83 FR 47953 - Self-Regulatory Organizations; MIAX PEARL, LLC; Suspension of and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend the Fee Schedule Regarding Connectivity Fees for Members and Non-Members
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 184 (September 21, 2018)
Federal Register Volume 83, Issue 184 (September 21, 2018)
| Page Range | 47953-47955 | |
| FR Document | 2018-20545 |
[Federal Register Volume 83, Number 184 (Friday, September 21, 2018)] [Notices] [Pages 47953-47955] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-20545] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-84177; File No. SR-PEARL-2018-16] Self-Regulatory Organizations; MIAX PEARL, LLC; Suspension of and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend the Fee Schedule Regarding Connectivity Fees for Members and Non-Members September 17, 2018. I. Introduction On July 31, 2018, MIAX PEARL, LLC (``MIAX PEARL'' or the ``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 (File Number SR-PEARL-2018-16) to amend the MIAX PEARL fee schedule to increase certain connectivity fees. The proposed rule change was immediately effective upon filing with the Commission pursuant to Section 19(b)(3)(A) of the Act.\3\ The proposed rule change was published for comment in the Federal Register on August 13, 2018.\4\ The Commission has received one comment letter on the proposal.\5\ Under Section 19(b)(3)(C) of the Act,\6\ the Commission is hereby: (i) Temporarily suspending the proposed rule change; and (ii) instituting proceedings to determine whether to approve or disapprove the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A). \4\ See Securities Exchange Act Release No. 83785 (August 7, 2018), 83 FR 40101 (``Notice''). \5\ See Letter from Tyler Gellasch, Executive Director, The Healthy Markets Association, to Brent J. Fields, Secretary, Commission, dated September 4, 2018 (``Healthy Markets Letter''). \6\ 15 U.S.C. 78s(b)(3)(C). --------------------------------------------------------------------------- II. Description of the Proposed Rule Change The Exchange proposes to amend its fee schedule to increase its monthly network connectivity fees. Specifically, the Exchange proposes to increase the connectivity fee for connectivity to the Exchange's primary/secondary facility from $1,100 to $1,400 for a 1 Gigabit (``Gb'') connection, from $5,500 to $6,100 for a 10Gb connection, and from $8,500 to $9,300 for a 10Gb ultra-low latency connection.\7\ In addition, the Exchange proposes to increase the network connectivity fees for connectivity to the Exchange's disaster recovery facility from $500 to $550 for a 1Gb connection and from $2,500 to $2,750 for a 10Gb connection.\8\ --------------------------------------------------------------------------- \7\ See Notice, supra note 4 at 40102. \8\ See id. --------------------------------------------------------------------------- III. Suspension of the Proposed Rule Change Pursuant to Section 19(b)(3)(C) of the Act,\9\ at any time within 60 days of the date of filing of a proposed rule change pursuant to Section 19(b)(1) of the Act,\10\ the Commission summarily may temporarily suspend the change in the rules of a self-regulatory organization (``SRO'') 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. As discussed below, the Commission believes a temporary suspension of the proposed rule change is necessary and appropriate to allow for additional analysis of the proposed rule change's consistency with the Act and the rules thereunder. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(C). \10\ 15 U.S.C. 78s(b)(1). --------------------------------------------------------------------------- As noted above, the Commission received one comment letter on the proposal.\11\ The commenter argues that the Exchange did not provide sufficient information in its filing to support a finding that the proposal is consistent with the Act.\12\ Specifically, the commenter objects to the Exchange's reliance on the fees of other exchanges to demonstrate that its fee increases are consistent with the Act. In addition, the commenter argues that the Exchange did not offer any details to support its basis for asserting that the proposed fee increases are consistent with the Act.\13\ The Exchange has not responded to the comment letter. --------------------------------------------------------------------------- \11\ See Healthy Markets Letter, supra note 5. \12\ See id. at 5. \13\ See id. at 6-7, 12. --------------------------------------------------------------------------- When exchanges file their proposed rule changes with the Commission, including fee filings like the Exchange's present proposal, they are required to provide a statement supporting the proposal's basis under the Act and the rules and regulations thereunder applicable to the exchange.