83 FR 40110 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 156 (August 13, 2018)

Page Range		40110-40112
FR Document		2018-17253
Federal Register, Volume 83 Issue 156 (Monday, August 13, 2018)
[Federal Register Volume 83, Number 156 (Monday, August 13, 2018)]
[Notices]
[Pages 40110-40112]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-17253]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83788; File No. SR-MIAX-2018-18]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Its Fee Schedule

August 7, 2018.
    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4

[[Page 40111]]

thereunder,\2\ notice is hereby given that on July 31, 2018, 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 notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Options Fee 
Schedule (the ``Fee Schedule'').
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings, 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 the Fee Schedule to adopt a stock 
handling fee for stock-option orders (including stock-option eQuotes) 
executed against other stock-option orders in the complex order book, 
which the Exchange must route to an outside venue.
    The Exchange recently amended Exchange Rule 518, Complex Orders, to 
update its rule text regarding stock-option orders, in connection with 
the upcoming launch of such orders on the Exchange.\3\ Complex orders 
began trading on the Exchange on October 24, 2016.\4\ In its rule 
filing to establish the trading of complex orders, the Exchange adopted 
rules for handling stock-option orders.\5\ The Exchange also indicated 
that it would determine when stock-option orders would be made 
available for trading in the System \6\ and would communicate such 
determination to Members \7\ via Regulatory Circular.\8\ The Exchange 
made certain changes to its rule text, in connection with the upcoming 
launch of such orders on the Exchange, which is scheduled for Q3 2018.
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    \3\ See Securities Exchange Act Release No. 83726 (July 27, 
2018) (SR-MIAX-2018-16) Notice of Filing and Immediate Effectiveness 
of a Proposed Rule Change to Amend Exchange Rule 518, Complex 
Orders.
    \4\ See MIAX Regulatory Circular 2016-43, October 20, 2016.
    \5\ See Securities Exchange Act Release No. 79072 (October 7, 
2014), 81 FR 71131 (October 14, 2016) (SR-MIAX-2016-26).
    \6\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
    \7\ 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.
    \8\ See supra note 3.
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    The Exchange proposes to adopt a stock handling fee applicable to 
stock-option orders (including stock-option eQuotes) executed against 
other stock-option orders in the complex order book, which the Exchange 
must route to an outside venue. Specifically, the Exchange proposes to 
adopt a stock handling fee of $0.0010 per share for the stock leg of 
stock-option orders executed against other stock-option orders in the 
complex order book, which are routed to an outside venue. This stock 
handling fee to be assessed by the Exchange will cover all fees charged 
by the outside venue that prints the trade, and it is also intended to 
compensate the Exchange for matching these stock-option orders against 
other stock-option orders on the complex order book. A maximum of $50 
per order, per day, will be assessed under this fee. The cap is 
intended to give market participants assurance that they will not pay 
more than the capped amount for the execution of the stock leg of their 
stock-option orders. The Exchange believes that by limiting this fee to 
a maximum of $50 per order, per day, the Exchange addresses the 
possibility that a GTC order could be executed over multiple days. For 
example, if such an order was partially-executed on a Monday, and then 
the remainder was fully-executed on a Tuesday, the total maximum fee 
charged to the market participant would be $100 ($50 per day). In 
addition to the Exchange's fee, the Exchange will also pass through to 
the Member any fees assessed by the routing broker-dealer utilized by 
the Exchange with respect to the execution of the stock leg of any such 
order (with such fees to be passed through at cost). For example, the 
Exchange anticipates that the routing broker-dealer will bill the 
Exchange for Section 31 fees and FINRA Trading Activity Fees with 
respect to the execution of the stock leg of any such order. The 
Exchange will pass such fees through to the Member, at cost (that is, 
without any additional mark-up).
    Separately, the Exchange also notes that it currently charges fees 
to Members who subscribe to an Exchange-provided data feed that 
contains real-time clearing trade updates, which includes trades in its 
complex order book. Specifically, through the Exchange's Clearing Trade 
Drop (``CTD'') port, it provides updates, including the Member's 
clearing trade messages, on a low latency, real-time basis.\9\ With 
respect to stock-option orders, the Exchange notes that while such CTD 
port will now include information relating to the execution of both the 
option leg(s) and the stock leg(s) of a stock-option order, the 
Exchange will not charge an additional CTD fee for the stock leg(s) of 
a stock-option order.
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    \9\ See Fee Schedule 5)d)iii).
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    The proposed rule change is scheduled to become operative on August 
1, 2018.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \10\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \11\ in 
particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among Exchange Members and 
issuers and other persons using its facilities The Exchange also 
believes the proposal furthers the objectives of Section 6(b)(5) of the 
Act \12\ in that it is designed to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market and a national market system, and, in general 
to protect investors and the public interest and is not designed to 
permit unfair discrimination between customer, issuers, brokers and 
dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed stock handling fee for 
stock-option orders (including stock-option eQuotes) is consistent with 
Section 6(b)(4) of the Act in that it is reasonable, equitable and not 
unfairly discriminatory. The Exchange believes the proposed stock 
handling fee for

