Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 / Notices 40595 

24 15 U.S.C. 78s(b)(3)(A)(ii). 

25 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The term ‘‘MBBO’’ means the best bid or offer 

on the Exchange. See Exchange Rule 100. See also 

Exchange Rule 506(c)(2). 

4The term ‘‘Public Customer’’ means a person 

that is not a broker or dealer in securities. See 

Exchange Rule 100. 

5The term ‘‘Priority Customer’’ means a person 

or entity that (i) is not a broker or dealer in 

securities, and (ii) does not place more than 390 

orders in listed options per day on average during 

a calendar month for its own beneficial account(s). 

See Exchange Rule 100. 

6See Securities Exchange Act Release No. 69007 

(February 28, 2013), 78 FR 14617 (March 6, 2013) 

(SR–MIAX–2013–05). 

7See id. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or 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.24

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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. 

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 rule-comments@

sec.gov. Please include File Number SR– 

BX–2018–036 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–BX–2018–036. 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–BX–2018–036 and should 

be submitted on or before September 5, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–17491 Filed 8–14–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83813; File No. SR–MIAX– 

2018–20] 

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 9, 2018. 

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 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. 

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’’) to delete a fee 

waiver relating to certain market data 

feed products. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings, 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 its 

Fee Schedule to delete a fee waiver 

relating to certain market data feed 

products offered by the Exchange— 

namely, the Exchange’s Administrative 

Information Subscriber (‘‘AIS’’) market 

data feed, and the Exchange’s Top of 

Market (‘‘ToM’’) market data feed. 

The ToM market data feed includes 

data that is identical to the data sent to 

the processor for the Options Price 

Regulatory Authority (‘‘OPRA’’). ToM 

provides real-time updates of the MIAX 

Best Bid or Offer, or MBBO,3 price with 

aggregate orders and quote size of 

contracts that can be displayed, display 

of Public Customer 4 interest at the 

MBBO, display of Priority Customer 5

interest at the MBBO, and MIAX 

Options last sale.6 The Exchange 

launched ToM in early 2013,7 and 


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8See Securities Exchange Act Release No. 69323 

(April 5, 2013), 78 FR 21677 (April 11, 2013) (SR– 

MIAX–2013–14). 

9See Securities Exchange Act Release No. 69320 

(April 5, 2013), 78 FR 21661 (April 11, 2013) (SR– 

MIAX–2013–13). 

10See Securities Exchange Act Release No. 73326 

(October 9, 2014), 79 FR 62233 (October 16, 2014) 

(SR–MIAX–2014–51). 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(4). 

13The 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. 

14 15 U.S.C. 78f(b)(5). 

15See supra note 10. 

16Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005). 

adopted monthly fees shortly 

thereafter.8 The Exchange assesses a 

monthly fee of $1,250.00 for ToM 

Internal Distributors and a monthly fee 

of $1,750.00 for ToM External 

Distributors. 

The Exchange began offering its AIS 

market data feed in April 2013.9 The 

AIS market data feed currently includes 

administrative information for both 

simple and complex orders. The AIS 

market data feed includes: Simple and 

complex liquidity seeking event 

notifications, listed series updates, 

complex strategy definition updates, 

system state, and underlying trading 

state information. The Exchange 

assesses a monthly fee of $1,250.00 for 

all AIS Internal Distributors and a 

monthly fee of $1,750.00 for all AIS 

External Distributors. However, the 

monthly fee for Distributors of AIS is 

presently waived if the Distributor also 

subscribes to ToM.10

Accordingly, under the present 

operation of the Fee Schedule, a 

subscriber who only subscribes to AIS 

will be charged the AIS monthly fee 

($1,250.00 for Internal Distributors and 

$1,750.00 for External Distributors). A 

subscriber who only subscribes to ToM 

will be charged the ToM monthly fee 

($1,250.00 for Internal Distributors and 

$1,750.00 for External Distributors). A 

subscriber who subscribes to both ToM 

and AIS will be charged only the ToM 

monthly fee ($1,250.00 for Internal 

Distributors and $1,750.00 for External 

Distributors). 

The Exchange now proposes to delete 

the fee waiver which entitles a 

subscriber of both ToM and AIS to 

receive a fee waiver for AIS. 

Accordingly, pursuant to this proposal, 

a subscriber to both ToM and AIS would 

now be assessed a separate fee for each 

of the data feeds. A subscriber who is an 

Internal Distributor will now pay 

$2,500.00 in the aggregate, if subscribing 

to both feeds, and a subscriber who is 

an External Distributor will now pay 

$3,500.00 in the aggregate, if subscribing 

to both feeds. 

