Federal Register, Volume 79 Issue 28 (Tuesday, February 11, 2014)

[Federal Register Volume 79, Number 28 (Tuesday, February 11, 2014)]
[Notices]
[Pages 8213-8215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-02878]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71490; File No. SR-MIAX-2014-04]


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

February 5, 2014.
    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on January 28, 2014, Miami International 
Securities Exchange LLC (``MIAX'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by the Exchange. The Commission is publishing this notice 
to solicit comments on the proposed rule change from interested 
persons.
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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 modify the Market Maker 
Trading Permit Fee.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.miaxoptions.com/filter/wotitle/rule_filing, 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 modify its Market Maker Trading Permit fee 
to increase the monthly Trading Permit fee

[[Page 8214]]

that applies to Registered Market Makers (``RMMs''). Specifically, the 
Exchange proposes to increase the monthly Trading Permit fee that 
applies to RMMs by $1,000, so that it is the same as fees that 
currently apply to Primary Lead Market Makers (``PLMMs'') and Lead 
Market Makers (``LMMs'').
    The Exchange issues Trading Permits that confer the ability to 
transact on the Exchange.\3\ The Exchange assesses monthly fees for 
Trading Permits depending upon the category of Member that is issued a 
particular trading permit.\4\ EEMs are assessed a monthly fee of $1,000 
for a Trading Permit. Registered Market Makers (``RMMs'') are assessed 
$3,000.00 per month for a Trading Permit for an RMM assignment in up to 
100 option classes, $4,500.00 per month for a Trading Permit for an RMM 
assignment in up to 250 option classes, or $6,000.00 per month for a 
Trading Permit for an RMM assignment in all option classes listed on 
MIAX.\5\ Primary Lead Market Makers (``PLMMs'') and Lead Market Makers 
(``LMMs'') are assessed the same monthly Trading Permit fees applicable 
to RMMs described above plus $1,000.00 per month. Thus, an LMM or PLMM 
are [sic] be assessed $4,000.00 per month for a Trading Permit for an 
LMM or PLMM assignment in up to 100 option classes, $5,500.00 per month 
for a Trading Permit for an LMM or PLMM assignment in up to 250 option 
classes, or $7,000.00 per month for a Trading Permit for an LMM or PLMM 
assignment in all option classes listed on MIAX.
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    \3\ There is no limit on the number of Trading Permits that may 
be issued by the Exchange; however the Exchange has the authority to 
limit or decrease the number of Trading Permits it has determined to 
issue provided it complies with the provisions set forth in Rule 
200(a) and Section 6(c)(4) of the Exchange Act. See 15 U.S.C. 
78f(c)(4). For a complete description of MIAX Trading Permits, see 
MIAX Rule 200.
    \4\ The monthly Trading Permit Fee is in addition to the one-
time application fee for MIAX Membership. The Exchange charges a 
one-time application fee based upon the applicant's status as either 
an Electronic Exchange Member (``EEM'') or as a Market Maker. 
Applicants for MIAX Membership as an EEM are assessed a one-time 
Application Fee of $2,500.00. Applicants for MIAX Membership as a 
Market Maker are assessed a one-time Application Fee of $3,000.00. 
The difference in the fee charged to EEMs and Market Makers reflects 
the additional review and processing effort needed for Market Maker 
applications.
    \5\ For the calculation of the monthly RMM Trading Permit Fees, 
the number of classes is defined as the greatest number of classes 
the RMM was assigned to quote in on any given day within the 
calendar month.
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    The Exchange proposes to increase the monthly Trading Permit fee 
that applies to RMMs by $1,000, so that it is the same as fees that 
currently apply to PLMMs and LMMs. All Market Makers, whether they are 
a RMM, LMM or PLMM, will be assessed $4,000.00 per month for a Trading 
Permit for an assignment in up to 100 option classes, $5,500.00 per 
month for a Trading Permit for an assignment in up to 250 option 
classes, or $7,000.00 per month for a Trading Permit for an assignment 
in all option classes listed on the Exchange. The Exchange notes that 
few Market Makers have registered as RMMs, irrespective of the slightly 
lower monthly fee. As such, the Exchange believes that it is 
unnecessary to continue to charge a different Trading Permit fee to 