\14\ The instructions to Form 19b-4, on which exchanges file their proposed rule changes, specify that such statement ``should be sufficiently detailed and specific to support a finding that the proposed rule change is consistent with [those] requirements.'' \15\ --------------------------------------------------------------------------- \14\ See 17 CFR 240.19b-4 (Item 3 entitled ``Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change''). \15\ Id. --------------------------------------------------------------------------- Among other things, exchange proposed rule changes are subject to Section 6 of the Act, including Sections 6(b)(4), (5), and (8), which requires the rules of an exchange to (1) provide for the equitable allocation of reasonable fees among members, issuers, and other persons using the exchange's facilities; \16\ (2) perfect the mechanism of a free and open market and a national market system, protect investors and the public interest, and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers; \17\ and (3) not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.\18\ --------------------------------------------------------------------------- \16\ 15 U.S.C. 78f(b)(4). \17\ 15 U.S.C. 78f(b)(5). \18\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- In temporarily suspending the Exchange's fee change, the Commission intends to further consider whether increasing certain connectivity fees to the Exchange is consistent with the statutory requirements applicable to a national securities exchange under the Act. In particular, the Commission will consider whether the proposed rule change satisfies the standards under the Act and the rules thereunder requiring, among other things, that an exchange's rules provide for the equitable allocation of reasonable fees among members, issuers, and other persons using its facilities; not permit unfair discrimination between customers, issuers, brokers or dealers; and do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.\19\ --------------------------------------------------------------------------- \19\ See 15 U.S.C. 78f(b)(4), (5), and (8), respectively. --------------------------------------------------------------------------- Therefore, the Commission finds that it is appropriate in the public interest, for the protection of investors, and [[Page 47954]] otherwise in furtherance of the purposes of the Act, to temporarily suspend the proposed rule changes.\20\ --------------------------------------------------------------------------- \20\ For purposes of temporarily suspending the proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- IV. Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Change The Commission is instituting proceedings pursuant to Sections 19(b)(3)(C) \21\ and 19(b)(2)(B) of the Act \22\ to determine whether the proposed rule change should be approved or disapproved. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, the Commission seeks and encourages interested persons to provide additional comment on the proposed rule change to inform the Commission's analysis of whether to disapprove the proposed rule change. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78s(b)(3)(C). Once the Commission temporarily suspends a proposed rule change, Section 19(b)(3)(C) of the Act requires that the Commission institute proceedings under Section 19(b)(2)(B) to determine whether a proposed rule change should be approved or disapproved. \22\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- Pursuant to Section 19(b)(2)(B) of the Act,\23\ the Commission is providing notice of the grounds for possible disapproval under consideration: --------------------------------------------------------------------------- \23\ 15 U.S.C. 78s(b)(2)(B). ---------------------------------------------------------------------------Section 6(b)(4) of the Act, which requires that the rules of a national securities exchange ``provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities,'' \24\ --------------------------------------------------------------------------- \24\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ``designed to perfect the operation of a free and open market and a national market system'' and ``protect investors and the public interest,'' and not be ``designed to permit unfair discrimination between customers, issuers, brokers, or dealers,'' \25\ and --------------------------------------------------------------------------- \25\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Section 6(b)(8) of the Act, which requires that the rules of a national securities exchange ``not impose any burden on competition not necessary or appropriate in furtherance of the purposes of [the Act].'' \26\ --------------------------------------------------------------------------- \26\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- As noted above, the proposal increases connectivity fees for physical connections to the Exchange. The Exchange states that this fee increase would allow the Exchange to offset costs associated with providing and maintaining this technology.