants submitted
an amendment to the CAT NMS Plan. See Letter from Participants to
Brent J. Fields, Secretary, Commission, dated December 23, 2015.
\17\ Securities Exchange Act Rel. No. 77724 (Apr. 27, 2016), 81
FR 30614 (May 17, 2016).
\18\ Securities Exchange Act Rel. No. 79318 (Nov. 15, 2016), 81
FR 84696 (Nov. 23, 2016) (``Approval Order'').
\19\ The Plan also serves as the limited liability company
agreement for the Company.
\20\ Section 11.1(b) of the CAT NMS Plan.
\21\ Id.
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The Commission published the Original Proposal for public comment
in the Federal Register on May 19, 2017,\22\ and received comments in
response to the Original Proposal or similar fee filings by other
Participants.\23\ On June 30, 2017, the Commission suspended, and
instituted proceedings to determine whether to approve or disapprove,
the Original Proposal.\24\ The Commission received seven comment
letters in response to those proceedings.\25\
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\22\ See supra. note 3.
\23\ For a summary of comments, see generally Securities
Exchange Act Rel. No. 81067 (June 30, 2017), 82 FR 31656 (July 7,
2017) (``Suspension Order'').
\24\ Suspension Order.
\25\ See Letter from Stuart J. Kaswell, Executive Vice
President, Managing Director and General Counsel, Managed Funds
Association, to Brent J. Fields, Secretary, SEC (July 28, 2017);
Letter from Theodore R. Lazo, Managing Director and Associate
General Counsel, SIFMA, to Brent J. Fields, Secretary, SEC (July 28,
2017); Joanna Mallers, Secretary, FIA Principal Traders Group, to
Brent J. Fields, Secretary, SEC (July 28, 2017); Letter from Kevin
Coleman, General Counsel & Chief Compliance Officer, Belvedere
Trading LLC, to Brent J. Fields, Secretary, SEC (July 28, 2017);
Letter from W. Hardy Callcott, Sidley Austin LLP, to Brent J.
Fields, Secretary, SEC (July 27, 2017); Letter from John Kinahan,
Chief Executive Officer, Group One Trading, L.P., to Brent J.
Fields, Secretary, SEC (Aug. 10, 2017); and Letter from Joseph
Molluso, Executive Vice President, Virtu Financial, to Brent J.
Fields, Secretary, SEC (Aug. 18, 2017).

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[[Page 59837]]

In response to the comments on the Original Proposal, the Operating
Committee determined to make the following changes to the funding
model: (1) Add two additional CAT Fee tiers for Equity Execution
Venues; (2) discount the market share of Execution Venue ATSs
exclusively trading OTC Equity Securities as well as the market share
of the FINRA over-the-counter reporting facility (``ORF'') by the
average shares per trade ratio between NMS Stocks and OTC Equity
Securities (calculated as 0.17% based on available data from the second
quarter of 2017) when calculating the market share of Execution Venue
ATS exclusively trading OTC Equity Securities and FINRA; (3) discount
Options Market Maker quotes by the trade to quote ratio for options
(calculated as 0.01% based on available data for June 2016 through June
2017) when calculating message traffic for Options Market Makers; (4)
discount equity market maker quotes by the trade to quote ratio for
equities (calculated as 5.43% based on available data for June 2016
through June 2017) when calculating message traffic for equity market
makers; (5) decrease the number of tiers for Industry Members (other
than the Execution Venue ATSs) from nine to seven; (6) change the
allocation of CAT costs between Equity Execution Venues and Options
Execution Venues from 75%/25% to 67%/33%; (7) adjust tier percentages
and recovery allocations for Equity Execution Venues, Options Execution
Venues and Industry Members (other than Execution Venue ATSs); (8)
focus the comparability of CAT Fees on the individual entity level,
rather than primarily on the comparability of affiliated entities; (9)
commence invoicing of CAT Reporters as promptly as possible following
the latest of the operative date of the Consolidated Audit Trail
Funding Fees for each of the Participants and the operative date of the
CAT NMS Plan amendment adopting CAT Fees for Participants; and (10)
require the proposed fees to automatically expire two years from the
operative date of the CAT NMS Plan amendment adopting CAT Fees for
Participants. On November 8, 2017, the Exchange filed the First
Amendment and proposed to amend the Original Proposal to reflect these
changes.
The Exchange submits this Second Amendment to revise the proposal
as set forth in the First Amendment to discount the OTC Equity
Securities market share of all Execution Venue ATSs trading OTC Equity
Securities, rather than applying the discount solely to those Execution
Venue ATSs that exclusively trade OTC Equity Securities, when
calculating the market share of Execution Venue ATS trading OTC Equity
Securities. As discussed in the First Amendment:

