14196 Federal Register / Vol. 80, No. 52 / Wednesday, March 18, 2015 / Notices 

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

2 17 CFR 240.19b–4. 

3 ‘‘MIAX Market Maker’’ for purposes of the 

proposed sliding scale means any MIAX Market 

Maker including RMM, LMM, PLMM, DLMM, and 

DPLMM. 4See Securities Exchange Act Release Nos. 55193 

(January 30, 2007), 72 FR 5476 (February 6, 2007) 

(SR–CBOE–2006–111); 57191 (January 24, 2008), 73 

FR 5611 (January 30, 2008); 58321 (August 6, 2008), 

73 FR 46955 (SR–CBOE–2008–78). See also CBOE 

Fees Schedule, p. 3. 

5See Securities Exchange Act Release Nos. 55193 

(January 30, 2007), 72 FR 5476 (February 6, 2007) 

(SR–CBOE–2006–111); 58321 (August 6, 2008), 73 

FR 46955 (SR–CBOE–2008–78); 71295 (January 14, 

2014), 79 FR 3443 (January 21, 2014) (SR–CBOE– 

2013–129). 

6See Securities Exchange Act Release Nos. 55193 

(January 30, 2007), 72 FR 5476 (February 6, 2007) 

(SR–CBOE–2006–111); 58321 (August 6, 2008), 73 

FR 46955 (SR–CBOE–2008–78); 71295 (January 14, 

2014), 79 FR 3443 (January 21, 2014) (SR–CBOE– 

2013–129). 

7See, e.g., International Securities Exchange, 

LLC, Schedule of Fees, Section IV, C; NASDAQ 

Options Market, Chapter XV, Section 2. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74489; File No. SR–MIAX– 

2015–13] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend Its Fee Schedule 

March 12, 2015. 

Pursuant to 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 

27, 2015, Miami International Securities 

Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the 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 text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.miaxoptions.com/filter/

wotitle/rule_filing, at MIAX’s principal 

office, and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

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 

current MIAX Market Maker 3 sliding 

scale for transaction fees to: (i) Modify 

the volume thresholds in tiers 1, 2, 3; 

(ii) increase the transaction fee for 

volume tier 1; and (iii) increase the 

Priority Customer rebate incentive for 

tier 1. 

The sliding scale for MIAX Market 

Maker transaction fees is based on the 

substantially similar fees of the Chicago 

Board Options Exchange, Incorporated 

(‘‘CBOE’’).4 Specifically, the program 

reduces a MIAX Market Maker’s per 

contract transaction fee based on 

percentages of total national Market 

Maker volume of any options classes 

that trade on the exchange during the 

calendar month, based on the following 

scale: 

Tier 

Percentage of 

national Market 

Maker volume 

Transaction fee 

per 

contract 

1 ... 0.00%–0.05% ................... $0.25 

2 ... Above 0.05%–0.50% ....... 0.17 

3 ... Above 0.50%–0.80% ....... 0.12 

4 ... Above 0.80%–1.50% ....... 0.07 

5 ... Above 1.50% ................... 0.05 

The sliding scale would apply to all 

MIAX Market Makers for transactions in 

all products except mini-options. By 

amending the volume tier calculations, 

the sliding scale will more closely align 

with that of CBOE.5 A MIAX Market 

Maker’s initial $0.25 per contract rate 

will be reduced if the MIAX Market 

Maker reaches the volume thresholds 

set forth in the sliding scale in a month. 

As a MIAX Market Maker’s monthly 

volume increases, its per contract 

transaction fee would decrease. The 

Market Maker sliding scale will 

continue to apply to MIAX Market 

Maker (RMM, LMM, DLMM, PLMM, 

DPLMM) transaction fees in all products 

except mini-options. MIAX Market 

Makers will continue to be assessed a 

$0.02 per executed contract fee for 

transactions in mini-options. 