The Exchange is not proposing to 

modify any other aspect of either the 

AIS market data feed product or the 

ToM market data feed product. The 

Exchange is solely deleting the fee 

waiver which presently entitles a 

subscriber of ToM to also receive a 

subscription to AIS for free. 

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) 11 of the Act 

in general, and furthers the objectives of 

Section 6(b)(4) 12 of the Act, in that it is 

designed to provide for an equitable 

allocation of reasonable dues, fees and 

other charges among Exchange 

Members 13 and other persons using its 

facilities, because it applies equally to 

all Members and any persons using the 

facilities or services of the Exchange. 

The Exchange also believes that the 

proposal furthers the objectives of 

Section 6(b)(5) 14 of the Act in 

particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest, and it is not designed to 

permit unfair discrimination among 

customers, brokers, or dealers. 

The Exchange believes that the 

proposed amendment to delete a fee 

waiver relating to certain market data 

feed products offered by the Exchange— 

namely, the Exchange’s AIS market data 

feed, and the Exchange’s ToM market 

data feed—is reasonable, equitable, and 

not unfairly discriminatory. The 

Exchange has offered an AIS fee waiver 

to ToM subscribers since the inception 

of AIS.15 The Exchange determined to 

establish and continue the AIS fee 

waiver for business and competitive 

reasons, in order to encourage ToM 

subscribers to subscribe to the AIS feed. 

The Exchange now believes that it is 

appropriate to delete the fee waiver, 

based on a business determination of 

the number of ToM feed and AIS feed 

subscribers, with the fee waiver having 

achieved the intended result. 

The Exchange anticipates the changes 

will result in a reasonable allocation of 

its costs and expenses among its 

Members and other persons using its 

facilities because the proposed fees 

would enable the Exchange to recover 

the costs associated with providing such 

infrastructure, and with offering access 

through the network connections and 

access and services, responding to 

customer requests, configuring MIAX 

Options systems, and administering the 

various services connectivity services. 

The Exchange believes the proposed 

fees are equitable and not unfairly 

discriminatory because the new fee 

levels result in a more reasonable and 

equitable allocation of fees amongst 

non-Members and Members for similar 

services. Access to the Exchange is 

provided on fair and non-discriminatory 

terms. Moreover, the decision as to 

whether or not to subscribe to AIS is 

entirely optional to all parties. Potential 

subscribers are not required to purchase 

the AIS market data feed. Subscribers 

can discontinue their use at any time 

and for any reason, including due to 

their assessment of the reasonableness 

of fees charged. The allocation of fees 

among subscribers is fair and reasonable 

because, if the market deems the 

proposed fees to be unfair or 

inequitable, firms can diminish or 

discontinue their use of this data. 

In adopting Regulation NMS, the 

Commission granted self-regulatory 

organizations and broker-dealers 

increased authority and flexibility to 

offer new and unique market data to the 

public. It was believed that this 

authority would expand the amount of 

data available to consumers, and also 

spur innovation and competition for the 

provision of market data: 

[E]fficiency is promoted when brokerdealers who do not need the data beyond the 

prices, sizes, market center identifications of 

the NBBO and consolidated last sale 

information are not required to receive (and 

pay for) such data when broker-dealers may 

choose to receive (and pay for) additional 

market data based on their own internal 

analysis of the need for such data.16

By removing ‘‘unnecessary regulatory 

restrictions’’ on the ability of exchanges 

to sell their own data, Regulation NMS 

advanced the goals of the Act and the 

principles reflected in its legislative 

history. If the free market should 

determine whether proprietary data is 

sold to broker-dealers at all, it follows 

that the price at which such data is sold 

should be set by the market as well. 

In July, 2010, Congress adopted H.R. 

4173, the Dodd-Frank Wall Street 

Reform and Consumer Protection Act of 

2010 (‘‘Dodd-Frank Act’’), which 

amended Section 19 of the Act. Among 


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17NetCoaltion, at 15 (quoting H.R. Rep. No. 94– 

229, at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 

321, 323). 

other things, Section 916 of the DoddFrank Act amended paragraph (A) of 

Section 19(b)(3) of the Act by inserting 

the phrase ‘‘on any person, whether or 

not the person is a member of the selfregulatory organization’’ after ‘‘due, fee 

or other charge imposed by the selfregulatory organization.’’ As a result, all 

SRO rule proposals establishing or 

changing dues, fees or other charges are 

immediately effective upon filing 

regardless of whether such dues, fees or 

other charges are imposed on members 

of the SRO, non-members, or both. 