The Operating Committee determined to discount the market share
of Execution Venue ATSs exclusively trading OTC Equity Securities as
well as the market share of the FINRA ORF in recognition of the
different trading characteristics of the OTC Equity Securities
market as compared to the market in NMS Stocks. Many OTC Equity
Securities are priced at less than one dollar--and a significant
number at less than one penny--per share and low-priced shares tend
to trade in larger quantities. Accordingly, a disproportionately
large number of shares are involved in transactions involving OTC
Equity Securities versus NMS Stocks. Because the proposed fee tiers
are based on market share calculated by share volume, Execution
Venue ATSs exclusively trading OTC Equity Securities and FINRA would
likely be subject to higher tiers than their operations may
warrant.\26\
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\26\ See SR-MIAX-2017-18 Amendment No. 1 filed November 7, 2017.

The Operating Committee believes that this argument applies equally
to both Execution Venue ATSs exclusively trading OTC Equity Securities
and to Execution Venue ATSs that trade OTC Equity Securities as well as
other securities. Accordingly, the Exchange proposes to amend paragraph
(b)(2) of the Consolidated Audit Trail Funding Fees to apply the
discount to all Execution Venue ATSs trading OTC Equity Securities.
Specifically, the Exchange proposes to change the parenthetical
regarding the OTC Equity Securities discount in paragraph (b)(2) of the
proposed fee schedule from ``with a discount for Equity ATSs
exclusively trading OTC Equity Securities based on the average shares
per trade ratio between NMS Stocks and OTC Equity Securities'' to
``with a discount for OTC Equity Securities market share of Equity ATSs
trading OTC Equity Securities based on the average shares per trade
ratio between NMS Stocks and OTC Equity Securities.''
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with the provisions of Section 6(b)(5) of the Act,\27\
which require, among other things, that Exchange rules must be designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, and, in general, to protect
investors and the public interest, and not designed to permit unfair
discrimination between customers, issuers, brokers and dealers, and
Section 6(b)(4) of the Act,\28\ which requires that Exchange rules
provide for the equitable allocation of reasonable dues, fees, and
other charges among its members and issuers and other persons using its
facilities. The Exchange believes that the proposed rule change is
consistent with the Act, and that the proposed fees are reasonable,
equitably allocated and not unfairly discriminatory. In particular, the
Exchange believes that the proposed rule change would treat all Equity
ATSs trading OTC Equity Securities in a comparable manner when
calculating applicable fees. In addition, the fee structure takes into
consideration distinctions in securities trading operations of CAT
Reporters, including all ATSs trading OTC Equity Securities.
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\27\ 15 U.S.C. 78f(b)(5).
\28\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

Section 6(b)(8) of the Act \29\ requires that Exchange rules not
impose any burden on competition that is not necessary or appropriate.
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. As previously described, the
Exchange believes that the proposed rule change fairly and equitably
allocates costs among CAT Reporters. In particular, the proposed fee
schedule is structured to impose comparable fees on similarly situated
CAT Reporters. The Exchange believes that the proposed change would
treat all Equity ATSs trading OTC Equity Securities in a comparable
manner when calculating applicable fees. In addition, the fee structure
takes into consideration distinctions in securities trading operations
of CAT Reporters, including all ATSs trading OTC Equity Securities.
Moreover, the Operating Committee believes that the proposed change
addresses certain competitive concerns raised by commenters related to
ATSs trading OTC Equity Securities.
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\29\ 15 U.S.C. 78f(b)(8).