The Exchange believes the proposed 

sliding scale is objective in that the fee 

reductions are based solely on reaching 

stated volume thresholds. The specific 

volume thresholds of the tiers were set 

based upon business determinations 

and an analysis of current volume 

levels. The specific volume thresholds 

and rates were set in order to encourage 

MIAX Market Makers to reach for higher 

tiers. The Exchange believes that the 

proposed changes to the tiered fee 

schedule may incent firms to display 

their orders on the Exchange and 

increase the volume of contracts traded 

here. 

As mentioned above, the Exchange 

notes that the proposed sliding fee scale 

for MIAX Market Makers structured on 

contract volume thresholds is based on 

the substantially similar fees of the 

CBOE.6 The Exchange also notes that a 

number of other exchanges have tiered 

fee schedules which offer different 

transaction fee rates depending on the 

monthly ADV of liquidity providing 

executions on their facilities.7

The Exchange also proposes to 

increase the rebate incentive for Priority 

Customer orders to correspond with the 

increase in the transaction fee for tier 1 

of the MIAX Market Maker sliding scale. 

The Exchange offers MIAX Market 

Makers the opportunity to reduce 

transaction fees by $0.02 per contract in 

standard options if the Member or its 

affiliates of at least 75% common 

ownership between the firms as 

reflected on each firm’s Form BD, 

Schedule A, qualifies in a given month 

for Priority Customer Rebate Program 

volume tiers 3, 4, or 5 in the Fee 

Schedule. The Exchange proposes to 

amend the rebate incentive for Priority 

Customer orders in order to increase the 

rebate incentive for tier 1 to correspond 

with the increase in transaction fees for 

volume tier 1 of the MIAX Market 

Maker sliding scale. As proposed, any 

Member or its affiliates of at least 75% 

common ownership between the firms 

as reflected on each firm’s Form BD, 

Schedule A, that qualifies for Priority 

Customer Rebate Program volume tiers 

3, 4, or 5 and is a MIAX Market Maker 

will be assessed $0.23 per contract for 

tier 1, $0.15 per contract for tier 2, $0.10 

per contract for tier 3, $0.05 per contract 

for tier 4, and $0.03 per contract for tier 

5 for transactions in standard options in 

lieu of the applicable transaction fees in 

the Market Maker sliding scale. 

The Exchange believes that these 

incentives will encourage MIAX Market 

Makers to transact a greater number of 

orders on the Exchange. 

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Federal Register / Vol. 80, No. 52 / Wednesday, March 18, 2015 / Notices 14197 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(4). 10 15 U.S.C. 78s(b)(3)(A)(ii). 

Finally, the Exchange proposes to 

modify the name of the title of the 

column in the chart from ‘‘Contracts Per 

Month’’ to ‘‘Percentage Thresholds of 

National Market Maker Volume’’. The 

Exchange believes that the new title 

more clearly describes the type of 

threshold methodology that is being 

used for the fee. 

The proposed changes will become 

operative on March 1, 2015. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its fee schedule is 

consistent with Section 6(b) of the Act 8

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 9 in particular, 

in that it is an equitable allocation of 

reasonable fees and other charges among 

Exchange members. 

The proposed volume based discount 

fee structure is not discriminatory in 

that all MIAX Market Makers are 

eligible to submit (or not submit) 

liquidity, and may do so at their 

discretion in the daily volumes they 

choose during the course of the billing 

period. All similarly situated MIAX 

Market Makers are subject to the same 

fee structure, and access to the 

Exchange is offered on terms that are 

not unfairly discriminatory. Volume 

based discounts have been widely 

adopted by options and equities 

markets, and are equitable because they 

are open to all MIAX Market Makers on 

an equal basis and provide discounts 

that are reasonably related to the value 

of an exchange’s market quality 

associated with higher volumes. The 

proposed fee levels and volume 

thresholds are reasonably designed to be 

comparable to those of other options 

exchanges employing similar fee 

programs, and also to attract additional 

liquidity and order flow to the 

Exchange. 