Section 916 further amended paragraph 

(C) of Section 19(b)(3) of the Act to read, 

in pertinent part, ‘‘At any time within 

the 60-day period beginning on the date 

of filing of such a proposed rule change 

in accordance with the provisions of 

paragraph (1) [of Section 19(b)], the 

Commission summarily may 

temporarily suspend the change in the 

rules of the self-regulatory organization 

made thereby, 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 this title. If the Commission 

takes such action, the Commission shall 

institute proceedings under paragraph 

(2)(B) [of Section 19(b)] to determine 

whether the proposed rule should be 

approved or disapproved.’’ 

The Exchange believes that these 

amendments to Section 19 of the Act 

reflect Congress’s intent to allow the 

Commission to rely upon the forces of 

competition to ensure that fees for 

market data are reasonable and 

equitably allocated. Although Section 

19(b) had formerly authorized 

immediate effectiveness for a ‘‘due, fee 

or other charge imposed by the selfregulatory organization,’’ the 

Commission adopted a policy and 

subsequently a rule stating that fees for 

data and other products available to 

persons that are not members of the selfregulatory organization must be 

approved by the Commission after first 

being published for comment. At the 

time, the Commission supported the 

adoption of the policy and the rule by 

pointing out that unlike members, 

whose representation in self-regulatory 

organization governance was mandated 

by the Act, non-members should be 

given the opportunity to comment on 

fees before being required to pay them, 

and that the Commission should 

specifically approve all such fees. The 

Exchange believes that the amendment 

to Section 19 reflects Congress’s 

conclusion that the evolution of selfregulatory organization governance and 

competitive market structure have 

rendered the Commission’s prior policy 

on non-member fees obsolete. 

Specifically, many exchanges have 

evolved from member-owned, not-forprofit corporations into for-profit, 

investor-owned corporations (or 

subsidiaries of investor-owned 

corporations). Accordingly, exchanges 

no longer have narrow incentives to 

manage their affairs for the exclusive 

benefit of their members, but rather 

have incentives to maximize the appeal 

of their products to all customers, 

whether members or non-members, so 

as to broaden distribution and grow 

revenues. Moreover, the Exchange 

believes that the change also reflects an 

endorsement of the Commission’s 

determinations that reliance on 

competitive markets is an appropriate 

means to ensure equitable and 

reasonable prices. Simply put, the 

change reflects a presumption that all 

fee changes should be permitted to take 

effect immediately, since the level of all 

fees are constrained by competitive 

forces. The Exchange therefore believes 

that the fees for AIS are properly 

assessed on Internal and External 

Distributors. 

The decision of the United States 

Court of Appeals for the District of 

Columbia Circuit in NetCoaliton v. SEC, 

No. 09–1042 (D.C. Cir. 2010), although 

reviewing a Commission decision made 

prior to the effective date of the DoddFrank Act, upheld the Commission’s 

reliance upon competitive markets to set 

reasonable and equitably allocated fees 

for market data: 

‘‘In fact, the legislative history indicates 

that the Congress intended that the market 

system ‘evolve through the interplay of 

competitive forces as unnecessary regulatory 

restrictions are removed’ and that the SEC 

wield its regulatory power ‘in those 

situations where competition may not be 

sufficient,’ such as in the creation of a 

‘consolidated transactional reporting 

system.’ ’’ 17

The court’s conclusions about 

Congressional intent are therefore 

reinforced by the Dodd-Frank Act 

amendments, which create a 

presumption that exchange fees, 

including market data fees, may take 

effect immediately, without prior 

Commission approval, and that the 

Commission should take action to 

suspend a fee change and institute a 

proceeding to determine whether the fee 

change should be approved or 

disapproved only where the 

Commission has concerns that the 

change may not be consistent with the 

Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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. 

Notwithstanding its determination that 

the Commission may rely upon 

competition to establish fair and 

equitably allocated fees for market data, 

the NetCoalition Court found that the 

Commission had not, in that case, 

compiled a record that adequately 

supported its conclusion that the market 

for the data at issue in the case was 

competitive. The Exchange believes that 

a record may readily be established to 

demonstrate the competitive nature of 

the market in question. 

The market for data products is 

extremely competitive and users may 

freely choose alternative venues and 

data vendors based on the aggregate fees 

assessed, the data offered, and the value 

provided. Numerous exchanges compete 

with each other for listings, trades, and 

market data itself, providing virtually 

limitless opportunities for entrepreneurs 

who wish to produce and distribute 

their own market data. Transaction 

execution and proprietary data products 

are complementary in that market data 

is both an input and a byproduct of the 

execution service. In fact, market data 

and trade execution are a paradigmatic 

example of joint products with joint 

costs. The decision whether and on 

which platform to post an order will 

depend on the attributes of the platform 

where the order can be posted, 

including the execution fees, data 

quality and price, and distribution of its 

data products. Without trade 

executions, exchange data products 

cannot exist. Moreover, data products 

are valuable to many end users only 

insofar as they provide information that 

end users expect will assist them or 

their customers in making trading 

decisions. 

