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[Federal Register Volume 89, Number 189 (Monday, September 30, 2024)]
[Notices]
[Pages 79672-79674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22263]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101148; File No. SR-SAPPHIRE-2024-28]

Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Fee Schedule

September 24, 2024.
    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 September 10, 2024, MIAX Sapphire, LLC (``MIAX Sapphire'' or 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
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 the MIAX Sapphire 
Options Exchange Fee Schedule (the ``Fee Schedule'') to amend Section 
5)f), Technical Support Request Fee.
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings, at MIAX Sapphire'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 79673]]

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 Section 5)f), Technical Support 
Request Fee, to now include in the fee to be assessed to Members \3\ 
and non-Members the cost of materials necessary for the Exchange's data 
center personnel to complete such technical support.
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    \3\ The term ``Member'' means an individual or organization that 
is registered with the Exchange pursuant to Chapter II of Exchange 
Rules for purposes of trading on the Exchange as an ``Electronic 
Exchange Member'' or ``Market Maker.'' Members are deemed 
``members'' under the Exchange Act. See the Definitions section of 
the Fee Schedule and Exchange Rule 100.
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Background
    The Exchange established the technical support request fee at the 
current hourly rate of $250 per hour in 2024 when the Exchange launched 
operations.\4\ The Exchange has an infrastructure comprised of low 
latency and ultra-low latency proximity solutions in several offsite 
data center locales offering universal access to all Exchange services 
via a single common connection across a variety of high speed network 
interfaces. The Exchange offers connectivity in and between its data 
center facilities and supports direct attachment of all network 
equipment or direct attached host systems of both Member and non-Member 
users of the Exchange.
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    \4\ See Securities Exchange Act Release No. 100750 (August 16, 
2024), 89 FR 68005 (August 22, 2024) (SR-SAPPHIRE-2024-16). See also 
Fee Schedule, Section 5)f).
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    Technical support refers to the use of Exchange engineers to 
perform on-site technical support tasks in the data centers for Members 
and non-Members, including the following support-related tasks: (1) 
power cycling of equipment; (2) patching and plugging in cabling and 
circuits; (3) observing, describing or reporting on display indicators; 
(4) configuration of hardware components instructed by the customer; 
(5) diagnosis and repairs as instructed by the customer; (6) swapping 
hardware components with Exchange-supplied or customer-supplied spares 
or upgrades; (7) troubleshooting heat related issues as instructed by 
customers; and (8) returning defective equipment to the manufacturer or 
customer.
Proposal
    The Exchange proposes to amend Section 5)f), Technical Support 
Request Fee, to now include in the fee to be assessed to Members and 
non-Members that request technical support the cost of materials 
necessary for the Exchange to complete such technical support in any of 
the Exchange's data centers. Some examples of materials for such 
technical support may include, but are not limited to, fiber optic 
cables, fiber spool, optical connectors (a device used to connect fiber 
optic cables), and patch cables.
    The Exchange does not propose to assess any amount in excess of the 
cost of any materials that are necessary for the Exchange's on-site 
engineers to complete the requested technical support. The Exchange 
simply proposes to pass through the costs of the materials, if 
necessary, to complete such technical support. At least one competing 
exchange group similarly passes through the cost of materials to their 
customers when performing similar types of services in their data 
centers.\5\
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    \5\ See Nasdaq PHLX LLC Rules, General 8 Connectivity, Section 
1(d) Additional Charges/Services (assessing $264 per hour for Power 
Consulting Service plus the cost of materials, if necessary); The 
Nasdaq Stock Market LLC Rules, General 8: Connectivity, Section 1(d) 
Additional Charges/Services (assessing $264 per hour for Power 
Consulting Service plus the cost of materials, if necessary); Nasdaq 
ISE, LLC Rules, General 8: Connectivity, Section 1(d) Additional 
Charges/Services (assessing $264 per hour for Power Consulting 
Service plus the cost of materials, if necessary).
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2. Statutory Basis
    The Exchange believes that the proposed fees are 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 provides for 
the equitable allocation of reasonable dues, fees and other charges 
among Members and other persons using any facility or system which the 
Exchange operates or controls. The Exchange also believes the proposed 
fees further the objectives of Section 6(b)(5) of the Act \8\ in that 
they are designed to promote just and equitable principles of trade, 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general protect investors 
and the public interest and are not designed to permit unfair 
discrimination between customers, issuers, brokers and dealers.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes it is reasonable to include in the cost of 
the technical support request fee the cost of any materials that are 
necessary for the Exchange's on-site engineers to complete the 
requested technical support because the Exchange will only pass through 
the actual costs it is charged by external vendors of such materials. 
The Exchange will not pass through any amount in excess of the cost of 
any materials that are necessary for the Exchange's on-site engineers 
to complete the requested technical support.
    The Exchange believes the proposal is equitable and not unfairly 
discriminatory because the Exchange will pass through the costs of 
materials for requested technical support in an equal manner to all 
Members and non-Members that request technical support in the data 
centers that requires the Exchange to purchase materials to complete 
such request. The cost for materials provided by the Exchange's 
external vendors supplying the materials will be passed through 
directly to the Member or non-Member requesting technical support.
    Furthermore, Members and non-Members are not required to use the 
technical support service. The Exchange offers this service as a 
convenience to all Members and non-Members. The Exchange believes the 
proposal is reasonable because it will permit both Members and non-
Members to request the use of the Exchange's on-site data center 
personnel as technical support and as a convenience in order to test or 
otherwise assess the user's connectivity to the Exchange via its data 
centers, while paying for the cost of any materials the Exchange is 
required to purchase to complete such requests.
    Additionally, at least one competing options exchange group passes 
through the cost of materials to their customers when performing 
similar types of services in their data centers.\9\ Accordingly, the 
Exchange believes the proposal is reasonable, equitable and not 
unfairly discriminatory.
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    \9\ See supra note 5.
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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 that is not necessary or appropriate 
in furtherance of the purposes of the Act.
Intra-Market Competition
    The Exchange believes the proposal to pass through the cost of any 
materials that are necessary for the Exchange's on-site engineers to 
complete the requested technical support will not result in any burden 
on intra-market competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the Exchange will only 
pass-through the actual costs it is charged by