The Exchange’s proposal to provide 

MIAX Market Makers the opportunity to 

reduce transaction fees by $0.02 per 

contract in standard options, provided 

certain criteria are met, is reasonable 

because the Exchange desires to offer all 

such market participants an opportunity 

to lower their transaction fees. The 

Exchange’s proposal to offer MIAX 

Market Makers the opportunity to 

reduce transaction fees by $0.02 per 

contract in standard options, provided 

certain criteria are met, is equitable and 

not unfairly discriminatory because the 

Exchange offers all market participants, 

excluding Priority Customers, a means 

to reduce transaction fees by qualifying 

for volume tiers in the Priority Customer 

Rebate Program. The Exchange believes 

that offering all such market 

participants the opportunity to lower 

transaction fees by incentivizing them to 

transact Priority Customer order flow in 

turn benefits all market participants. 

Finally, the Exchange believes that 

the proposed to change to the name of 

the title of the column in the chart from 

‘‘Contracts Per Month’’ to ‘‘Percentage 

Thresholds of National Market Maker 

Volume’’ is reasonable in that the new 

title more clearly describes the type of 

threshold methodology that is being 

used for the fee. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

exchanges and to attract order flow. The 

Exchange believes that the proposed 

rule change reflects this competitive 

environment because it modifies the 

Exchange’s fees in a manner that 

encourages market participants to 

provide liquidity and to send order flow 

to 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.10 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–2015–13 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–2015–13. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–MIAX– 

2015–13, and should be submitted on or 

before April 8, 2015. 

mstockstill on DSK4VPTVN1PROD with NOTICES

14198 Federal Register / Vol. 80, No. 52 / Wednesday, March 18, 2015 / Notices 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Exchange Act Release No. 73623 (Nov. 18, 

2014); 79 FR 69905 (Nov. 24, 2014) (‘‘Notice’’). On 

January 6, 2015, FINRA consented to extending the 

time period for the Commission to either approve 

or disapprove the proposed rule change, or to 

institute proceedings to determine whether to 

approve or disapprove the proposed rule change, to 

February 20, 2015. 

4See infra note 10. 

5 15 U.S.C. 78s(b)(2)(B). 

6Exchange Act Release No. 74340 (Feb. 20, 2015); 

80 FR 10538 (Feb. 26, 2015). The comment period 

closes on March 19, 2015. 

7For a comparison of the changes of the rule text 

between the proposal as originally noticed and the 

proposal as amended by Amendment No. 1, see 

Exhibit 4 to SR–FINRA–2014–048. 

8See Securities Exchange Act Release No. 73623 

(November 18, 2014), 79 FR 69905 (November 24, 

2014) (Notice of Filing File No. SR–FINRA–2014– 

048) (‘‘Proposing Release’’). The comment period 

closed on December 15, 2014. 

9The current FINRA rulebook includes, in 

addition to FINRA Rules, (1) NASD Rules and (2) 

rules incorporated from NYSE (‘‘Incorporated NYSE 

Rules’’) (together, the NASD Rules and Incorporated 

NYSE Rules are referred to as the ‘‘Transitional 

Rulebook’’). While the NASD Rules generally apply 

to all FINRA members, the Incorporated NYSE 

Rules apply only to those members of FINRA that 

are also members of the NYSE (‘‘Dual Members’’). 

For more information about the rulebook 

consolidation process, see Information Notice, 

March 12, 2008 (Rulebook Consolidation Process). 

10See Letter from Hugh D. Berkson, Executive 

Vice President and President-Elect, Public Investors 

Arbitration Bar Association, to Brent J. Fields, 

Secretary, SEC, dated December 15, 2014 (‘‘PIABA 

Debt’’); Letter from Kevin Zambrowicz, Associate 

General Counsel and Managing Director, and Sean 

Davy, Managing Director, Securities Industry and 

Financial Markets Association, to Brent J. Fields, 

Secretary, SEC, dated December 15, 2014 

(‘‘SIFMA’’); Letter from Yoon-Young Lee, Wilmer 

Cutler Pickering Hale and Dorr LLP, to Brent J. 

