[Federal Register Volume 89, Number 200 (Wednesday, October 16, 2024)]
[Notices]
[Pages 83529-83535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23802]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101289; File No. SR-MIAX-2024-39]


Self-Regulatory Organizations; Miami International Securities 
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Its Fee Schedule and Extend the SPIKES 
Options Market Maker Incentive Program

October 9, 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 September 27, 2024, 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 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 Fee Schedule 
(``Fee Schedule'') to (i) amend and extend the SPIKES options Market 
Maker Incentive Program (the ``Incentive Program'') until January 31, 
2025; and (ii) remove waivers for certain non-transaction fees 
applicable to Market Makers \3\ that trade solely in Proprietary 
Products.\4\
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    \3\ The term ``Market Makers'' refers to ``Lead Market Makers'', 
``Primary Lead Market Makers'' and ``Registered Market Makers'' 
collectively. See Exchange Rule 100.
    \4\ The term ``Proprietary Product'' means a class of options 
that is listed exclusively on the Exchange. See Exchange Rule 100.
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    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'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

[[Page 83530]]

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 the Fee Schedule to (i) amend and 
extend the SPIKES options Market Maker Incentive Program (the 
``Incentive Program'') until January 31, 2025; and (ii) remove waivers 
for certain non-transaction fees applicable to Market Makers that trade 
solely in Proprietary Products.
Background
    On October 12, 2018, the Exchange received approval from the U.S. 
Securities and Exchange Commission (``Commission'') to list and trade 
on the Exchange options on the SPIKES[supreg] Index, a new index that 
measures expected 30-day volatility of the SPDR S&P 500 ETF Trust 
(commonly known and referred to by its ticker symbol, ``SPY'').\5\ The 
Exchange adopted its initial SPIKES options transaction fees on 
February 15, 2019 and adopted a new section of the Fee Schedule for 
those fees.\6\ Options on the SPIKES Index began trading on the 
Exchange on February 19, 2019.
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    \5\ See Securities Exchange Act Release No. 84417 (October 12, 
2018), 83 FR 52865 (October 18, 2018) (SR-MIAX-2018-14) (Order 
Granting Approval of a Proposed Rule Change by Miami International 
Securities Exchange, LLC to List and Trade on the Exchange Options 
on the SPIKES[supreg] Index).
    \6\ See Securities Exchange Release No. 85283 (March 11, 2019), 
84 FR 9567 (March 15, 2019) (SR-MIAX-2019-11). The Exchange 
initially filed the proposal on February 15, 2019 (SR-MIAX-2019-04). 
That filing was withdrawn and replaced with SR-MIAX-2019-11. On 
September 30, 2020, the Exchange filed its proposal to, among other 
things, reorganize the Fee Schedule to adopt new Section (1)(b), 
Proprietary Products Exchange Fees, and moved the fees and rebates 
for SPIKES options into new Section (1)(b)(i). See Securities 
Exchange Act Release Nos. 90146 (October 9, 2020), 85 FR 65443 
(October 15, 2020) (SR-MIAX-2020-32); 90814 (December 29, 2020), 86 
FR 327 (January 5, 2021) (SR-MIAX-2020-39).
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    On May 31, 2019, the Exchange filed its first proposal in a series 
of proposals with the Commission to amend the Fee Schedule to waive 
certain non-transaction fees applicable to Market Makers that trade 
solely in Proprietary Products (including options on the SPIKES Index) 
beginning June 1, 2019, through September 30, 2024.\7\ In particular, 
the Exchange adopted fee waivers for Membership Application fees, 
monthly Market Maker Trading Permit fees, Application Programming 
Interface (``API'') Testing and Certification fees for Members,\8\ and 
monthly MIAX Express Interface (``MEI'') Port \9\ fees assessed to 
Market Makers that trade solely in Proprietary Products (including 
options on SPIKES) throughout the entire period of June 1, 2019 through 
September 30, 2024.
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    \7\ See Securities Exchange Act Release Nos. 86109 (June 14, 
2019), 84 FR 28860 (June 20, 2019) (SR-MIAX-2019-28); 87282 (October 
10, 2019), 84 FR 55658 (October 17, 2019) (SR-MIAX-2019-43); 87897 
(January 6, 2020), 85 FR 1346 (January 10, 2020) (SR-MIAX-2019-53); 
89289 (July 10, 2020), 85 FR 43279 (July 16, 2020) (SR-MIAX-2020-
22); 90146 (October 9, 2020), 85 FR 65443 (October 15, 2020) (SR-
MIAX-2020-32); 90814 (December 29, 2020), 86 FR 327 (January 5, 
2021) (SR-MIAX-2020-39); 91498 (April 7, 2021), 86 FR 19293 (April 
13, 2021) (SR-MIAX-2021-06); 93881 (December 30, 2021), 87 FR 517 