\27\ The commenter, among other concerns, asserts that the Exchange has not offered sufficient detail to support that the proposed fees are consistent with the Act and, in particular, whether the proposed fees are reasonable.\28\ --------------------------------------------------------------------------- \27\ See Notice, supra note 4, at 40102. \28\ See Healthy Markets Letter, supra note 5, at 6. --------------------------------------------------------------------------- Under the Commission's Rules of Practice, the ``burden to demonstrate that a proposed rule change is consistent with the [Act] and the rules and regulations issued thereunder . . . is on the [SRO] that proposed the rule change.'' \29\ The description of a proposed rule change, its purpose and operation, its effect, and a legal analysis of its consistency with applicable requirements must all be sufficiently detailed and specific to support an affirmative Commission finding,\30\ and any failure of an SRO to provide this information may result in the Commission not having a sufficient basis to make an affirmative finding that a proposed rule change is consistent with the Act and the applicable rules and regulations.\31\ --------------------------------------------------------------------------- \29\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR 201.700(b)(3). \30\ See id. \31\ See id. --------------------------------------------------------------------------- The Commission is instituting proceedings to allow for additional consideration and comment on the issues raised herein, including as to whether the proposed fees are consistent with the Act, and specifically, with its requirements that exchange fees be reasonable and equitably allocated; be designed to perfect the mechanism of a free and open market and the national market system, protect investors and the public interest, and not be unfairly discriminatory; or not impose an unnecessary or inappropriate burden on competition.\32\ --------------------------------------------------------------------------- \32\ See 15 U.S.C. 78f(b)(4), (5), and (8). --------------------------------------------------------------------------- V. Commission's Solicitation of Comments The Commission requests written views, data, and arguments with respect to the concerns identified above as well as any other relevant concerns. Such comments should be submitted by October 12, 2018. Rebuttal comments should be submitted by October 26, 2018. Although there do not appear to be any issues relevant to approval or disapproval which would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.\33\ --------------------------------------------------------------------------- \33\ 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act grants the Commission flexibility to determine what type of proceeding--either oral or notice and opportunity for written comments--is appropriate for consideration of a particular proposal by an SRO. See Securities Acts Amendments of 1975, Report of the Senate Committee on Banking, Housing and Urban Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). --------------------------------------------------------------------------- The Commission asks that commenters address the sufficiency and merit of the Exchange's statements in support of the proposal, in addition to any other comments they may wish to submit about the proposed rule change. Interested persons are invited to submit written data, views, and arguments concerning the proposed rule change, 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 rule-comments@sec.gov. Please include File Number SR-PEARL-2018-16 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-PEARL-2018-16. 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. [[Page 47955]] 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-PEARL-2018-16 and should be submitted on or before October 12, 2018. Rebuttal comments should be submitted by October 26, 2018. VI. Conclusion It is therefore ordered, pursuant to Section 19(b)(3)(C) of the Act,\34\ that File Number SR-PEARL-2018-16 be and hereby is, temporarily suspended. In addition, the Commission is instituting proceedings to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \34\ 15 U.S.C. 78s(b)(3)(C). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\35\ --------------------------------------------------------------------------- \35\ 17 CFR 200.30-3(a)(57) and (58). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2018-20545 Filed 9-20-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Notices 47953
on combating retail investor fraud. The Temporarily suspending the proposed The Exchange has not responded to the
roundtable is open to the public and the rule change; and (ii) instituting comment letter.