[[Page 40112]]

stock-option orders is reasonable and equitable as the proposed fee 
will cover the costs of developing and maintaining the systems that 
allow for the matching and processing of the stock legs of stock-option 
orders executed in the complex order book, as well as all fees charged 
by the outside venue that prints the trade. The Exchange also believes 
it is reasonable and equitable to pass through to the Member any fees 
assessed by the routing broker-dealer utilized by the Exchange with 
respect to the execution of the stock leg of any such order (with such 
fees to be passed through at cost). The Exchange notes that another 
exchange has a comparable fee for the handling of the stock leg of 
stock-option orders. Specifically, Nasdaq ISE (``ISE'') charges a stock 
handling fee of $0.0010 per share which is capped at $50 per order.\13\ 
The Exchange also believes that its proposal is consistent with Section 
6(b)(5) of the Act \14\ because it will be uniformly applied to all 
Members that execute stock-option orders in the complex order book on 
the Exchange.
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    \13\ See ISE Schedule of Fees, Section II; see also Securities 
Exchange Act Release No. 74117 (January 22, 2015), 80 FR 4600 
(January 28, 2015) (SR-ISE-2015-03).
    \14\ 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 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed fee is similar to 
and within the range of fees charged by the Exchange's competitor.\15\ 
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. For the reasons stated above, the Exchange believes that the 
proposed rule change reflects this competitive environment.
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    \15\ See supra note 13.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act,\16\ and Rule 19b-4(f)(2)\17\ 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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    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \17\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MIAX-2018-18 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-2018-18. 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-2018-18 and should be submitted on 
or before September 4, 2018.
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    \18\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-17253 Filed 8-10-18; 8:45 am]
 BILLING CODE 8011-01-P
40110 Federal Register / Vol. 83, No. 156 / Monday, August 13, 2018 / Notices