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[[Page 59838]]

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. Solicitation of Comments

Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal, as
amended by Amendment No. 1 and Amendment No. 2, 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-2017-18 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-2017-18. 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-2017-18, and should be submitted on
or before January 5, 2018.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
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\30\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-27017 Filed 12-14-17; 8:45 am]
BILLING CODE 8011-01-P

59836 Federal Register / Vol. 82, No. 240 / Friday, December 15, 2017 / Notices

from the Participants.8 On November 7, http://www.miaxoptions.com/rule- Register on May 17, 2016,17 and
2017, the Exchange filed Amendment filings, at MIAX’s principal office, and approved by the Commission, as
No. 1 to the proposed rule change.9 On at the Commission’s Public Reference modified, on November 15, 2016.18 The
November 9, 2017, the Commission Room. Plan is designed to create, implement
extended the time period within which and maintain a consolidated audit trail
II. Self-Regulatory Organization’s
to approve the proposed rule change or (‘‘CAT’’) that would capture customer
Statement of the Purpose of, and
disapprove the proposed rule change to and order event information for orders
Statutory Basis for, the Proposed Rule
January 14, 2018.10 On December 1, in NMS Securities and OTC Equity
Change
2017, the Exchange filed Amendment Securities, across all markets, from the
No. 2 to the proposed rule change, as In its filing with the Commission, the time of order inception through routing,
described in Items I and II below, which Exchange included statements cancellation, modification, or execution
Items have been prepared by the concerning the purpose of and basis for in a single consolidated data source.
Exchange. The Commission is the proposed rule change and discussed The Plan accomplishes this by creating
publishing this notice to solicit any comments it received on the CAT NMS, LLC (the ‘‘Company’’), of
comments from interested persons on proposed rule change. The text of these which each Participant is a member, to
Amendment No. 2. statements may be examined at the operate the CAT.19 Under the CAT NMS
places specified in Item IV below. The Plan, the Operating Committee of the
I. Self-Regulatory Organization’s Exchange has prepared summaries, set
Statement of the Terms of Substance of Company (‘‘Operating Committee’’) has
forth in sections A, B, and C below, of discretion to establish funding for the
the Proposed Rule Change the most significant aspects of such Company to operate the CAT, including
On May 1, 2017, Miami International statements. establishing fees that the Participants
Securities Exchange, LLC (‘‘MIAX will pay, and establishing fees for
A. Self-Regulatory Organization’s
Options’’ or ‘‘Exchange’’) filed with the Industry Members that will be
Statement of the Purpose of, and
Securities and Exchange Commission implemented by the Participants (‘‘CAT
Statutory Basis for, the Proposed Rule
(‘‘Commission’’ or ‘‘SEC’’) a proposed Fees’’).20 The Participants are required
Change
rule change SR–MIAX–2017–18 (the to file with the SEC under Section 19(b)
‘‘Original Proposal’’),11 pursuant to 1. Purpose of the Exchange Act any such CAT Fees
which the Exchange proposed to adopt BOX Options Exchange LLC, Cboe applicable to Industry Members that the
a fee schedule to establish the fees for BYX Exchange, Inc., Cboe BZX Operating Committee approves.21
Industry Members related to the Exchange, Inc., Cboe EDGA Exchange, Accordingly, the Exchange submitted
National Market System Plan Governing Inc., Cboe EDGX Exchange, Inc., Cboe the Original Proposal to propose the
the Consolidated Audit Trail (the ‘‘CAT C2 Exchange, Inc., Cboe Exchange, Inc., Consolidated Audit Trail Funding Fees,
NMS Plan’’ or ‘‘Plan’’).12 On November Chicago Stock Exchange, Inc., Financial which would require Industry Members
7, 2017, the Exchange filed an Industry Regulatory Authority, Inc. that are Exchange members to pay the
amendment to the Original Proposal (‘‘FINRA’’), Investors’ Exchange LLC, CAT Fees determined by the Operating
(‘‘First Amendment’’). The Exchange Miami International Securities Committee.
files this proposed rule change (the Exchange, LLC, MIAX PEARL, LLC, The Commission published the
‘‘Second Amendment’’) to amend the NASDAQ BX, Inc., Nasdaq GEMX, LLC, Original Proposal for public comment in
Original Proposal as amended by the Nasdaq ISE, LLC, Nasdaq MRX, LLC, the Federal Register on May 19, 2017,22
First Amendment. NASDAQ PHLX LLC, The NASDAQ and received comments in response to
The text of the proposed rule change Stock Market LLC, New York Stock the Original Proposal or similar fee
is available on the Exchange’s website at Exchange LLC, NYSE American LLC, filings by other Participants.23 On June
NYSE Arca, Inc. and NYSE National, 30, 2017, the Commission suspended,
https://www.sec.gov/comments/sr-batsbyx-2017-11/
batsbyx201711-2150818-157743.pdf; Letter from Inc.13 (collectively, the ‘‘Participants’’) and instituted proceedings to determine
John Kinahan, Chief Executive Officer, Group One filed with the Commission, pursuant to whether to approve or disapprove, the
Trading, L.P., to Brent J. Fields, Secretary, Section 11A of the Exchange Act 14 and Original Proposal.24 The Commission
Commission (dated August 10, 2017), available at: Rule 608 of Regulation NMS
https://www.sec.gov/comments/sr-finra-2017-011/ received seven comment letters in
finra2017011-2214568-160619.pdf; Letter from thereunder,15 the CAT NMS Plan.16 The response to those proceedings.25
Joseph Molluso, Executive Vice President and CFO, Participants filed the Plan to comply
Virtu Financial, to Brent J. Fields, Commission with Rule 613 of Regulation NMS under 17 Securities Exchange Act Rel. No. 77724 (Apr.
(dated August 18, 2017), available at: https:// the Exchange Act. The Plan was 27, 2016), 81 FR 30614 (May 17, 2016).
www.sec.gov/comments/sr-finra-2017-011/
finra2017011-2238648-160830.pdf. published for comment in the Federal 18 Securities Exchange Act Rel. No. 79318 (Nov.