public is invited to submit written proceedings to determine whether to When exchanges file their proposed
comments. This Sunshine Act notice is approve or disapprove the proposed rule changes with the Commission,
being issued because a majority of the rule change. including fee filings like the Exchange’s
Commission may attend the roundtable. present proposal, they are required to
The agenda for the roundtable will II. Description of the Proposed Rule provide a statement supporting the
focus on the types of fraudulent and Change proposal’s basis under the Act and the
manipulative schemes currently The Exchange proposes to amend its rules and regulations thereunder
targeting retail investors, and enhancing fee schedule to increase its monthly applicable to the exchange.14 The
the ability of broker-dealers and others network connectivity fees. Specifically, instructions to Form 19b–4, on which
to combat retail investor fraud. the Exchange proposes to increase the exchanges file their proposed rule
CONTACT PERSON FOR MORE INFORMATION: connectivity fee for connectivity to the changes, specify that such statement
For further information, please contact Exchange’s primary/secondary facility ‘‘should be sufficiently detailed and
Brent J. Fields from the Office of the from $1,100 to $1,400 for a 1 Gigabit specific to support a finding that the
Secretary at (202) 551–5400. (‘‘Gb’’) connection, from $5,500 to proposed rule change is consistent with
$6,100 for a 10Gb connection, and from [those] requirements.’’ 15
Dated: September 19, 2018.
$8,500 to $9,300 for a 10Gb ultra-low Among other things, exchange
Brent J. Fields, latency connection.7 In addition, the proposed rule changes are subject to
Secretary. Exchange proposes to increase the Section 6 of the Act, including Sections
[FR Doc. 2018–20741 Filed 9–19–18; 4:15 pm] network connectivity fees for 6(b)(4), (5), and (8), which requires the
BILLING CODE 8011–01–P connectivity to the Exchange’s disaster rules of an exchange to (1) provide for
recovery facility from $500 to $550 for the equitable allocation of reasonable
a 1Gb connection and from $2,500 to fees among members, issuers, and other
SECURITIES AND EXCHANGE $2,750 for a 10Gb connection.8 persons using the exchange’s
COMMISSION facilities; 16 (2) perfect the mechanism of
III. Suspension of the Proposed Rule
[Release No. 34–84177; File No. SR– Change a free and open market and a national
PEARL–2018–16] market system, protect investors and the
Pursuant to Section 19(b)(3)(C) of the public interest, and not be designed to
Self-Regulatory Organizations; MIAX Act,9 at any time within 60 days of the permit unfair discrimination between
PEARL, LLC; Suspension of and Order date of filing of a proposed rule change customers, issuers, brokers, or
Instituting Proceedings To Determine pursuant to Section 19(b)(1) of the dealers; 17 and (3) not impose any
Whether To Approve or Disapprove a Act,10 the Commission summarily may burden on competition not necessary or
Proposed Rule Change To Amend the temporarily suspend the change in the appropriate in furtherance of the
Fee Schedule Regarding Connectivity rules of a self-regulatory organization purposes of the Act.18
Fees for Members and Non-Members (‘‘SRO’’) if it appears to the Commission In temporarily suspending the
that such action is necessary or Exchange’s fee change, the Commission
September 17, 2018. appropriate in the public interest, for intends to further consider whether
I. Introduction the protection of investors, or otherwise increasing certain connectivity fees to
in furtherance of the purposes of the the Exchange is consistent with the
On July 31, 2018, MIAX PEARL, LLC
Act. As discussed below, the statutory requirements applicable to a
(‘‘MIAX PEARL’’ or the ‘‘Exchange’’)
Commission believes a temporary national securities exchange under the
filed with the Securities and Exchange
suspension of the proposed rule change Act. In particular, the Commission will
Commission (‘‘Commission’’), pursuant
is necessary and appropriate to allow for consider whether the proposed rule
to Section 19(b)(1) of the Securities
additional analysis of the proposed rule change satisfies the standards under the
Exchange Act of 1934 (‘‘Act’’),1 and
change’s consistency with the Act and Act and the rules thereunder requiring,
Rule 19b–4 thereunder,2 a proposed rule
the rules thereunder. among other things, that an exchange’s
change (File Number SR–PEARL–2018– As noted above, the Commission
16) to amend the MIAX PEARL fee rules provide for the equitable
received one comment letter on the