(January 5, 2022) (SR-MIAX-2021-63); 95259 (July 12, 2022), 87 FR 
42754 (July 17, 2022) (SR-MIAX-2022-24); 96007 (October 7, 2022), 87 
FR 62151 (October 13, 2022) (SR-MIAX-2022-32); 96588 (December 28, 
2022), 88 FR 381 (January 4, 2023) (SR-MIAX-2022-47); 97887 (July 
12, 2023), 88 FR 45936 (July 18, 2023) (SR-MIAX-2023-28); 99047 
(November 30, 2023), 88 FR 84861 (December 6, 2023) (SR-MIAX-2023-
46); and 100468 (July 9, 2024), 89 FR 57445 (July 15, 2024) (SR-
MIAX-2024-26).
    \8\ 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.
    \9\ Full Service MEI Ports provide Market Makers with the 
ability to send Market Maker simple and complex quotes, eQuotes, and 
quote purge messages to the MIAX System. Full Service MEI Ports are 
also capable of receiving administrative information. Market Makers 
are limited to two Full Service MEI Ports per matching engine. See 
Fee Schedule, Section 5)d)ii), footnote 28.
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    On September 30, 2021, the Exchange filed its initial proposal (SR-
MIAX-2021-45) to implement the Incentive Program for SPIKES options to 
incentivize Market Makers to improve liquidity, available volume, and 
the quote spread width of SPIKES options beginning October 1, 2021, and 
ending December 31, 2021.\10\ Technical details regarding the Incentive 
Program were published in a Regulatory Circular on September 30, 
2021.\11\ On October 12, 2021, the Exchange withdrew SR-MIAX-2021-45 
and refiled its proposal to implement the Incentive Program to provide 
additional details.\12\ In that filing, the Exchange specifically noted 
that the Incentive Program would expire at the end of the period 
(December 31, 2021) unless the Exchange filed another 19b-4 Filing to 
amend the fees (or extend the Incentive Program).\13\
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    \10\ See SR-MIAX-2021-45.
    \11\ See MIAX Options Regulatory Circular 2021-56, SPIKES 
Options Market Maker Incentive Program (September 30, 2021) 
available at https://www.miaxglobal.com/sites/default/files/circular-files/MIAX_Options_RC_2021_56.pdf.
    \12\ See Securities Exchange Act Release No. 93424 (October 26, 
2021), 86 FR 60322 (November 1, 2021) (SR-MIAX-2021-49).
    \13\ See id.
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    Between December 23, 2021, and June 28, 2024, the Exchange filed 
several proposals to extend the Incentive Program, with the last 
extension period ending September 30, 2024.\14\ In each of those 
filings, the Exchange specifically noted that the Incentive Program 
would expire at the end of the then-current period unless the Exchange 
filed another 19b-4 Filing to amend the fees (or extend the Incentive 
Program).\15\
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    \14\ See Securities Exchange Act Release Nos. 93881 (December 
30, 2021), 87 FR 517 (January 5, 2022) (SR-MIAX-2021-63); 94574 
(April 1, 2022), 87 FR 20492 (April 7, 2022) (SR-MIAX-2022-12); 
95259 (July 12, 2022), 87 FR 42754 (July 17, 2022) (SR-MIAX-2022-
24); 96007 (October 7, 2022), 87 FR 62151 (October 13, 2022) (SR-
MIAX-2022-32); 96588 (December 28, 2022), 88 FR 381 (January 4, 
2023) (SR-MIAX-2022-47); 97239 (April 3, 2023), 88 FR 20930 (April 
7, 2023) (SR-MIAX-2023-13); 97883 (July 12, 2023), 88 FR 45941 (July 
18, 2023) (SR-MIAX-2023-26); 99040 (November 29, 2023), 88 FR 84374 
(December 5, 2023) (SR-MIAX-2023-47); 99902 (April 3, 2024), 89 FR 
24883 (April 9, 2024) (SR-MIAX-2024-17); and 100468 (July 9, 2024), 
89 FR 57445 (July 15, 2024) (SR-MIAX-2024-26).
    \15\ See id.
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Proposal To Amend and Extend the Incentive Program
    The Exchange now proposes to amend and extend the Incentive Program 
for SPIKES options to continue to incentivize Market Makers to improve 
liquidity and available volume in SPIKES options by amending the quotes 
spread width requirements and the amounts of the incentive compensation 
pools.
    Currently, to be eligible to participate in the Incentive Program, 
a Market Maker must meet certain minimum requirements related to quote 
spread width in certain in-the-money (ITM) and out-of-the-money (OTM) 
options as determined by the Exchange and communicated to Members via 
Regulatory Circular.\16\ The Exchange has devised a methodology where 
each qualifying Market Maker's ITM/OTM market width for eligible 
Incentive Program options is calculated. Eligible ITM options require a 
maximum quote spread width of 150 basis points (``bps'') and each 
eligible OTM option requires a maximum quote spread width of 100 
bps.\17\ Market Makers must also satisfy a minimum time in the market 
in the front 2 expiry months of 70%, and have an average quote size of 
25 contracts. The Exchange established two separate incentive 
compensation pools that are used to compensate Market Makers that