8 See Letter from Michael Simon, Chair, CAT
15, 2016), 81 FR 84696 (Nov. 23, 2016) (‘‘Approval
Order’’).
NMS Plan Operating Committee, to Brent J. Fields, 13 Note that Bats BYX Exchange, Inc., Bats BZX
19 The Plan also serves as the limited liability
Commission, Secretary (dated November 2, 2017), Exchange, Inc., Bats EDGA Exchange, Inc., Bats
company agreement for the Company.
available at https://www.sec.gov/comments/sr- EDGX Exchange, Inc., LLC, C2 Options Exchange, 20 Section 11.1(b) of the CAT NMS Plan.
batsbyx-2017-11/batsbyx201711-2674608- Incorporated, and Chicago Board Options Exchange,
21 Id.
161412.pdf. Incorporated, have been renamed Cboe BYX
9 Amendment No. 1 to the proposed rule change Exchange, Inc., Cboe BZX Exchange, Inc., Cboe 22 See supra. note 3.

replaced and superseded the Original Proposal in EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., 23 For a summary of comments, see generally

its entirety. See Securities Exchange Act Release Cboe C2 Exchange, Inc., Cboe Exchange, Inc., Securities Exchange Act Rel. No. 81067 (June 30,
No. 82256 (December 11, 2017). respectively. 2017), 82 FR 31656 (July 7, 2017) (‘‘Suspension
10 See Securities Exchange Act Release No. 82049 14 15 U.S.C. 78k–1. Order’’).
sradovich on DSK3GMQ082PROD with NOTICES

(November 9, 2017), 82 FR 53549 (November 16, 15 17 CFR 242.608. 24 Suspension Order.

2017). 16 See Letter from the Participants to Brent J. 25 See Letter from Stuart J. Kaswell, Executive
11 See Securities Exchange Act Release No. 80675 Fields, Secretary, Commission, dated September 30, Vice President, Managing Director and General
(May 15, 2017), 82 FR 23100 (May 19, 2017) (SR– 2014; and Letter from Participants to Brent J. Fields, Counsel, Managed Funds Association, to Brent J.
MIAX–2017–18). Secretary, Commission, dated February 27, 2015. Fields, Secretary, SEC (July 28, 2017); Letter from
12 Unless otherwise specified, capitalized terms On December 24, 2015, the Participants submitted Theodore R. Lazo, Managing Director and Associate
used in this fee filing are defined as set forth herein, an amendment to the CAT NMS Plan. See Letter General Counsel, SIFMA, to Brent J. Fields,
the CAT Compliance Rule Series, in the CAT NMS from Participants to Brent J. Fields, Secretary, Secretary, SEC (July 28, 2017); Joanna Mallers,
Plan, or the Original Proposal. Commission, dated December 23, 2015. Secretary, FIA Principal Traders Group, to Brent J.