Fields, Secretary, SEC, dated December 16, 2014 

(‘‘WilmerHale Debt’’); Letter from William Beatty, 

President, North American Securities 

Administrators Association, Inc., Brent J. Fields, 

Secretary, SEC, dated December 19, 2014 (‘‘NASAA 

Debt’’); and Letter from Kurt N. Schacht, Managing 

Director, Standards and Financial Market Integrity, 

and Linda L. Rittenhouse, Director, Capital Markets 

Policy, CFA Institute, to Brent J. Fields, Secretary, 

SEC, dated February 9, 2015 (‘‘CFA Institute’’). 

11The proposed rule change reflects proposed 

amendments to FINRA’s equity research rules set 

forth in a companion filing to the proposed rule 

change (the ‘‘equity research filing’’). See Securities 

Exchange Act Release No. 73622 (November 18, 

2014), 79 FR 69939 (November 24, 2014) (Notice of 

Filing File No. SR–FINRA–2014–047). See also 

Amendment No. 1 to SR–FINRA–2014–047. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–06093 Filed 3–17–15; 08:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74490; File No. SR–FINRA– 

2014–048] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Amendment No. 1 to a Proposed Rule 

Change To Adopt FINRA Rule 2242 

(Debt Research Analysts and Debt 

Research Reports) 

March 12, 2015. 

I. Introduction 

On November 14, 2014, Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

to adopt new FINRA Rule 2242 (Debt 

Research Analysts and Debt Research 

Reports) to address conflicts of interest 

relating to the publication and 

distribution of debt research reports. 

The proposal was published for 

comment in the Federal Register on 

November 24, 2014.3 The Commission 

received five comments on the 

proposal.4 On February 19, 2015, FINRA 

filed Amendment No. 1 responding to 

the comments received to the proposal 

as well as to propose amendments in 

response to these comments. On 

February 20, 2015, the Commission 

issued an order instituting proceedings 

pursuant to Section 19(b)(2)(B) of the 

Act 5 to determine whether to approve 

or disapprove the proposal. The order 

was published for comment in the 

Federal Register on February 26, 2015.6

The proposed rule change, as 

modified by Amendment No. 1, is 

described in Items II and III below, 

which Items have been substantially 

prepared by FINRA.7 The Commission 

is publishing this notice to solicit 

comments from interested persons on 

the proposal as amended by 

Amendment No. 1. 

II. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing Amendment No. 

1 to SR–FINRA–2014–048, a proposed 

rule change to adopt FINRA Rule 2242 

(Debt Research Analysts and Debt 

Research Reports) to address conflicts of 

interest relating to the publication and 

distribution of debt research reports. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA and at the 

Commission’s Public Reference Room. 

III. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA 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 V below. FINRA 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 

Rule Filing History 

On November 14, 2014, FINRA filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) SR– 

FINRA–2014–048,8 a proposed rule 

change to adopt in the consolidated 

FINRA rulebook (‘‘Consolidated FINRA 

Rulebook’’) 9 Rule 2242 (Debt Research 

Analysts and Debt Research Reports) to 

address conflicts of interest relating to 

the publication and distribution of debt 

research reports. 

The Commission published the 

proposed rule change for public 

comment in the Federal Register on 

November 24, 2014. The Commission 

received five comment letters directed 

to the filing.10 Based on comments 

received, FINRA is filing this 

Amendment No. 1 to respond to the 

comments and to propose amendments, 

where appropriate. The Amendment 

also includes a few technical, nonsubstantive changes. 

Proposal 

As described in greater detail in the 

Proposing Release, the proposed rule 

change would adopt a tiered approach 

that, in general, would provide retail 

debt research recipients with extensive 

protections similar to those provided to 

recipients of equity research under 

current and proposed FINRA rules, with 

modifications to reflect the different 

nature and trading of debt securities,11

while exempting from many of the 

provisions debt research distributed 

solely to eligible institutional investors. 

Definitions 

Most of the defined terms closely 

follow the defined terms for equity 

research in NASD Rule 2711, as 

amended by the equity research filing, 

with minor changes to reflect their 

application to debt research. The 

proposed definitions are set forth below. 

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