[[Page 83531]]

satisfy and/or exceed the criteria pursuant to the Incentive Program.
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    \16\ See supra note 11.
    \17\ Calculation of bps is described in Regulatory Circular 
2021-56. See supra note 11.
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    The Exchange now proposes to double the maximum quote spread width 
parameters for both ITM options and OTM options. Specifically, the 
Exchange proposes to increase the maximum quote spread width from 150 
bps to 300 bps for a Market Maker quoting ITM options to be eligible to 
participate in the Incentive Program. The Exchange also proposes to 
increase the maximum quote spread width from 100 bps to 200 bps for a 
Market Maker quoting OTM options to be eligible to participate in the 
Incentive Program. The Exchange will communicate the new requirements 
of the Incentive Program to Members via Regulatory Circular.\18\
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    \18\ See MIAX Options Exchange Regulatory Circular 2024-54, 
Updated SPIKES Options Market Maker Incentive Program (September 26, 
2024), available at https://www.miaxglobal.com/markets/us-options/miax-options/regulatory-circulars.
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    Currently, the first pool (Incentive 1) is capped at $40,000 per 
month, which is allocated to Market Makers that meet the minimum 
requirements of the Incentive Program. Market Makers are required to 
meet minimum spread width requirements in a select number of ITM and 
OTM SPIKES option contracts as determined by the Exchange and 
communicated to Members via Regulatory Circular.\19\ A complete 
description of how the Exchange calculates the minimum spread width 
requirements in ITM and OTM SPIKES options can be found in the 
published Regulatory Circular.\20\ Market Makers are also required to 
maintain the minimum spread width, described above, for at least 70% of 
the time in the front two (2) SPIKES options contract expiry months and 
maintain an average quote size of at least 25 contracts.\21\ The amount 
available to each individual Market Maker is capped at $10,000 per 
month for satisfying the minimum requirements of the Incentive Program. 
In the event that more than four Market Makers meet the requirements of 
the Incentive Program, each qualifying Market Maker is entitled to 
receive a pro-rated share of the $40,000 monthly compensation pool 
dependent upon the number of qualifying Market Makers in that 
particular month.
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    \19\ See supra note 11.
    \20\ See id.
    \21\ In the event there is only one monthly expiration listed, 
the requirements are only applicable to that single month.
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    The Exchange now proposes to amend the terms of Incentive 1. 
Specifically, the Exchange proposes to reduce the total compensation 
pool of Incentive 1 from $40,000 per month to $10,000 per month. The 
Exchange also proposes to reduce the maximum amount available to each 
individual Market Maker for satisfying the minimum requirements of the 
Incentive Program from $10,000 per month to $5,000 per month. The 
Exchange proposes that, in the event that more than two Market Makers 
meet the requirements of Incentive 1, each qualifying Market Maker is 
entitled to receive a pro-rated share of the $10,000 monthly 
compensation pool dependent upon the number of qualifying Market Makers 
in that particular month.
    Currently, the second pool (Incentive 2) is capped at a total 
amount of $100,000 per month which is used during the Incentive Program 
to further incentivize Market Makers who meet or exceed the 
requirements of Incentive 1 (``qualifying Market Makers'') to provide 
tighter quote width spreads with the total compensation pool amount 
based on qualifying Market Makers' improvement value over the minimum 
requirement score. The Exchange ranks each qualifying Market Maker's 
quote width spread relative to each other qualifying Market Maker's 
quote width spread. Market Makers with tighter spreads in certain 
strikes, as determined by the Exchange and communicated to Members via 
Regulatory Circular,\22\ are eligible to receive a pro-rated share of 
the compensation pool not to exceed $25,000 per Member per month. 
Qualifying Market Makers are ranked relative to each other based on the 
quality of their spread width (i.e., tighter spreads are ranked higher 
than wider spreads) and the Market Maker with the best quality spread 
width receives the highest rebate, while other eligible qualifying 
Market Makers receive a rebate relative to their quality spread width.
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    \22\ See supra note 11.
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    The Exchange now proposes to amend the terms of Incentive 2. 
Specifically, the Exchange proposes to reduce the total compensation 
pool of Incentive 2 from a maximum of $100,000 per month to a maximum 
of $25,000 per month. The Exchange also proposes to reduce the maximum 
amount available to each individual Market Maker for satisfying the 
requirements of Incentive 2 from $25,000 per month to $12,500 per 
month.
    The purpose of the proposed changes is for business reasons. The 
Exchange proposes to lower the quoting requirements because the 
Exchange is no longer listing new expiration months in SPIKES options. 
The Exchange anticipates that there will be no expiration months 
available for trading following the expiration of the January 2025 
SPIKES options. The Exchange believes that it is appropriate to lower 
the threshold of the quoting standards for the Incentive Program to 
further encourage more SPIKES Market Makers to participate in the 
Incentive Program. The Exchange also proposes to reduce the 
compensation pools and the maximum amount available to each individual 
Market Maker for satisfying and/or exceeding the minimum requirements 
of the Incentive Program because the Exchange proposes to lower the 
quoting requirements for the Incentive Program.
    In addition, the Exchange proposes to extend the Incentive Program 
until January 31, 2025. The purpose of this extension is to continue to 
incentivize Market Makers to provide quotes in SPIKES options and to 
improve liquidity and available volume.
    The Exchange will announce the amendment and extension of the 
Incentive Program to all Members via a Regulatory Circular.\23\
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    \23\ See supra note 18. The Exchange notes that at the end of 
the extension period, the Incentive Program will expire unless the 
Exchange files another 19b-4 Filing to amend the terms or extend the 
Incentive Program.
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Proposal To Remove the Fee Waivers for Market Markets That Trade Solely 
in Proprietary Products (Including SPIKES Options)
    Currently, the Exchange offers fee waivers for (i) Membership 
Application fees, (ii) monthly Market Maker Trading Permit fees, (iii) 
Member API Testing and Certification fees, and (iv) monthly MEI Port 
fees, to Market Makers that trade solely in Proprietary Products 
(including options on SPIKES). The fee waivers for the aforementioned 
fees will end on September 30, 2024. The Exchange now proposes to 
remove the aforementioned fee waivers from the Fee Schedule once they 
expire on September 30, 2024.
Membership Application Fees
    The Exchange currently assesses a one-time Membership Application 
fee for applications of potential Members. The Exchange assesses a one-
time Membership Application fee on the earlier of (i) the date the 
applicant is certified in the membership system, or (ii) once an 
application for MIAX membership is finally denied. The one-time 
application fee is based upon the