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59838 Federal Register / Vol. 82, No. 240 / Friday, December 15, 2017 / Notices

C. Self-Regulatory Organization’s Number SR–MIAX–2017–18, and comments from the CAT NMS Plan
Statement on Comments on the should be submitted on or before Participants.6 On June 30, 2017, the
Proposed Rule Change Received From January 5, 2018. Commission temporarily suspended and
Members, Participants, or Others For the Commission, by the Division of initiated proceedings to determine
Written comments were neither Trading and Markets, pursuant to delegated whether to approve or disapprove the
solicited nor received. authority.30 proposed rule change.7 The Commission
Robert W. Errett, thereafter received seven comment
III. Solicitation of Comments Deputy Secretary. letters,8 and a response to comments
Interested persons are invited to [FR Doc. 2017–27017 Filed 12–14–17; 8:45 am]
from the Participants.9 On October 25,
submit written data, views and BILLING CODE 8011–01–P
Commission (dated June 13, 2017), available at:
arguments concerning the foregoing, https://www.sec.gov/comments/sr-finra-2017-011/
including whether the proposal, as finra2017011-1801717-153703.pdf; Letter from
amended by Amendment No. 1 and SECURITIES AND EXCHANGE Joanna Mallers, Secretary, FIA Principal Traders
Amendment No. 2, is consistent with COMMISSION Group, to Brent J. Fields, Secretary, Commission
(dated June 22, 2017), available at: https://
the Act. Comments may be submitted by [Release No. 34–82263; File No. SR– www.sec.gov/comments/sr-cboe-2017-040/
any of the following methods: NYSEMKT–2017–26] cboe2017040-1819670-154195.pdf; Letter from
Stuart J. Kaswell, Executive Vice President and
Electronic Comments Managing Director, General Counsel, Managed
Self-Regulatory Organizations; NYSE Funds Association, to Brent J. Fields, Secretary,
• Use the Commission’s internet MKT LLC; Notice of Filing of Commission (dated June 23, 2017), available at:
comment form (http://www.sec.gov/ Amendment No. 2 to Proposed Rule https://www.sec.gov/comments/sr-finra-2017-011/
rules/sro.shtml); or finra2017011-1822454-154283.pdf; and Letter from
Change Amending the Consolidated
• Send an email to rule-comments@ Audit Trail Funding Fees
Suzanne H. Shatto, Investor, to Commission (dated
June 27, 2017), available at: https://www.sec.gov/
sec.gov. Please include File Number SR– comments/sr-batsedgx-2017-22/batsedgx201722-
MIAX–2017–18 on the subject line. December 11, 2017. 154443.pdf. The Commission also received a
On May 10, 2017, NYSE MKT LLC 1 comment letter which is not pertinent to these
Paper Comments (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed proposed rule changes. See Letter from Christina
Crouch, Smart Ltd., to Brent J. Fields, Secretary,
• Send paper comments in triplicate with the Securities and Exchange Commission (dated June 5, 2017), available at:
to Secretary, Securities and Exchange Commission (‘‘Commission’’), pursuant https://www.sec.gov/comments/sr-batsbzx-2017-38/
Commission, 100 F Street NE, to Section 19(b)(1) of the Securities batsbzx201738-1785545-153152.htm.
6 See Letter from CAT NMS Plan Participants to
Washington, DC 20549–1090. Exchange Act of 1934 (‘‘Act’’) 2 and Rule
Brent J. Fields, Secretary, Commission (dated June
All submissions should refer to File 19b–4 thereunder,3 a proposed rule 29, 2017), available at: https://www.sec.gov/
Number SR–MIAX–2017–18. This file change to adopt a fee schedule to comments/sr-batsbyx-2017-11/batsbyx201711-
establish the fees for Industry Members 1832632-154584.pdf.
number should be included on the 7 See Securities Exchange Act Release No. 81067
subject line if email is used. To help the related to the National Market System
(June 30, 2017), 82 FR 31656 (July 7, 2017).
Commission process and review your Plan Governing the Consolidated Audit 8 See Letter from W. Hardy Callcott, Partner,

