[Federal Register Volume 79, Number 134 (Monday, July 14, 2014)]
[Notices]
[Pages 40820-40822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-16372]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72566; File No. SR-MIAX-2014-32]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule
July 8, 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 June 25, 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 amend its Fee Schedule.
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.
[[Page 40821]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to establish a $0.45 transaction fee for
executions in standard option contracts and $0.045 transaction fee for
Mini Option contracts for non-member broker-dealers on the Exchange.
The current transaction fees for non-member broker-dealers on the
Exchange are $0.30 per contract for standard options or $0.03 for Mini
Options.\3\ In February 2014, the Exchange lowered the transaction fees
for non-member broker-dealers from $0.45 per contract for standard
options or $0.045 for Mini Options to the current rates.\4\ The
Exchange lowered the non-member broker-dealer fees in order to enhance
the Exchange's competitiveness with other option exchanges and to
strengthen its market quality. The Exchange believed that the
transaction fees would increase both intermarket and intramarket
competition by incenting broker-dealers on other exchanges to direct
additional orders to the Exchange to allow the Exchange to compete more
effectively with other options exchanges for such transactions.
However, after several months experience with the lower transaction fee
rate for non-member broker-dealers, the Exchange has noticed a limited
impact on the Exchange's competitiveness for non-member broker-dealer
transactions. The Exchange now proposes increasing the non-member
broker-dealer transaction fees in order to bring the fee rates back in
line with the current non-MIAX market maker fee rates and to generate
additional revenue. As proposed, both non-member broker-dealers and
non-MIAX market makers would be charged $0.45 transaction fee for
executions in standard option contracts and $0.045 transaction fee for
Mini Option contracts. The proposal will also bring the non-member
broker-dealer transaction fee rates back in line with the same fee rate
available on other options exchanges.\5\
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\3\ See MIAX Options Fee Schedule, Section 1(a)(ii)--Other
Market Participant Transaction Fees.
\4\ See Securities Exchange Act Release No. 71502 (February 6,
2014), 79 FR 8519 (February 12, 2014) (SR-MIAX-2014-06).
\5\ See Chicago Board Options Exchange, Incorporated, Fees
Schedule, p. 1; International Securities Exchange, LLC, Schedule of
Fees, p. 6.
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The Exchange proposes to implement the new transaction fees
beginning July 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 proposal is fair, equitable and not
unreasonably discriminatory [sic]. The proposal is reasonable because
it results in an increase in non-member broker-dealer transactions fees
for all non-member broker-dealers on the Exchange and results in a
transaction fee rate that is identical to the similar transaction fees
on other competing options exchanges. The proposed fees are fair and
equitable and not unreasonably discriminatory [sic] because they will
apply equally to all non-member broker-dealers. All non-member broker-
dealers will be subject to the same transaction fee, and access to the
Exchange is offered on terms that are not unfairly discriminatory. The
proposed fees are equitable and not unreasonably discriminatory [sic]
because it eliminates the previous disparate treatment in transaction
fees between non-member broker-dealers and non-MIAX market makers by
increasing the non-member broker-dealer transaction fees to bring the
fee rates back in line with the current non-MIAX market maker fee
rates.
In addition, the Exchange believes that increasing the non-member
broker-dealer transaction fees which results in charging non-member
broker-dealers more for transactions than for Members, is a fair and
equitable allocation of reasonable fees, and not unreasonably
discriminatory [sic]. Charging non-members higher transaction fees is a
common practice amongst exchanges because Members are subject to other
fees and dues associated with their membership to the Exchange that do
not apply to non-members. To the extent that there is additional
competitive burden on non-member broker-dealers, the Exchange believes
that this is appropriate because the proposal could incent non-member
broker-dealers to apply to be Members of the exchange, which is open to
all market participants equally 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 proposed fee will allow the
Exchange to increase revenue while remaining competitive with other
exchanges by changing its rate to the same level. The Exchange believes
that the proposal should promote competition between non-member broker-
dealers and non-MIAX market makers by eliminating the previous
disparate treatment in transaction fees between non-member brokers and
non-MIAX market makers by increasing the non-member broker-dealer
transaction fees to bring the fee rates back in line with the current
non-MIAX market maker fee rates. To the extent that there is additional
competitive burden on non-member broker dealers, the Exchange believes
that this is appropriate because the proposal could incent non-member
broker-dealers to apply to be Members of the exchange, which is open to
all market participants equally on non-discriminatory terms. 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. The Exchange believes
that the proposal reflects this competitive environment.
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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[[Page 40822]]
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-2014-32 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-2014-32. 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 available publicly. All
submissions should refer to File Number SR-MIAX-2014-32 and should be
submitted on or before August 4, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-16372 Filed 7-11-14; 8:45 am]
BILLING CODE 8011-01-P