[[Page 83532]]

applicant's status as either a Market Maker or an Electronic Exchange 
Member (``EEM'').\24\ A Market Maker is assessed a one-time Membership 
Application fee of $3,000. However, the Exchange currently offers a 
waiver of the Membership Application fee for Market Makers that will 
trade solely in Proprietary Products. This waiver is set to expire on 
September 30, 2024.
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    \24\ The term ``Electronic Exchange Member'' or ``EEM'' means 
the holder of a Trading Permit who is not a Market Maker. Electronic 
Exchange Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
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    The Exchange now proposes to remove the waiver for the one-time 
Membership Application fee of $3,000 for Market Makers that trade 
solely in Proprietary Products (including options on SPIKES) once it 
expires on September 30, 2024. The Exchange notes that the only 
Proprietary Product offered by the Exchange is SPIKES options. The 
Exchange initially waived the Membership Application fee for Market 
Makers that trade solely in Proprietary Products in order to attract 
new market participants to trade SPIKES options. Since the Exchange is 
no longer listing new expiration months in SPIKES options, and the 
Exchange anticipates that there will be no expiration months available 
for trading following the expiration of the January 2025 SPIKES 
options, the Exchange will no longer waive the Membership Application 
fee to attract market participants to trade SPIKES options.
Trading Permit Fees
    The Exchange issues Trading Permits that confer the ability to 
transact on the Exchange. MIAX Trading Permits are issued to Market 
Makers and EEMs. Members receiving Trading Permits during a particular 
calendar month are assessed monthly Trading Permit fees as set forth in 
the Fee Schedule. As it relates to Market Makers, the Exchange 
currently assesses a monthly Trading Permit fee in any month the Market 
Maker is certified in the membership system, is credentialed to use one 
or more MIAX MEI Ports in the production environment and is assigned to 
quote in one or more classes. The Exchange assesses the monthly Market 
Maker Trading Permit fee for its Market Makers based on the greatest 
number of classes listed on the Exchange that the Market Maker was 
assigned to quote in on any given day within a calendar month and the 
applicable fee rate is the lesser of either the per class basis or 
percentage of total national average daily volume measurements. A 
Market Maker is assessed a monthly Trading Permit fee according to the 
following table: \25\
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    \25\ See Fee Schedule, Section (3)(b).