comments more efficiently, please use Trail (‘‘CAT NMS Plan’’). The proposed Sidley Austin LLP, to Brent J. Fields, Secretary,
only one method. The Commission will rule change was published in the Commission (dated July 27, 2017), available at:
Federal Register for comment on May https://www.sec.gov/comments/sr-batsbyx-2017-11/
post all comments on the Commission’s batsbyx201711-2148338-157737.pdf; Letter from
internet website (http://www.sec.gov/ 22, 2017.4 The Commission received Kevin Coleman, General Counsel and Chief
rules/sro.shtml). Copies of the seven comment letters on the proposed Compliance Officer, Belvedere Trading LLC, to
rule change,5 and a response to Brent J. Fields, Secretary, Commission (dated July
submission, all subsequent 28, 2017), available at: https://www.sec.gov/
amendments, all written statements comments/sr-batsbyx-2017-11/batsbyx201711-
30 17 CFR 200.30–3(a)(12).
with respect to the proposed rule 1 NYSE
2148360-157740.pdf; Letter from Joanna Mallers,
MKT LLC has been renamed NYSE Secretary, FIA Principal Traders Group, to Brent J.
change that are filed with the American LLC. See Securities Exchange Act Rel. Fields, Secretary, Commission (dated July 28, 2017),
Commission, and all written No. 80283 (Mar. 21. 2017), 82 FR 15244 (Mar. 27, available at: https://www.sec.gov/comments/sr-
communications relating to the 2017). batsbyx-2017-11/batsbyx201711-2151228-
proposed rule change between the 2 15 U.S.C. 78s(b)(1). 157745.pdf; Letter from Theodore R. Lazo,
3 17 CFR 240.19b–4. Managing Director and Associate General Counsel,
Commission and any person, other than SIFMA, to Brent J. Fields, Secretary, Commission
4 See Securities Exchange Act Release No. 80694
those that may be withheld from the (dated July 28, 2017), available at: https://
(May 16, 2017), 82 FR 23416 (May 22, 2017)
public in accordance with the (‘‘Original Proposal’’). www.sec.gov/comments/sr-batsbyx-2017-11/
provisions of 5 U.S.C. 552, will be 5 Since the CAT NMS Plan Participants’ proposed
batsbyx201711-2150977-157744.pdf; Letter from
Stuart J. Kaswell, Executive Vice President and
available for website viewing and rule changes to adopt fees to be charged to Industry Managing Director, General Counsel, Managed
printing in the Commission’s Public Members to fund the consolidated audit trail are Funds Association, to Brent J. Fields, Secretary,
substantively identical, the Commission is Commission (dated July 28, 2017), available at:
Reference Room, 100 F Street NE, considering all comments received on the proposed https://www.sec.gov/comments/sr-batsbyx-2017-11/
Washington, DC 20549, on official rule changes regardless of the comment file to batsbyx201711-2150818-157743.pdf; Letter from
business days between the hours of which they were submitted. See text accompanying John Kinahan, Chief Executive Officer, Group One
10:00 a.m. and 3:00 p.m. Copies of the note 13 infra, for a list of the CAT NMS Plan Trading, L.P., to Brent J. Fields, Secretary,
Participants. See Letter from Theodore R. Lazo, Commission (dated August 10, 2017), available at:
filing also will be available for Managing Director and Associate General Counsel, https://www.sec.gov/comments/sr-finra-2017-011/
inspection and copying at the principal Securities Industry and Financial Markets finra2017011-2214568-160619.pdf; Letter from
office of the Exchange. All comments Association, to Brent J. Fields, Secretary, Joseph Molluso, Executive Vice President and CFO,
received will be posted without change. Commission (dated June 6, 2017), available at: Virtu Financial, to Brent J. Fields, Commission
sradovich on DSK3GMQ082PROD with NOTICES

https://www.sec.gov/comments/sr-batsbzx-2017-38/ (dated August 18, 2017), available at: https://
Persons submitting comments are batsbzx201738-1788188-153228.pdf; Letter from www.sec.gov/comments/sr-finra-2017-011/
cautioned that we do not redact or edit Patricia L. Cerny and Steven O’Malley, Compliance finra2017011-2238648-160830.pdf.
personal identifying information from Consultants, to Brent J. Fields, Secretary, 9 See Letter from Michael Simon, Chair, CAT

comment submissions. You should Commission (dated June 12, 2017), available at: NMS Plan Operating Committee, to Brent J. Fields,
https://www.sec.gov/comments/sr-cboe-2017-040/ Commission, Secretary (dated November 2, 2017),
submit only information that you wish cboe2017040-1799253-153675.pdf; Letter from available at https://www.sec.gov/comments/sr-
to make available publicly. All Daniel Zinn, General Counsel, OTC Markets Group batsbyx-2017-11/batsbyx201711-2674608-
submissions should refer to File Inc., to Eduardo A. Aleman, Assistant Secretary, 161412.pdf.

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Document Created: 2017-12-15 03:37:24
Document Modified: 2017-12-15 03:37:24

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 59835