[Federal Register Volume 89, Number 37 (Friday, February 23, 2024)]
[Notices]
[Pages 13792-13794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03645]



[[Page 13792]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99555; File No. SR-EMERALD-2024-06]


Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Fee Schedule Regarding the Open-Close Report Data

February 16, 2024.
    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 February 5, 2024, MIAX Emerald, LLC (``MIAX 
Emerald'' 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 proposes to amend the MIAX Emerald Options Exchange 
Fee Schedule (the ``Fee Schedule'') regarding the Open-Close Report to 
allow subscribers who purchase Intra-Day Open Close data the ability to 
request End-of-Day Open-Close data for no additional charge.
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-options/miax-options/rule-filings, at the Exchange'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 offers a data product known as the Open-Close Report 
that is available for purchase by Exchange Members \3\ and non-Members. 
The Open-Close Report is described under Exchange Rule 531(d)(1). The 
data contained in the Open-Close Report is proprietary Exchange trade 
data and does not include trade data from any other exchange. It is 
also a historical data product and not a real-time data feed. The 
Exchange now proposes to amend fees for the Open-Close Report to allow 
subscribers who purchase Intra-Day Open Close data the ability to 
request End-of-Day Open-Close data for no additional charge.
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    \3\ The term ``Member'' means an individual or organization 
approved to exercise the trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
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    By way of background, the Exchange offers two versions of the Open-
Close Report, an end-of-day summary and intra-day report. The End-of-
Day version is a volume summary of trading activity on the Exchange at 
the option level by origin (Priority Customer,\4\ Non-Priority 
Customer, Firm, Broker-Dealer, and Market Maker \5\), side of the 
market (buy or sell), contract volume, and transaction type (opening or 
closing). The customer and professional customer volume is further 
broken down into trade size buckets (less than 100 contracts, 100-199 
contracts, greater than 199 contracts).
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    \4\ See Exchange Rule 100.
    \5\ Id.
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    The Intra-Day Open-Close Report provides similar information to 
that of the End-of-Day version but is produced and updated every 10 
minutes during the trading day. Data is captured in ``snapshots'' taken 
every 10 minutes throughout the trading day and is available to 
subscribers within five minutes of the conclusion of each 10-minute 
period. Each update represents the aggregate data captured from the 
current ``snapshot'' and all previous ``snapshots.'' The Intra-Day 
Open-Close data provides a volume summary of trading activity on the 
Exchange at the option level by origin (Priority Customer, Non-Priority 
Customer, Firm, Broker-Dealer, and Market Maker), side of the market 
(buy or sell), and transaction type (opening or closing). All volume is 
further broken down into trade size buckets (less than 100 contracts, 
100-199 contracts, greater than 199 contracts).
    The Exchange assesses a monthly fee of $600 per month for 
subscribing to the End-of-Day summary Open-Close Report and $2,000 per 
month for subscribing to the Intra-Day Open-Close Report. The Exchange 
also assesses a fee of $500 per request per month for ad-hoc requests 
for historical End-of-Day Open-Close data. An ad-hoc request for 
historical End-of-Day Open-Close data can be for any number of months 
beginning with June 2021 for which the data is available. The Exchange 
also assesses a fee of $1,000 per request per month for ad-hoc requests 
for historical Intra-Day Open-Close data. An ad-hoc request for 
historical Intra-Day Open-Close data can be for any number of months 
beginning with March 2019 for which the data is available.
    The Exchange now proposes to amend fees for the Open-Close Report 
to allow subscribers who purchase Intra-Day Open Close data the ability 
to request End-of-Day Open-Close data for no additional charge. This 
proposal is akin to a fee break for subscribers because it would 
decrease the cost to purchase a broader scope of Open-Close Report data 
from the Exchange by allowing Intra-Day subscribers to request End-of-
Day data for no additional charge. Specifically, the Exchange proposes 
to allow subscribers who purchase an Intra-Day monthly subscription to 
request an End-of-Day monthly subscription for no additional charge. 
Similarly, the Exchange proposes to also allow subscribers who purchase 
an Intra-Day Ad-hoc Request (historical data) to submit an End-of-Day 
Ad-hoc Request (historical data) for the same date or date range for no 
additional charge upon request. The Exchange proposes to codify these 
proposed changes under new footnotes a. and b. under Section 6 of its 
Fee Schedule.\6\
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    \6\ The Exchange also proposes to renumber existing footnotes 
``*'' as ``c.'' and ``**'' as ``d.'' to account for the new 
footnotes proposed herein. The Exchange does not proposes to amend 
the substance of these existing footnotes.
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    The Open-Close Report remains a completely voluntary product. The 
Exchange is not required by any rule or regulation to make this data 
available and potential subscribers may purchase it only if they 
voluntarily choose to do so. The Exchange notes that other exchanges 
offer a similar data product.\7\
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    \7\ See, e.g., Cboe Options Fees Schedule, Livevol Fees, Open-
Close Data; Nasdaq ISE, LLC (``ISE'') Options 7 Pricing Schedule, 
Section 10.A; Nasdaq PHLX, LLC (``PHLX'') Options 7 Pricing 
Schedule, Section 10, PHLX Options Trade Outline (``PHOTO''); Cboe 
EDGX Exchange, Inc. (``EDGX'') fee schedule available at http://markets.cboe.com/us/options/membership/fee_schedule/edgx/; and the 
Cboe BZX Exchange, Inc. (``BZX'') fee schedule available at http://markets.cboe.com/us/options/membership/fee_schedule/bzx/.