----------------------------------------------------------------------------------------------------------------
                                                         Market Maker assignments (the lesser of the applicable
                                         Monthly MIAX                  measurements below) [Omega]
        Type of trading permit          trading permit ---------------------------------------------------------
                                              fee                                   % of national average daily
                                                                Per class                      volume
----------------------------------------------------------------------------------------------------------------
Market Maker (includes RMM, LMM, PLMM)       $7,000.00  Up to 10 Classes.........  Up to 20% of Classes by
                                                                                    volume.
                                             12,000.00  Up to 40 Classes.........  Up to 35% of Classes by
                                                                                    volume.
                                           * 17,000.00  Up to 100 Classes........  Up to 50% of Classes by
                                                                                    volume.
                                           * 22,000.00  Over 100 Classes.........  Over 50% of Classes by volume
                                                                                    up to all Classes listed on
                                                                                    MIAX.
----------------------------------------------------------------------------------------------------------------
[Omega] Excludes Proprietary Products.
* For these Monthly MIAX Trading Permit Fee levels, if the Market Maker's total monthly executed volume during
  the relevant month is less than 0.060% of the total monthly executed volume reported by OCC in the market
  maker account type for MIAX-listed option classes for that month, then the fee will be $15,500 instead of the
  fee otherwise applicable to such level.

    However, the Exchange currently offers a waiver of the Trading 
Permit fee for Market Makers that will trade solely in Proprietary 
Products. This waiver is set to expire on September 30, 2024.
    The Exchange now proposes to remove the waiver for the monthly 
Trading Permit fee for Market Makers that trade solely in Proprietary 
Products (including options on SPIKES) once it expires on September 30, 
2024. The Exchange notes that the only Proprietary Products offered by 
the Exchange is SPIKES options. The Exchange initially waived the 
monthly Trading Permit fee for Market Makers that trade solely in 
Proprietary Products in order to attract new market participants to 
trade SPIKES options. Since the Exchange is no longer listing new 
expiration months in SPIKES options, and the Exchange anticipates that 
there will be no expiration months available for trading following the 
expiration of the January 2025 SPIKES options, the Exchange will no 
longer waive the monthly Trading Permit fee to attract market 
participants to trade SPIKES options. The Exchange also notes that 
there are no Market Makers trading solely in SPIKES options, thus the 
Exchange believes that removing the waiver for the monthly Trading 
Permit fee for Market Makers that trade solely in Proprietary Products 
(including options on SPIKES) would have no impact on Members or the 
public.
API Testing and Certification Fees
    The Exchange assesses an API Testing and Certification fee to all 
Members depending upon Membership type. An API makes it possible for 
Members' software to communicate with MIAX software applications, and 
is subject to Members testing with, and certification by, MIAX. The 
Exchange offers four types of interfaces: (i) the Financial Information 
Exchange Port (``FIX Port''),\26\ which enables the FIX Port user 
(typically an EEM or a Market Maker) to submit simple and complex 
orders electronically to MIAX; (ii) the MEI Port, which enables Market 
Makers to submit simple and complex electronic quotes to MIAX; (iii) 
the Clearing Trade Drop Port (``CTD Port''),\27\ which provides real-
time trade clearing information to the participants to a trade on MIAX 
and to the participants' respective clearing firms;