schedule to increase certain allocation of reasonable fees among
proposal.11 The commenter argues that
connectivity fees. The proposed rule members, issuers, and other persons
the Exchange did not provide sufficient
change was immediately effective upon using its facilities; not permit unfair
information in its filing to support a
filing with the Commission pursuant to finding that the proposal is consistent discrimination between customers,
Section 19(b)(3)(A) of the Act.3 The with the Act.12 Specifically, the issuers, brokers or dealers; and do not
proposed rule change was published for commenter objects to the Exchange’s impose any burden on competition not
comment in the Federal Register on reliance on the fees of other exchanges necessary or appropriate in furtherance
August 13, 2018.4 The Commission has to demonstrate that its fee increases are of the purposes of the Act.19
received one comment letter on the Therefore, the Commission finds that
consistent with the Act. In addition, the
proposal.5 Under Section 19(b)(3)(C) of it is appropriate in the public interest,
commenter argues that the Exchange did
the Act,6 the Commission is hereby: (i) for the protection of investors, and
not offer any details to support its basis
1 15
for asserting that the proposed fee 14 See 17 CFR 240.19b–4 (Item 3 entitled ‘‘Self-
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
increases are consistent with the Act.13 Regulatory Organization’s Statement of the Purpose
daltland on DSKBBV9HB2PROD with NOTICES
3 15 U.S.C. 78s(b)(3)(A). of, and Statutory Basis for, the Proposed Rule
4 See Securities Exchange Act Release No. 83785
7 See Notice, supra note 4 at 40102. Change’’).
8 See id. 15 Id.
(August 7, 2018), 83 FR 40101 (‘‘Notice’’).
5 See Letter from Tyler Gellasch, Executive 9 15 U.S.C. 78s(b)(3)(C). 16 15 U.S.C. 78f(b)(4).
10 15 U.S.C. 78s(b)(1). 17 15 U.S.C. 78f(b)(5).
Director, The Healthy Markets Association, to Brent
11 See Healthy Markets Letter, supra note 5.
J. Fields, Secretary, Commission, dated September 18 15 U.S.C. 78f(b)(8).
4, 2018 (‘‘Healthy Markets Letter’’). 12 See id. at 5. 19 See 15 U.S.C. 78f(b)(4), (5), and (8),
6 15 U.S.C. 78s(b)(3)(C). 13 See id. at 6–7, 12. respectively.
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![47954 Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Notices
otherwise in furtherance of the purposes associated with providing and request for an opportunity to make an
of the Act, to temporarily suspend the maintaining this technology.27 The oral presentation.33
proposed rule changes.20 commenter, among other concerns, The Commission asks that
asserts that the Exchange has not offered commenters address the sufficiency and
IV. Proceedings To Determine Whether
sufficient detail to support that the merit of the Exchange’s statements in
To Approve or Disapprove the
proposed fees are consistent with the support of the proposal, in addition to
Proposed Rule Change
Act and, in particular, whether the any other comments they may wish to
The Commission is instituting proposed fees are reasonable.28 submit about the proposed rule change.
proceedings pursuant to Sections Under the Commission’s Rules of Interested persons are invited to
19(b)(3)(C) 21 and 19(b)(2)(B) of the Practice, the ‘‘burden to demonstrate submit written data, views, and
Act 22 to determine whether the that a proposed rule change is arguments concerning the proposed rule
proposed rule change should be consistent with the [Act] and the rules change, including whether the proposed
approved or disapproved. Institution of and regulations issued thereunder . . . rule change is consistent with the Act.
proceedings does not indicate that the is on the [SRO] that proposed the rule Comments may be submitted by any of
Commission has reached any change.’’ 29 The description of a the following methods:
conclusions with respect to any of the
proposed rule change, its purpose and Electronic Comments
issues involved. Rather, the Commission
operation, its effect, and a legal analysis
seeks and encourages interested persons • Use the Commission’s internet
of its consistency with applicable
to provide additional comment on the comment form (http://www.sec.gov/
requirements must all be sufficiently
proposed rule change to inform the rules/sro.shtml); or
detailed and specific to support an
Commission’s analysis of whether to • Send an email to rule-comments@
affirmative Commission finding,30 and
disapprove the proposed rule change. sec.gov. Please include File Number SR–
any failure of an SRO to provide this
Pursuant to Section 19(b)(2)(B) of the PEARL–2018–16 on the subject line.