The costs of producing market data 

include not only the costs of the data 

distribution infrastructure, but also the 

costs of designing, maintaining, and 

operating the exchange’s transaction 

execution platform and the cost of 

regulating the exchange to ensure its fair 

operation and maintain investor 

confidence. The total return that a 

trading platform earns reflects the 

revenues it receives from both products 

and the joint costs it incurs. Moreover, 

the operation of the Exchange is 

characterized by high fixed costs and 

low marginal costs. This cost structure 


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18See William J. Baumol and Daniel G. Swanson, 

‘‘The New Economy and Ubiquitous Competitive 

Price Discrimination: Identifying Defensible Criteria 

of Market Power,’’ Antitrust Law Journal, Vol. 70, 

No. 3 (2003). 

is common in content distribution 

industries such as software, where 

developing new software typically 

requires a large initial investment (and 

continuing large investments to upgrade 

software), but once the software is 

developed, the incremental cost of 

providing that software to an additional 

user is typically small, or even zero 

(e.g., if the software can be downloaded 

over the internet after being 

purchased).18 In the case of any 

exchange, it is costly to build and 

maintain a trading platform, but the 

incremental cost of trading each 

additional share on an existing platform, 

or distributing an additional instance of 

data, is very low. Market information 

and executions are each produced 

jointly (in the sense that the activities of 

trading and placing orders are the 

source of the information that is 

distributed) and are each subject to 

significant scale economies. 

Competition among trading platforms 

can be expected to constrain the 

aggregate return each platform earns 

from the sale of its joint products. The 

level of competition and contestability 

in the market is evidence in the 

numerous alternative venues that 

compete for order flow, including SRO 

markets, as well as internalizing BDs 

and various forms of alternative trading 

systems (‘‘ATSs’’), including dark pools 

and electronic communication networks 

(‘‘ECNs’’). Each SRO market competes to 

produce transaction reports via trade 

executions. It is common for BDs to 

further and exploit this competition by 

sending their order flow and transaction 

reports to multiple markets, rather than 

providing them all to a single market. 

Competitive markets for order flow, 

executions, and transaction reports 

provide pricing discipline for the inputs 

of proprietary data products. The large 

number of SROs, TRFs, BDs, and ATSs 

that currently produce proprietary data 

or are currently capable of producing it 

provides further pricing discipline for 

proprietary data products. Each SRO, 

TRF, ATS, and BD is currently 

permitted to produce proprietary data 

products, and many currently do or 

have announced plans to do so, 

including the Nasdaq exchanges, NYSE 

exchanges, and CBOE/Bats exchanges. 

In this competitive environment, an 

‘‘excessive’’ price for one product will 

have to be reflected in lower prices for 

other products sold by the Exchange, or 

otherwise the Exchange may experience 

a loss in sales that may adversely affect 

its profitability. In this case, the 

proposed rule change enhances 

competition by providing Historical 

Market Data at a fixed price. As such, 

the Exchange believes that the proposed 

changes will enhance, not impair, 

competition in the financial markets. 

The market for market data products 

is competitive and inherently 

contestable because there is fierce 

competition for the inputs necessary to 

the creation of proprietary data and 

strict pricing discipline for the 

proprietary products themselves. 

Numerous exchanges compete with 

each other for listings, trades, and 

market data itself, providing virtually 

limitless opportunities for entrepreneurs 

who wish to produce and distribute 

their own market data. This proprietary 

data is produced by each individual 

exchange, as well as other entities, in a 

vigorously competitive market. Brokerdealers currently have numerous 

alternative venues for their order flow, 

including eleven existing options 

markets. Each SRO market competes to 

produce transaction reports via trade 

executions. Competitive markets for 

order flow, executions, and transaction 

reports provide pricing discipline for 

the inputs of proprietary data products. 

The large number of SROs that currently 

produce proprietary data or are 

currently capable of producing it 

provides further pricing discipline for 

proprietary data products. Each SRO is 

currently permitted to produce 

proprietary data products, and many in 

addition to MIAX Options currently do, 

including Nasdaq, CBOE, Nasdaq ISE, 

NYSE American, and NYSE Arca. 

Additionally, order routers and market 

data vendors can facilitate single or 

multiple broker-dealers’ production of 

proprietary data products. The potential 

sources of proprietary products are 

virtually limitless. 