[[Page 83533]]

and (iv) the FIX Drop Copy Port (``FXD Port''),\28\ which provides a 
copy of real-time trade execution, correction and cancellation 
information through a FIX Port to any number of FIX Ports designated by 
an EEM to receive such messages.
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    \26\ A FIX Port is an interface with MIAX systems that enables 
the Port user (typically an Electronic Exchange Member or a Market 
Maker) to submit simple and complex orders electronically to MIAX. 
See Fee Schedule, Section 5)d)i).
    \27\ Clearing Trade Drop (``CTD'') provides Exchange members 
with real-time clearing trade updates. The updates include the 
Member's clearing trade messages on a low latency, real-time basis. 
The trade messages are routed to a Member's connection containing 
certain information. The information includes, among other things, 
the following: (i) trade date and time; (ii) symbol information; 
(iii) trade price/size information; (iv) Member type (for example, 
and without limitation, Market Maker, Electronic Exchange Member, 
Broker-Dealer); (v) Exchange Member Participant Identifier 
(``MPID'') for each side of the transaction, including Clearing 
Member MPID; and (vi) strategy specific information for complex 
transactions. CTD Port Fees will be assessed in any month the Member 
is credentialed to use the CTD Port in the production environment. 
See Fee Schedule, Section 5)d)iii.
    \28\ The FIX Drop Copy Port (``FXD'') is a messaging interface 
that will provide a copy of real-time trade execution, trade 
correction and trade cancellation information for simple and complex 
orders to FIX Drop Copy Port users who subscribe to the service. FIX 
Drop Copy Port users are those users who are designated by an EEM to 
receive the information and the information is restricted for use by 
the EEM only. FXD Port Fees will be assessed in any month the Member 
is credentialed to use the FXD Port in the production environment. 
See Fee Schedule, Section 5)d)iv).
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    API Testing and Certification fees for Market Makers are assessed 
(i) initially per API for CTD and MEI ports in the month the Market 
Maker has been credentialed to use one or more ports in the production 
environment for the tested API and the Market Maker has been assigned 
to quote in one or more classes, and (ii) each time a Market Maker 
initiates a change to its system that requires testing and 
certification. API Testing and Certification fees will not be assessed 
in situations where the Exchange initiates a mandatory change to the 
Exchange's system that requires testing and certification. The Exchange 
currently assesses a Market Maker an API Testing and Certification fee 
of $2,500. The API Testing and Certification fees represent costs 
incurred by the Exchange as it works with each Member for testing and 
certifying that the Member's software systems communicate properly with 
the Exchange's interfaces. However, the Exchange currently offers a 
waiver of the API Testing and Certification Fee for Market Makers that 
will trade solely in Proprietary Products. This waiver is set to expire 
on September 30, 2024.
    The Exchange now proposes to remove the waiver of the API Testing 
and Certification fee for Market Makers that trade solely in 
Proprietary Products (including options on SPIKES) from the Fee 
Schedule once it expires on September 30, 2024. The Exchange notes that 
the only Proprietary Products offered by the Exchange is SPIKES 
options. The Exchange initially waived the API Testing and 
Certification fee for Market Makers that trade solely in Proprietary 
Products in order to attract new market participants to trade SPIKES 
options. Since the Exchange is no longer listing new expiration months 
in SPIKES options, and the Exchange anticipates that there will be no 
expiration months available for trading following the expiration of the 
January 2025 SPIKES options, the Exchange will no longer waive the API 
Testing and Certification fee to attract market participants to trade 
SPIKES options. The Exchange also notes that there is no Market Makers 
trading solely in SPIKES options, thus the Exchange believes that 
removing the waiver for the API Testing and Certification fee for 
Market Makers that trade solely in Proprietary Products (including 
options on SPIKES) would have no impact on Members or the public.
MEI Port Fees
    The Exchange assesses monthly MEI Port fees to Market Makers in 
each month the Member has been credentialed to use the MEI Port in the 
production environment and has been assigned to quote in at least one 
class. The amount of the monthly MEI Port fee is based upon the number 
of classes in which the Market Maker was assigned to quote on any given 
day within the calendar month, and upon the class volume percentages 
set forth in the Fee Schedule. The class volume percentage is based on 
the total national average daily volume in classes listed on the 
Exchange in the prior calendar quarter. Newly listed option classes are 
excluded from the calculation of the monthly MEI Port fee until the 
calendar quarter following their listing, at which time the newly 
listed option classes will be included in both the per class count and 
the percentage of total national average daily volume. The Exchange 
assesses Market Makers the monthly MEI Port fee based on the greatest 
number of classes listed on the Exchange that the Market Maker was 
assigned to quote in on any given day within a calendar month and the 
applicable fee rate that is the lesser of either the per class basis or 
percentage of total national average daily volume measurement. The 
Exchange assesses MEI Port fees on Market Makers according to the 
following table: \29\ However, the Exchange currently offers a waiver 
of the MEI Port Fee for Market Makers that trade solely in Proprietary 
Products. This waiver is set to expire on September 30, 2024.
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    \29\ See Fee Schedule 5)d)ii).