information may result in the
Act,23 the Commission is providing
Commission not having a sufficient Paper Comments
notice of the grounds for possible
basis to make an affirmative finding that • Send paper comments in triplicate
disapproval under consideration:
a proposed rule change is consistent
• Section 6(b)(4) of the Act, which to Brent J. Fields, Secretary, Securities
with the Act and the applicable rules and Exchange Commission, 100 F Street
requires that the rules of a national
and regulations.31 NE, Washington, DC 20549–1090.
securities exchange ‘‘provide for the
equitable allocation of reasonable dues, The Commission is instituting All submissions should refer to File
fees, and other charges among its proceedings to allow for additional Number SR–PEARL–2018–16. This file
members and issuers and other persons consideration and comment on the number should be included on the
using its facilities,’’ 24 issues raised herein, including as to subject line if email is used. To help the
• Section 6(b)(5) of the Act, which whether the proposed fees are Commission process and review your
requires, among other things, that the consistent with the Act, and comments more efficiently, please use
rules of a national securities exchange specifically, with its requirements that only one method. The Commission will
be ‘‘designed to perfect the operation of exchange fees be reasonable and post all comments on the Commission’s
a free and open market and a national equitably allocated; be designed to internet website (http://www.sec.gov/
market system’’ and ‘‘protect investors perfect the mechanism of a free and rules/sro.shtml). Copies of the
and the public interest,’’ and not be open market and the national market submission, all subsequent
‘‘designed to permit unfair system, protect investors and the public amendments, all written statements
discrimination between customers, interest, and not be unfairly with respect to the proposed rule
issuers, brokers, or dealers,’’ 25 and discriminatory; or not impose an change that are filed with the
• Section 6(b)(8) of the Act, which unnecessary or inappropriate burden on Commission, and all written
requires that the rules of a national competition.32 communications relating to the
securities exchange ‘‘not impose any V. Commission’s Solicitation of proposed rule change between the
burden on competition not necessary or Comments Commission and any person, other than
appropriate in furtherance of the those that may be withheld from the
purposes of [the Act].’’ 26 The Commission requests written public in accordance with the
As noted above, the proposal views, data, and arguments with respect provisions of 5 U.S.C. 552, will be
increases connectivity fees for physical to the concerns identified above as well available for website viewing and
connections to the Exchange. The as any other relevant concerns. Such printing in the Commission’s Public
Exchange states that this fee increase comments should be submitted by Reference Room, 100 F Street NE,
would allow the Exchange to offset costs October 12, 2018. Rebuttal comments Washington, DC 20549 on official
should be submitted by October 26, business days between the hours of
20 For purposes of temporarily suspending the
2018. Although there do not appear to 10:00 a.m. and 3:00 p.m. Copies of the
proposed rule change, the Commission has
considered the proposed rule’s impact on
be any issues relevant to approval or filing also will be available for
efficiency, competition, and capital formation. See disapproval which would be facilitated inspection and copying at the principal
15 U.S.C. 78c(f). by an oral presentation of views, data, office of the Exchange. All comments
21 15 U.S.C. 78s(b)(3)(C). Once the Commission
and arguments, the Commission will received will be posted without change.
temporarily suspends a proposed rule change, consider, pursuant to Rule 19b–4, any
Section 19(b)(3)(C) of the Act requires that the
daltland on DSKBBV9HB2PROD with NOTICES
33 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act
Commission institute proceedings under Section
19(b)(2)(B) to determine whether a proposed rule 27 See Notice, supra note 4, at 40102. grants the Commission flexibility to determine what
change should be approved or disapproved. 28 See Healthy Markets Letter, supra note 5, at 6. type of proceeding—either oral or notice and
22 15 U.S.C. 78s(b)(2)(B). 29 Rule 700(b)(3), Commission Rules of Practice,
opportunity for written comments—is appropriate
23 15 U.S.C. 78s(b)(2)(B).
for consideration of a particular proposal by an
17 CFR 201.700(b)(3). SRO. See Securities Acts Amendments of 1975,
24 15 U.S.C. 78f(b)(4). 30 See id.