RMMs versus LMMs and PLMMs. The Exchange believes that the change will 
result in a less discriminatory fee structure for Market Maker Trading 
Permits, pursuant to which all Market Makers will be treated the same 
based on the number of assignments.
    The Exchange notes that the monthly Trading Permit fees are 
generally lower than monthly trading permit fees in place at CBOE and 
the NASDAQ OMX PHLX LLC (``PHLX''). The $1,000 monthly Trading Permit 
fee assessed to EEMs is lower than the CBOE's monthly electronic access 
trading permit fee ($1,600) and the PHLX's monthly permit fee for 
members ($2,150). The Monthly Trading Permit Fees assessed to MIAX 
Market Makers is readily comparable to and lower than the monthly fees 
in place at PHLX for Remote Streaming Quote Traders ($5,000 per month 
for less than 100 classes, $8,000 per month for more than 100 classes 
and less than 999 classes, and $11,000 per month for 1,000 or more 
classes).
    Members receiving Trading Permits during the month will be assessed 
Trading Permit Fees according to the above schedule, except that the 
calculation of the Trading Permit fee for the first month in which the 
Trading Permit is issued will be pro-rated based on the number of 
trading days occurring after the date on which the Trading Permit was 
in effect during that first month divided by the total number of 
trading days in such month multiplied by the monthly rate.
    The Exchange proposes to implement the Trading Permit fees 
beginning February 1, 2014.
2. Statutory Basis
    The Exchange believes that its proposal to amend its fee schedule 
is consistent with Section 6(b) of the Act \6\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \7\ in particular, in that 
it is an equitable allocation of reasonable fees and other charges 
among Exchange members.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed Trading Permit fee is 
reasonable, equitable and not unfairly discriminatory. The Exchange 
notes that the Trading Permit fees are lower than comparable fees at 
other exchanges as described in the Purpose section above. As such, the 
proposal is reasonably designed because it will incent market 
participants to register as Market Makers on the Exchange in a manner 
that enables the Exchange to improve its overall competitiveness and 
strengthen its market quality for all market participants. The proposed 
fee is fair and equitable and not unreasonably discriminatory because 
it will enable the Trading Permit fee to apply equally to all Market 
Makers regardless of type. All similarly situated Market Makers, with 
the same number of assignments, will be subject to the same Trading 
Permit fee, and access to the Exchange is offered on terms that are not 
unfairly discriminatory.

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 Exchange believes that the 
proposal increases both intermarket and intramarket competition by 
marginally increasing Trading Permit fees for Market Makers on the 
Exchange in a manner that allows all Market Makers to be subject to the 
same fee based on the number of assignments regardless of type and yet 
still be lower than comparable fees on other exchanges. The Exchange 
notes that it operates in a highly competitive market in which market 
participants can readily favor competing venues if they deem fee levels 
at a particular venue to be excessive. In such an environment, the 
Exchange must continually adjust its fees to remain competitive with 
other exchanges and to attract order flow to the Exchange. The Exchange 
believes that the proposal reflects this competitive environment 
because it increases the Exchange's fees in a manner that continues to 
encourage market participants to register as Market Makers on the 
Exchange, to provide liquidity, and to attract order flow. To the 
extent that this purpose is achieved, all the Exchange's market 
participants should benefit from the improved market liquidity.

[[Page 8215]]

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.\8\ 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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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-2014-04 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MIAX-2014-04. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public 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; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make publicly available.
    All submissions should refer to File Number SR-MIAX-2014-04 and 
should be submitted on or before March 4, 2014.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02878 Filed 2-10-14; 8:45 am]
BILLING CODE 8011-01-P