Market data vendors provide another 

form of price discipline for proprietary 

data products because they control the 

primary means of access to end 

subscribers. Vendors impose price 

restraints based upon their business 

models. For example, vendors such as 

Bloomberg and Thomson Reuters that 

assess a surcharge on data they sell may 

refuse to offer proprietary products that 

end subscribers will not purchase in 

sufficient numbers. Internet portals, 

such as Google, impose a discipline by 

providing only data that will enable 

them to attract ‘‘eyeballs’’ that 

contribute to their advertising revenue. 

Retail broker-dealers, such as Schwab 

and Fidelity, offer their customers 

proprietary data only if it promotes 

trading and generates sufficient 

commission revenue. Although the 

business models may differ, these 

vendors’ pricing discipline is the same: 

they can simply refuse to purchase any 

proprietary data product that fails to 

provide sufficient value. The Exchange 

and other producers of proprietary data 

products must understand and respond 

to these varying business models and 

pricing disciplines in order to market 

proprietary data products successfully. 

In addition to the competition and 

price discipline described above, the 

market for proprietary data products is 

also highly contestable because market 

entry is rapid, inexpensive, and 

profitable. The history of electronic 

trading is replete with examples of 

entrants that swiftly grew into some of 

the largest electronic trading platforms 

and proprietary data producers: 

Archipelago, BATS Trading and Direct 

Edge. Regulation NMS, by deregulating 

the market for proprietary data, has 

increased the contestability of that 

market. While broker-dealers have 

previously published their proprietary 

data individually, Regulation NMS 

encourages market data vendors and 

broker-dealers to produce proprietary 

products cooperatively in a manner 

never before possible. Multiple market 

data vendors already have the capability 

to aggregate data and disseminate it on 

a profitable scale, including Bloomberg, 

and Thomson Reuters. 

The Court in NetCoalition concluded 

that the Commission had failed to 

demonstrate that the market for market 

data was competitive based on the 

reasoning of the Commission’s 

NetCoalition order because, in the 

Court’s view, the Commission had not 

adequately demonstrated that the 

proprietary data at issue in the case is 

used to attract order flow. The Exchange 

believes, however, that evidence not 

then before the court clearly 

demonstrates that availability of data 

attracts order flow. Due to competition 

among platforms, the Exchange intends 

to improve its platform data offerings on 

a continuing basis, and to respond 

promptly to customers’ data needs. 

The intensity of competition for 

proprietary information is significant 

and the Exchange believes that this 

proposal itself clearly evidences such 

competition. The Exchange has offered 

an AIS fee waiver to ToM subscribers 

since the inception of AIS. The 

Exchange now believes that it is 

appropriate to delete the fee waiver, 

based on a business determination of 

the number of ToM feed and AIS feed 

subscribers. It is entirely optional and is 

geared towards attracting new Member 

Applicants and customers. MIAX 

Options competitors continue to create 

new market data products and 


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19 15 U.S.C. 78s(b)(3)(A)(ii). 

20 17 CFR 240.19b–4(f)(2). 21 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(6)(iii). 

innovative pricing in this space. The 

Exchange expects firms to make 

decisions on how much and what types 

of data to consume on the basis of the 

total cost of interacting with MIAX 

Options or other exchanges. Of course, 

the explicit data fees are only one factor 

in a total platform analysis. Some 

competitors have lower transactions fees 

and higher data fees, and others are vice 

versa. The market for this proprietary 

information is highly competitive and 

continually evolves as products develop 

and change. Additionally, respecting 

intra-market competition, the AIS feed 

and the ToM feed are available to all 

subscribers, thus providing all 

subscribers to the data products with an 

even playing field with respect to 

information and access to trade on 

MIAX Options. 

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,19 and Rule 

19b–4(f)(2) 20 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. 

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 rule-comments@

sec.gov. Please include File Number SR– 

MIAX–2018–20 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–2018–20. 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–2018–20, and 

should be submitted on or before 

September 5, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–17494 Filed 8–14–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83809; File No. SR– 

CboeBZX–2018–057)] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend 

Exchange Rule 1.5, Definitions, 

Exchange Rule 14.6, Obligations for 

Companies Listed on the Exchange, 

and Exchange Rule 14.11, Other 

Securities 

August 9, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b-4 thereunder,2

notice is hereby given that on August 1, 

2018, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b-4(f)(6)(iii) 

thereunder,4 which renders it effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to 

amend Rule 1.5(c), which defines the 

After Hours Trading Session, to allow 

trading until 8:00 p.m. ET. 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, 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 


daltland on DSKBBV9HB2PROD with NOTICES