The Exchange believes that amending competition because the ORF applies to All submissions should refer to File No.
the ORF from $0.0010 to $0.0020 as of all customer activity, thereby raising SR–GEMX–2018–27. This file number
August 1, 2018 is equitable and not regulatory revenue to offset regulatory should be included on the subject line
unfairly discriminatory because expenses. It also supplements the if email is used. To help the
assessing the ORF to each Member for regulatory revenue derived from non- Commission process and review your
options transactions cleared by OCC in customer activity. This proposal does comments more efficiently, please use
the customer range where the execution not create an unnecessary or only one method. The Commission will
occurs on another exchange and is inappropriate inter-market burden on post all comments on the Commission’s
cleared by a GEMX Member is an competition because it is a regulatory internet website (http://www.sec.gov/
equitable allocation of reasonable dues, fee that supports regulation in rules/sro.shtml). Copies of the
fees, and other charges among its furtherance of the purposes of the Act. submission, all subsequent
members and issuers and other persons The Exchange is obligated to ensure that amendments, all written statements
using its facilities. The ORF is collected the amount of regulatory revenue with respect to the proposed rule
by OCC on behalf of GEMX from collected from the ORF, in combination change that are filed with the
Exchange clearing members for all with its other regulatory fees and fines, Commission, and all written
customer transactions they clear or from does not exceed regulatory costs. communications relating to the
non-members for all customer proposed rule change between the
transactions they clear that were C. Self-Regulatory Organization’s
Commission and any person, other than
executed on GEMX. The Exchange Statement on Comments on the
those that may be withheld from the
believes the ORF ensures fairness by Proposed Rule Change Received From
public in accordance with the
assessing fees to Members based on the Members, Participants, or Others
provisions of 5 U.S.C. 552, will be
amount of customer options business No written comments were either available for website viewing and
they conduct. Regulating customer solicited or received. printing in the Commission’s Public
trading activity is much more labor Reference Room, 100 F Street NE,
intensive and requires greater III. Date of Effectiveness of the
Washington, DC 20549, on official
expenditure of human and technical Proposed Rule Change and Timing for
business days between the hours of
resources than regulating non-customer Commission Action
10:00 a.m. and 3:00 p.m. Copies of the
trading activity, which tends to be more The foregoing rule change has become filing also will be available for
automated and less labor-intensive. As a effective pursuant to Section inspection and copying at the principal
result, the costs associated with 19(b)(3)(A)(ii) of the Act.9 At any time office of the Exchange. All comments
administering the customer component within 60 days of the filing of the received will be posted without change.
of the Exchange’s overall regulatory proposed rule change, the Commission Persons submitting comments are
program are materially higher than the summarily may temporarily suspend cautioned that we do not redact or edit
costs associated with administering the such rule change if it appears to the personal identifying information from
non-customer component (e.g., Member Commission that such action is: (i) comment submissions. You should
proprietary transactions) of its Necessary or appropriate in the public submit only information that you wish
regulatory program. interest; (ii) for the protection of to make available publicly. All
The ORF is designed to recover a investors; or (iii) otherwise in submissions should refer to File No.
material portion of the costs of furtherance of the purposes of the Act. SR–GEMX–2018–27, and should be
supervising and regulating Members’
If the Commission takes such action, the submitted on or before September 4,
customer options business including
Commission shall institute proceedings 2018.
performing routine surveillances,
to determine whether the proposed rule For the Commission, by the Division of
investigations, examinations, financial
should be approved or disapproved. Trading and Markets, pursuant to delegated
monitoring, and policy, rulemaking,
interpretive, and enforcement activities. IV. Solicitation of Comments authority.10
The Exchange will monitor the amount Eduardo A. Aleman,
Interested persons are invited to Assistant Secretary.
of revenue collected from the ORF to
submit written data, views, and
ensure that it, in combination with its [FR Doc. 2018–17254 Filed 8–10–18; 8:45 am]
arguments concerning the foregoing,
other regulatory fees and fines, does not BILLING CODE 8011–01–P
exceed the Exchange’s total regulatory including whether the proposed rule
costs. The Exchange has designed the change is consistent with the Act.
ORF to generate revenues that, when Comments may be submitted by any of SECURITIES AND EXCHANGE
combined with all of the Exchange’s the following methods: COMMISSION
other regulatory fees, will be less than Electronic Comments [Release No. 34–83788; File No. SR–MIAX–
or equal to the Exchange’s regulatory
costs, which is consistent with the • Use the Commission’s internet 2018–18]
Commission’s view that regulatory fees comment form (http://www.sec.gov/
rules/sro.shtml); or Self-Regulatory Organizations; Miami
be used for regulatory purposes and not International Securities Exchange LLC;
to support the Exchange’s business side. • Send an email to rule-comments@
Notice of Filing and Immediate
sec.gov. Please include File No. SR–
B. Self-Regulatory Organization’s Effectiveness of a Proposed Rule
GEMX–2018–27 on the subject line.
Statement on Burden on Competition Change To Amend Its Fee Schedule
sradovich on DSK3GMQ082PROD with NOTICES

Paper Comments
The Exchange does not believe that August 7, 2018.
the proposed rule change will impose • Send paper comments in triplicate Pursuant to the provisions of Section
any burden on competition not to Secretary, Securities and Exchange 19(b)(1) of the Securities Exchange Act
necessary or appropriate in furtherance Commission, 100 F Street NE, of 1934 (‘‘Act’’) 1 and Rule 19b–4
of the purposes of the Act. This Washington, DC 20549–1090.
proposal does not create an unnecessary 10 17 CFR 200.30–3(a)(12).
or inappropriate intra-market burden on 9 15 U.S.C. 78s(b)(3)(A)(ii). 1 15 U.S.C. 78s(b)(1).

VerDate Sep<11>2014 20:42 Aug 10, 2018 Jkt 244001 PO 00000 Frm 00130 Fmt 4703 Sfmt 4703 E:\FR\FM\13AUN1.SGM 13AUN1
Document Created: 2018-08-11 00:27:31
Document Modified: 2018-08-11 00:27:31
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		83 FR 40110