------------------------------------------------------------------------
                                 Market maker assignments (the lesser of
                                   the applicable measurements below)
                                                 [Omega]
     Monthly MIAX MEI fees     -----------------------------------------
                                                   % of national average
                                    Per class           daily volume
------------------------------------------------------------------------
$5,000.00.....................  Up to 5 Classes..  Up to 10% of Classes
                                                    by volume.
10,000.00.....................  Up to 10 Classes.  Up to 20% of Classes
                                                    by volume.
14,000.00.....................  Up to 40 Classes.  Up to 35% of Classes
                                                    by volume.
17,500.00 *...................  Up to 100 Classes  Up to 50% of Classes
                                                    by volume.
20,500.00 *...................  Over 100 Classes.  Over 50% of Classes
                                                    by volume up to all
                                                    Classes listed on
                                                    MIAX.
------------------------------------------------------------------------
[Omega] Excludes Proprietary Products.
* For these Monthly MIAX MEI Fees levels, if the Market Maker's total
  monthly executed volume during the relevant month is less than 0.060%
  of the total monthly executed volume reported by OCC in the market
  maker account type for MIAX-listed option classes for that month, then
  the fee will be $14,500 instead of the fee otherwise applicable to
  such level.

    The Exchange now proposes to remove the waiver of the monthly MEI 
Port fee for Market Makers that trade solely in Proprietary Products 
(including options on SPIKES) once it expires on September 30, 2024. 
The Exchange notes that the only Proprietary Product offered by the 
Exchange is SPIKES options. The Exchange initially waived the monthly 
MEI Port fee for Market Makers that trade solely in Proprietary 
Products in order to attract new market participants to trade SPIKES 
options. Since the Exchange is no longer listing new expiration months 
in SPIKES options, and the Exchange anticipates that there will be no 
expiration months available for trading following the expiration of the 
January 2025 SPIKES options, the Exchange will no longer waive the 
monthly MEI Port fee to attract market participants to trade SPIKES 
options. The Exchange also notes that there is no Market Makers trading 
solely in SPIKES options, thus the Exchange believes that removing the 
waiver for the monthly MEI Port fee for

[[Page 83534]]

Market Makers that trade solely in Proprietary Products (including 
options on SPIKES) would have no impact on Members or the public.
Implementation
    The proposed fee changes are effective beginning October 1, 2024.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \30\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \31\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among its Members and issuers and other persons using 
its facilities. The Exchange also believes the proposal furthers the 
objectives of Section 6(b)(5) of the Act in that it is designed 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, in general to protect investors and the public 
interest and is not designed to permit unfair discrimination between 
customers, issuers, brokers and dealers.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78f(b).
    \31\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable, equitable, and not 
unfairly discriminatory to modify the Incentive Program for Market 
Makers in SPIKES options. The amendment to the Incentive Program is 
reasonably designed because the Exchange is no longer listing new 
expiration months in SPIKES options. The Exchange anticipates that 
there will be no expiration months available for trading following the 
expiration of the January 2025 SPIKES options. Lowering the quoting 
requirements for the Incentive Program would encourage more Market 
Makers to participate in the Incentive Program. Given that the Exchange 
proposes to lower the threshold of the quoting standards for the 
Incentive Program, accordingly the Exchange proposes to reduce the 
compensation pools and the maximum amount available to each individual 
Market Maker for satisfying and/or exceeding the minimum requirements 
of the Incentive Program. The Incentive Program is equitably allocated 
and not unfairly discriminatory because the amendment to the Incentive 
Program applies to all SPIKES Market Makers. Additionally, if a SPIKES 
Market Maker does not satisfy the requirements of Incentive 1 or 2, 
then that Market Maker simply will not receive the rebate offered by 
the Incentive Program for that month.
    The Exchange believes that it is reasonable, equitable and not 
unfairly discriminatory to extend the Incentive Program for Market 
Makers in SPIKES options until January 31, 2025. It will continue to 
benefit all market participants trading in SPIKES options. SPIKES 
options is a Proprietary Product on the Exchange and the continuation 
of the Incentive Program encourages SPIKES Market Makers to satisfy a 
heightened quoting standard, average quote size, and time in market. A 
continued increase in quoting activity and tight quotes may yield a 
corresponding increase in order flow from other market participants, 
which benefits all investors by deepening the Exchange's liquidity 
pool, potentially providing greater execution incentives and 
opportunities, while promoting market transparency and improving 
investor protection.
    The Exchange believes that the Incentive Program is equitable and 
not unfairly discriminatory because it will continue to promote SPIKES 
options liquidity, which may increase trading opportunities to the 
benefit of all market participants. The Exchange believes it is 
reasonable to operate the Incentive Program for a continued limited 
period of time to strengthen market quality for all market 
participants. The resulting increased volume and liquidity will benefit 
those Members who are eligible to participate in the Incentive Program 
and will also continue to benefit those Members who are not eligible to 
participate in the Incentive Program by providing more trading 
opportunities and tighter spreads.
    Additionally, the Exchange believes that the proposal to remove the 
fee waivers for certain non-transaction fees for Market Makers that 
trade solely in Proprietary Products is reasonable. The Exchange 
initially waived certain non-transaction fees for Market Makers that 
trade solely in Proprietary Products in order to attract new market 
participants to trade SPIKES options. Since the Exchange is no longer 
listing new expiration months in SPIKES options, and the Exchange 
anticipates that there will be no expiration months available for 
trading following the expiration of the January 2025 SPIKES options, 
the Exchange will no longer waive these non-transaction fees to attract 
market participants to trade SPIKES options. The Exchange also notes 
that there is no Market Makers trading solely in SPIKES options, thus 
the Exchange believes that removing the fee waivers for certain non-
transaction fees for Market Makers that trade solely in Proprietary 
Products (including options on SPIKES) would have no impact on Members 
or the public. The Exchange believes the proposed removal of the fee 
waivers is fair and equitable and not unreasonably discriminatory 
because it applies to all current and future market participants on the 
Exchange.

