16048 Federal Register / Vol. 80, No. 58 / Thursday, March 26, 2015 / Notices 

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

2 17 CFR 240.19b–4. 

3See MIAX Options Fee Schedule, Section 

1)a)iii). 

4See id. 

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

6 15 U.S.C. 78f(b)(4). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74554; File No. SR–MIAX– 

2015–21] 

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 20, 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 March 11, 

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 

Fee Schedule to provide for additional 

incentives for achieving certain Priority 

Customer Rebate Program volume tiers 

and sending additional Priority 

Customer Orders into PRIME. 

The Exchange proposes to offer 

Members the opportunity to qualify for 

a $0.02 per contract rebate 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.3 Specifically, 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 will be credited an additional 

$0.02 per contract for each Priority 

Customer order executed in the PRIME 

Auction as a PRIME Agency Order over 

a threshold of 1,500,000 contracts in a 

month. Volume will be recorded for and 

credits will be delivered to the Member 

Firm that submits the order to MIAX. 

The $0.02 per contract credit would be 

in addition to the $0.10 per contract 

credit that currently applies to the 

PRIME Agency Order transactions that 

are Priority Customers. The Exchange 

proposes to exclude from this additional 

rebate and its volume threshold 

calculation orders executed as minioptions, Priority Customer-to-Priority 

Customer Orders, PRIME AOC 

Responses, PRIME Contra-side Orders, 

PRIME Orders for which both the 

Agency and Contra-side Order are 

Priority Customers, and executions 

related to contracts that are routed to 

one or more exchanges in connection 

with the Options Order Protection and 

Locked/Crossed Market Plan referenced 

in MIAX Rule 1400. The Exchange notes 

that these exclusions are identical to the 

exclusions that are currently found in 

the Priority Customer Rebate Program 

and that also apply to the per contract 

credit for PRIME Agency Orders.4

The Exchange believes that these 

incentives will encourage Members to 

transact a greater number of orders on 

the Exchange. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its fee schedule is 

consistent with Section 6(b) of the Act 5

in general, and furthers the objectives of 

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

in that it is an equitable allocation of 

reasonable fees and other charges among 

Exchange members. 

The Exchange believes that the 

proposed Priority Customer Rebate 

Program rebates for Priority Customer 

orders submitted into PRIME are fair, 

equitable and not unreasonably 

discriminatory. The rebate program is 

reasonably designed because it will 

incent providers of Priority Customer 

order flow to send that Priority 

Customer order flow to the Exchange in 

order to receive a credit in a manner 

that enables the Exchange to improve its 

overall competitiveness and strengthen 

its market quality for all market 

participants. The proposed rebate 

program is fair, equitable, and not 

unreasonably discriminatory because it 

will apply equally to all Priority 

Customer orders submitted as a PRIME 

Agency Order. All similarly situated 

Priority Customer orders are subject to 

the same rebate schedule, and access to 

the Exchange is offered on terms that are 

not unfairly discriminatory. In addition, 

the proposed rebate program is 

equitable and not unfairly 

discriminatory because, while only 

Priority Customer order flow qualifies 

for the rebate program, an increase in 

Priority Customer order flow will bring 

greater volume and liquidity, which 

benefit all market participants by 

providing more trading opportunities 

and tighter spreads. Market participants 

want to trade with Priority Customer 

order flow. To the extent Priority 

Customer order flow is increased by the 

proposal, market participants will 

increasingly compete for the 

opportunity to trade on the Exchange 

including sending more orders and 

providing narrower and larger sized 

quotations in the effort to trade with 

such Priority Customer order flow. The 

resulting increased volume and 

liquidity will benefit those Members 

who receive the lower tier levels, or do 

not qualify for the rebate program at all, 

by providing more trading opportunities 

and tighter spreads. 

The Exchange believes excluding 

Priority Customer-to-Priority Customer 

Orders, Priority Customer responses, 

contra-side orders, and Priority 

Customer-to-Priority Customer PRIME 

transactions from the number of options 

contracts executed on the Exchange by 

any Member for purposes of the volume 

threshold and the rebate program is 

reasonable, equitable, and not unfairly 

discriminatory because participating 

Members could otherwise game the 

rebate program and volume thresholds 

by executing excess volumes in these 

types of transactions in which no 

transaction fees are charged on the 

Exchange. Further, the Exchange 

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Federal Register / Vol. 80, No. 58 / Thursday, March 26, 2015 / Notices 16049 

7See e.g., Chicago Board Options Exchange, 

Incorporated, Fee Schedule, p. 13; NYSE Amex 

Options Fee Schedule, p. 12. 8 15 U.S.C. 78s(b)(3)(A)(ii). 9 17 CFR 200.30–3(a)(12). 

believes that excluding these PRIME 

transactions from the volume 

calculation is reasonable, equitable, and 

not unfairly discriminatory because the 

rebate program was established prior to 

the introduction of the PRIME Auction 

based on non-auction transaction fee 

and volume calculations. In contrast, 

the Exchange proposes to target new 

volume to the Exchange to compete 

with electronic price improvement 

mechanisms on other exchanges. The 

Exchange believes that the new rebate 

for Priority Customer agency orders in 

the PRIME Auction is reasonably 

designed to incentivize additional retail 

customer order flow to the PRIME 

Auction. 

The Exchange believes that the 

proposal to allow the aggregation of 

trading activity of separate Members or 

its affiliates for purposes of the fee 

reduction is fair, equitable and not 

unreasonably discriminatory. The 

Exchange believes the proposed rule 

change is reasonable because it would 

allow aggregation of the trading activity 

of separate Members or its affiliates for 

purposes of the fee reduction only in 

very narrow circumstances, namely, 

where the firm is an affiliate, as defined 

herein. Furthermore, other exchanges, 

as well as MIAX, have rules that permit 

the aggregation of the trading activity of 

affiliated entities for the purposes of 

calculating and assessing certain fees.7

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. 

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 believes the proposal is 

consistent with robust competition by 

increasing the intermarket competition 

for order flow from market participants. 

To the extent that there is additional 

competitive burden on market 

participants without Priority Customer 

order flow and those market 

participants that are not able to 

aggregate order flow with affiliates, the 

Exchange believes that this is 

appropriate because the proposal should 

incent Members to direct additional 

order flow to the Exchange and thus 

provide additional liquidity that 

enhances the quality of its markets and 

increases the volume of contracts traded 

here. To the extent that this purpose is 

achieved, all the Exchange’s market 

participants should benefit from the 

improved market liquidity. Enhanced 

market quality and increased 

transaction volume that results from the 

anticipated increase in order flow 

directed to the Exchange will benefit all 

market participants and improve 

competition on the Exchange. 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 proposal 

reflects this competitive environment. 

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.8 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–2015–21 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–2015–21. 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– 

2015–21, and should be submitted on or 

before April 16, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–06888 Filed 3–25–15; 8:45 am] 

BILLING CODE 8011–01–P 

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