Report of the Senate Committee on Banking,
25 15 U.S.C. 78f(b)(5). 31 See id.
Housing and Urban Affairs to Accompany S. 249,
26 15 U.S.C. 78f(b)(8). 32 See 15 U.S.C. 78f(b)(4), (5), and (8). S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975).
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![Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Notices 47955
Persons submitting comments are rule change was published for comment information in its filing to support a
cautioned that we do not redact or edit in the Federal Register on August 13, finding that the proposal is consistent
personal identifying information from 2018.4 The Commission has received with the Act.12 Specifically, the
comment submissions. You should one comment letter on the proposal.5 commenter objects to the Exchange’s
submit only information that you wish Under Section 19(b)(3)(C) of the Act,6 reliance on the fees of other exchanges
to make available publicly. All the Commission is hereby: (i) to demonstrate that its fee increases are
submissions should refer to File Temporarily suspending the proposed consistent with the Act. In addition, the
Number SR–PEARL–2018–16 and rule change; and (ii) instituting commenter argues that the Exchange did
should be submitted on or before proceedings to determine whether to not offer any details to support its basis
October 12, 2018. Rebuttal comments approve or disapprove the proposed for asserting that the proposed fee
should be submitted by October 26, rule change. increases are consistent with the Act.13
2018. The Exchange has not responded to the
II. Description of the Proposed Rule comment letter.
VI. Conclusion Change When exchanges file their proposed
It is therefore ordered, pursuant to The Exchange proposes to amend its rule changes with the Commission,
Section 19(b)(3)(C) of the Act,34 that File fee schedule to increase its monthly including fee filings like the Exchange’s
Number SR–PEARL–2018–16 be and network connectivity fees. Specifically, present proposal, they are required to
hereby is, temporarily suspended. In the Exchange proposes to increase the provide a statement supporting the
addition, the Commission is instituting connectivity fee for connectivity to the proposal’s basis under the Act and the
proceedings to determine whether the Exchange’s primary/secondary facility rules and regulations thereunder
proposed rule change should be from $1,100 to $1,400 for a 1 Gigabit applicable to the exchange.14 The
approved or disapproved. (‘‘Gb’’) connection, from $5,500 to instructions to Form 19b–4, on which
For the Commission, by the Division of $6,100 for a 10Gb connection, and from exchanges file their proposed rule
Trading and Markets, pursuant to delegated $8,500 to $9,300 for a 10Gb ultra-low changes, specify that such statement
authority.35 latency connection.7 In addition, the ‘‘should be sufficiently detailed and
Brent J. Fields, Exchange proposes to increase the specific to support a finding that the
Secretary. network connectivity fees for proposed rule change is consistent with
connectivity to the Exchange’s disaster [those] requirements.’’ 15
[FR Doc. 2018–20545 Filed 9–20–18; 8:45 am]
recovery facility from $500 to $550 for Among other things, exchange
BILLING CODE 8011–01–P
a 1Gb connection and from $2,500 to proposed rule changes are subject to
$2,750 for a 10Gb connection.8 Section 6 of the Act, including Sections
6(b)(4), (5), and (8), which requires the
SECURITIES AND EXCHANGE III. Suspension of the Proposed Rule rules of an exchange to (1) provide for
COMMISSION Change the equitable allocation of reasonable
[Release No. 34–84175; File No. SR–MIAX– Pursuant to Section 19(b)(3)(C) of the fees among members, issuers, and other