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.
Intra-Market Competition
    The Exchange believes that the proposed modification and extension 
of the Incentive Program to January 31, 2025, would continue to 
increase intra-market competition by incentivizing Market Makers to 
quote SPIKES options, which will continue to enhance the quality of 
quoting and increase the volume of contracts available to trade in 
SPIKES options. To the extent that this purpose is achieved, all the 
Exchange's market participants should benefit from the improved market 
liquidity for SPIKES options. Enhanced market quality and increased 
transaction volume in SPIKES options that results from the anticipated 
increase in Market Maker activity on the Exchange will benefit all 
market participants and improve competition on the Exchange.
    Additionally, the Exchange believes that the proposal to remove 
certain of the non-transaction fee waivers for Market Makers that trade 
solely in Proprietary Products would have no impact on intra-market 
competition because it applies to all new potential Market Makers to 
quote in Proprietary Products. The Exchange also notes that there are 
no Market Makers trading solely in SPIKES options, thus the Exchange 
believes that removing the waiver for the monthly MEI Port fee for 
Market Makers that trade solely in Proprietary Products (including 
options on SPIKES) would have no impact on intra-market competition.
    The Exchange does not believe that the proposed rule changes will 
impose any burden on intra-market competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed changes for each separate type of market participant (new 
Market Makers and existing Market Makers) will be assessed equally to 
all such market participants.
Inter-Market Competition
    The Exchange does not believe that the proposed rule changes will 
impose

[[Page 83535]]

any burden on inter-market competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed modification and extension of the Incentive Program applies 
only to the Market Makers in SPIKES options, which are traded 
exclusively on the Exchange.
    Additionally, the Exchange does not believe that the proposed rule 
changes will impose any burden on inter-market competition that is not 
necessary or appropriate in furtherance of the purposes of the Act 
because the proposed removal of the fee waivers applies only to the 
Exchange's Proprietary Products (including options on SPIKES), which 
are traded exclusively on the Exchange.

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,\32\ and Rule 19b-4(f)(2) \33\ thereunder.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \33\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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

    <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#d9abacb5bcf4bab6b4b4bcb7adaa99aabcbaf7beb6af"><span class="__cf_email__" data-cfemail="7002051c155d131f1d1d151e0403300315135e171f06">[email protected]</span></a>. Please include 
file number SR-MIAX-2024-39 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-MIAX-2024-39. 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-MIAX-2024-39 and should be 
submitted on or before November 6, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\34\
---------------------------------------------------------------------------

    \34\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-23802 Filed 10-15-24; 8:45 am]
BILLING CODE 8011-01-P


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