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[[Page 13793]]

Implementation Date
    The proposed changes are immediately effective.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\9\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and to protect investors and the public 
interest, and that it is not designed to permit unfair discrimination 
among customers, brokers, or dealers. The Exchange also believes that 
its proposed changes to its Fee Schedule concerning fees for the Open-
Close Report is consistent with Section 6(b) of the Act \10\ in 
general, and furthers the objectives of Section 6(b)(4) of the Act \11\ 
in particular, in that it is an equitable allocation of dues, fees and 
other charges among its members and other recipients of Exchange data.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations (``SROs'') 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. Particularly, the Open-Close Report further 
broadens the availability of U.S. option market data to investors 
consistent with the principles of Regulation NMS. The data product also 
promotes increased transparency through the dissemination of the Open-
Close Report. Particularly, information regarding opening and closing 
activity across different option series during the trading day may 
indicate investor sentiment, which may allow market participants to 
make better informed trading decisions throughout the day. Subscribers 
to the data may also be able to enhance their ability to analyze option 
trade and volume data and create and test trading models and analytical 
strategies. The Exchange believes the Open-Close Report provides a 
valuable tool that subscribers can use to gain comprehensive insight 
into the trading activity in a particular series, but also emphasizes 
such data is not necessary for trading and completely optional. 
Moreover, other exchanges offer a similar data product.\12\
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    \12\ See supra note 7.
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    The Exchange operates in a highly competitive environment. Indeed, 
there are currently 16 registered options exchanges that trade options. 
As of January 30, 2024, based on publicly available information, no 
single options exchange has more than approximately 14-15% of the 
equity options market share and currently the Exchange represents only 
approximately 3.59% of the equity options market share for the month of 
January 2024.\13\ The Commission has repeatedly expressed its 
preference for competition over regulatory intervention in determining 
prices, products, and services in the securities markets. Particularly, 
in Regulation NMS, the Commission highlighted the importance of market 
forces in determining prices and SRO revenues and, also, recognized 
that current regulation of the market system ``has been remarkably 
successful in promoting market competition in its broader forms that 
are most important to investors and listed companies.'' \14\ Making 
similar data products available to market participants fosters 
competition in the marketplace, and constrains the ability of exchanges 
to charge supra-competitive fees. In the event that a market 
participant views one exchange's data product as more or less 
attractive than the competition they can and do switch between similar 
products.
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    \13\ See the ``Market Share'' section of the Exchange's website, 
available at https://www.miaxglobal.com/.
    \14\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    The Exchange believes its proposal proposes to amend fees for the 
Open-Close Report to allow subscribers who purchase Intra-Day Open 
Close data the ability to request End-of-Day Open-Close data for no 
additional charge promotes just and equitable principles of trade 
because it enables subscribers to request additional Open-Close data 
for no additional charge. The End-of-Day version is a volume summary of 
trading activity on the Exchange, and essentially contains the same 
data as is provided in the final Intra-Day version at the end of the 
trading day and it is, therefore, reasonable and equitable to provide 
that data to Intra-Day subscribers for no additional charge. The 
Exchange believes the proposal is reasonable as the Exchange is simply 
making additional Open-Close data available for no additional charge, 
and fees for the Open-Close Report continue to be both modest and 
similar to, or even lower than, the fees assessed by other exchanges 
that provide similar data products.\15\ The Exchange is not aware that 
any other U.S. options exchange offers portions of their Open-Close 
Report data for no additional charge, including as proposed herein. 
Nonetheless, should it propose to assess fees in a different manner or 
at a significantly higher rate than established fees for similar data 
products of other exchanges would simply serve to reduce demand for the 
Exchange's data product, which as noted, is entirely optional. Like the 
Exchange's Open-Close Report, other exchanges offer similar data 
products that each provide insight into trading on those markets and 
may likewise aid in assessing investor sentiment. Although each of 
these similar Open-Close data products provide only proprietary trade 
data and not trade data from other exchanges, it is possible investors 
are still able to gauge overall investor sentiment across different 
option series based on open and closing interest on any one 
exchange.\16\ Similarly, market participants may be able to analyze 
option trade and volume data, and create and test trading models and 
analytical strategies using only Open-Close data relating to trading 
activity on one or more of the other markets that provide similar data 
products. As such, if a market participant views another exchange's 
Open-Close data as more attractive than its proposed Open-Close Report, 
then such market participant can merely choose not to purchase the 
Exchange's Open-Close Report and instead purchase another exchange's 
Open-Close data product, which offer similar data points, albeit based 
on that other market's trading activity.
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    \15\ See supra note 7.
    \16\ The exchange notes that its Open-Close Report data product 
does not include data on any exclusive, singly-listed option series.
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    Lastly, the Exchange believes the proposal is not unfairly 
discriminatory as it would apply equally to all users who choose to 
purchase or receive such data.