2018–19] Act,9 at any time within 60 days of the persons using the exchange’s
date of filing of a proposed rule change facilities; 16 (2) perfect the mechanism of
Self-Regulatory Organizations; Miami a free and open market and a national
International Securities Exchange LLC; pursuant to Section 19(b)(1) of the
Act,10 the Commission summarily may market system, protect investors and the
Suspension of and Order Instituting public interest, and not be designed to
Proceedings To Determine Whether To temporarily suspend the change in the
rules of a self-regulatory organization permit unfair discrimination between
Approve or Disapprove a Proposed customers, issuers, brokers, or
Rule Change To Amend the Fee (‘‘SRO’’) if it appears to the Commission
that such action is necessary or dealers; 17 and (3) not impose any
Schedule Regarding Connectivity Fees burden on competition not necessary or
for Members and Non-Members appropriate in the public interest, for
the protection of investors, or otherwise appropriate in furtherance of the
September 17, 2018. in furtherance of the purposes of the purposes of the Act.18
Act. As discussed below, the In temporarily suspending the
I. Introduction Exchange’s fee change, the Commission
Commission believes a temporary
On July 31, 2018, Miami International suspension of the proposed rule change intends to further consider whether
Securities Exchange LLC (‘‘MIAX’’ or is necessary and appropriate to allow for increasing certain connectivity fees to
the ‘‘Exchange’’) filed with the additional analysis of the proposed rule the Exchange is consistent with the
Securities and Exchange Commission change’s consistency with the Act and statutory requirements applicable to a
(‘‘Commission’’), pursuant to Section the rules thereunder. national securities exchange under the
19(b)(1) of the Securities Exchange Act As noted above, the Commission Act. In particular, the Commission will
of 1934 (‘‘Act’’),1 and Rule 19b–4 received one comment letter on the consider whether the proposed rule
thereunder,2 a proposed rule change proposal.11 The commenter argues that change satisfies the standards under the
(File Number SR–MIAX–2018–19) to the Exchange did not provide sufficient Act and the rules thereunder requiring,
amend the MIAX fee schedule to among other things, that an exchange’s
increase certain connectivity fees. The 4 See Securities Exchange Act Release No. 83786 rules provide for the equitable
proposed rule change was immediately (August 7, 2018), 83 FR 40106 (‘‘Notice’’).
5 See Letter from Tyler Gellasch, Executive 12 See id. at 5.
effective upon filing with the
Director, The Healthy Markets Association, to Brent 13 See id. at 6–7, 12.
Commission pursuant to Section
daltland on DSKBBV9HB2PROD with NOTICES
J. Fields, Secretary, Commission, dated September 14 See 17 CFR 240.19b–4 (Item 3 entitled ‘‘Self-
19(b)(3)(A) of the Act.3 The proposed 4, 2018 (‘‘Healthy Markets Letter’’). Regulatory Organization’s Statement of the Purpose
6 15 U.S.C. 78s(b)(3)(C).
of, and Statutory Basis for, the Proposed Rule
34 15 U.S.C. 78s(b)(3)(C). 7 See Notice, supra note 4 at 40106. Change’’).
35 17 CFR 200.30–3(a)(57) and (58). 8 See id. 15 Id.
1 15 U.S.C. 78s(b)(1). 9 15 U.S.C. 78s(b)(3)(C). 16 15 U.S.C. 78f(b)(4).
2 17 CFR 240.19b–4. 10 15 U.S.C. 78s(b)(1). 17 15 U.S.C. 78f(b)(5).
3 15 U.S.C. 78s(b)(3)(A). 11 See Healthy Markets Letter, supra note 5. 18 15 U.S.C. 78f(b)(8).
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Document Created: 2018-09-21 00:23:00
Document Modified: 2018-09-21 00:23:00
| 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 47953 |
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