[[Page 79674]]

third-party external vendors for such materials. At least one competing 
options exchange group similarly passes along charges assessed to those 
exchanges by third-party external vendors supplying materials on behalf 
of that exchange group's customers.\10\
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    \10\ See id.
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    Additionally, the pass through of costs for materials will be 
assessed equally to all Members and non-Members who request technical 
support that requires the Exchange to purchase materials to complete 
the requested support. The Exchange notes that Members and non-Members 
are not required to use the service. The Exchange offers this service 
as a convenience to all Members and non-Members. The Exchange believes 
the proposal will not impose any burden on intra-market competition 
because it will permit both Members and non-Members to request the use 
of the Exchange's on-site data center personnel as technical support 
and as a convenience in order to test or otherwise assess the user's 
connectivity to the Exchange via its data centers.
    HD3-Market Competition
    The Exchange believes that the proposed changes will not result in 
any burden on inter-market competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. As discussed 
above, market participants are not forced to connect to and trade on 
all exchanges. The Exchange believes that the proposed pass-through of 
costs for materials for technical support will not cause any burden on 
inter-market competition because none of these changes impact other 
exchanges' ability to compete.
    Accordingly, the Exchange does not believe its proposed fee changes 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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 \11\ and Rule 19b-4(f)(2) \12\ thereunder.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
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    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 change 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-SAPPHIRE-2024-28 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-SAPPHIRE-2024-28. 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-SAPPHIRE-2024-28 and should 
be submitted on or before October 21, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-22263 Filed 9-27-24; 8:45 am]
BILLING CODE 8011-01-P
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