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. Rather, the 
Exchange believes that the proposal will promote competition by 
permitting the

[[Page 13794]]

Exchange to enhance the value of a data product that is similar to 
those offered by other competitor options exchanges.\17\ The Exchange 
proposes to allow subscribers who purchase Intra-Day Open Close data 
the ability to request End-of-Day Open-Close data for no additional 
charge to keep pace with evolving customer needs, and believes that 
providing such data to market participants that make requests for it 
will continue to contribute to robust competition among national 
securities exchanges. Multiple other U.S. options exchanges offer end-
of-day and intra-day Open-Close report data with fees that are 
substantially similar to the Exchange's fees. As a result, the Exchange 
believes this proposed rule change permits fair competition among 
national securities exchanges.
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    \17\ See supra note 7.
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    Furthermore, the Exchange operates in a highly competitive 
environment, and its ability to price Open-Close Report data is 
constrained by competition among exchanges that offer Open-Close report 
data to their customers. The Exchange notes that there are currently a 
number of similar products available to market participants and 
investors. Multiple other U.S. options exchanges offer Open-Close 
report data, which the Exchange must consider in its pricing discipline 
in order to compete for the market data.\18\ The Exchange notes that 
this proposal is akin to a fee break for subscribers because it would 
decrease the cost to purchase a broader scope of Open-Close Report data 
from the Exchange by allowing Intra-Day subscribers to request End-of-
Day data for no additional charge. Further, the Exchange is not aware 
that any other U.S. options exchange offers portions of their Open-
Close Report data for no additional charge, including as proposed 
herein. Nonetheless, should the Exchange propose fees that are 
excessively higher than established fees for Open-Close Report data 
would simply serve to reduce demand for the Exchange's data product, 
which as discussed, market participants are under no obligation to 
utilize. In this competitive environment, potential purchasers are free 
to choose which, if any, similar product to purchase to satisfy their 
need for market information. As a result, the Exchange believes this 
proposed rule change permits fair competition among national securities 
exchanges.
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    \18\ Id.
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    The Exchange also does not believe the proposal would cause any 
unnecessary or inappropriate burden on intermarket competition as other 
exchanges are free to introduce their own comparable data product and 
lower their prices for Open-Close Report data to better compete with 
the Exchange's offering. The Exchange does not believe the proposed 
rule change would cause any unnecessary or inappropriate burden on 
intramarket competition. Particularly, the proposal would apply 
uniformly to any market participant. The proposal allows any interested 
Member or non-Member to request Open-Close Report data based on their 
business needs.

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,\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.
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    \19\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \20\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

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

Electronic Comments

    <bullet> Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#2e5c5b424b034d4143434b405a5d6e5d4b4d00494158"><span class="__cf_email__" data-cfemail="1a686f767f37797577777f746e695a697f79347d756c">[email protected]</span></a>. Please include 
file number SR-EMERALD-2024-06 on the subject line.

Paper Comments

    <bullet> 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-EMERALD-2024-06. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-EMERALD-2024-06 and should 
be submitted on or before March 15, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-03645 Filed 2-22-24; 8:45 am]
BILLING CODE 8011-01-P


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