9766 Federal Register / Vol. 87, No. 35 / Tuesday, February 22, 2022 / Notices 

19See supra note 14. 

20 15 U.S.C. 78s(b)(3)(A). 

21 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

of the remote manner in which 

inspections for the calendar year 2022 

may be conducted. Additionally, and as 

stated above, FINRA has recently 

submitted a filing to extend its 

substantively identical temporary 

remote relief rule for its trading permit 

holders and members in the same 

manner.19

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 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to 19(b)(3)(A) 

of the Act 20 and Rule 19b–4(f)(6) 21

thereunder. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

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–2022–09 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–2022–09. 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 (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 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 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. 

All submissions should refer to File 

Number SR–MIAX–2022–09 and should 

be submitted on or before March 15, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–03648 Filed 2–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94263; File No. SR– 

EMERALD–2022–06] 

Self-Regulatory Organizations; MIAX 

Emerald, LLC; Notice of Filing of a 

Proposed Rule Change To Establish 

Fees for the Exchange’s cToM Market 

Data Product; Suspension of and 

Order Instituting Proceedings To 

Determine Whether To Approve or 

Disapprove the Proposed Rule Change 

February 15, 2022. 

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 

7, 2022, MIAX Emerald, LLC (‘‘MIAX 

Emerald’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Item II below, which 

Item has been prepared by the 

Exchange. The Exchange filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A)(ii) of the Act,3 and 

Rule 19b–4(f)(2) thereunder.4 The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons and is, 

pursuant to Section 19(b)(3)(C) of the 

Act, hereby: (i) Temporarily suspending 

the proposed rule change; and (ii) 

instituting proceedings to determine 

whether to approve or disapprove the 

proposed rule change. 

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 Exchange’s Fee Schedule 

(‘‘Fee Schedule’’) to establish fees for 

the market data product known as 

MIAX Emerald Complex Top of Market 

(‘‘cToM’’). The fees became operative on 

February 7, 2022. The text of the 

proposed rule change is available on the 

Exchange’s website at http://

www.miaxoptions.com/rule-filings/ 

emerald, at MIAX’s principal office, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Description of 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 


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5See Securities Exchange Act Release No. 92358 

(July 9, 2021), 86 FR 37361 (July 15, 2021) (SR– 

EMERALD–2021–21). 6 Id. 

7See Securities Exchange Act Release No. 92789 

(August 27, 2021), 86 FR 49364 (September 2, 2021) 

(SR–MIAX–2021–28, SR–EMERALD–2021–21) (the 

‘‘Suspension Order’’). 8See Securities Exchange Act Release No. 93471 

(October 29, 2021), 86 FR 60947 (November 4, 

2021). 

9See SR–EMERALD–2021–32. 

10Securities Exchange Act Release No. 93427 

(October 26, 2021), 86 FR 60310 (November 1, 2021) 

(SR–EMERALD–2021–34). 

11 Id. 

12Securities Exchange Act Release No. 93811 

(December 17, 2021), 86 FR 73051 (December 23, 

2021) (SR–EMERALD–2021–44). 

13 Id. 

14See Exchange Rule 518(a)(5) for the definition 

of Complex Orders. 

15The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

16See Securities Exchange Act Release Nos. 

84891 (December 20, 2018), 83 FR 67421 (December 

28, 2018) (In the Matter of the Application of MIAX 

EMERALD, LLC for Registration as a National 

Securities Exchange; Findings, Opinion, and Order 

of the Commission); and 85345 (March 18, 2019), 

84 FR 10848 (March 22, 2019) (SR–EMERALD– 

2019–13) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change To Amend 

Exchange Rule 518, Complex Orders). 

17See Securities Exchange Act Release No. 85207 

(February 27, 2019), 84 FR 7963 (March 5, 2019) 

(SR–EMERALD–2019–09) (providing a complete 

description of the cToM data feed). 

18The ‘‘Strategy Book’’ is the Exchange’s 

electronic book of complex orders and complex 

quotes. See Exchange Rule 518(a)(17). 19See supra note 15. 20A ‘‘Distributor’’ of MIAX Emerald data is any 

entity that receives a feed or file of data either 

directly from MIAX Emerald or indirectly through 

another entity and then distributes it either 

internally (within that entity) or externally (outside 

that entity). All Distributors are required to execute 

a MIAX Emerald Distributor Agreement. See 

Section 6)a) of the Fee Schedule. 

21The Exchange also proposes to make a minor 

related change to remove ‘‘(as applicable)’’ from the 

explanatory paragraph in Section 6)a) as it will not 

change fees for both the ToM and cToM data feeds. 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV [sic] 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 

Section 6)a) of the Fee Schedule to 

establish fees for the cToM data 

product. The Exchange initially filed 

this proposal on June 30, 2021 with the 

proposed fees to be effective beginning 

July 1, 2021 (‘‘First Proposed Rule 

Change’’).5 The First Proposed Rule 

Change was published for comment in 

the Federal Register on July 15, 2021.6

Although the Commission did not 

receive any comment letters on the First 

Proposed Rule Change, on August 27, 

2021, the Commission issued its 

Suspension of and Order Instituting 

Proceedings to Determine Whether to 

Approve or Disapprove Proposed Rule 

Changes to Establish Fees for the 

Exchanges’ cToM Market Data Products 

(relating to the First Proposed Rule 

Change and a similar filing by the 

Exchange’s affiliate, Miami International 

Securities Exchange, LLC (‘‘MIAX’’), to 

also adopt cToM fees).7 The Exchange 

withdrew the First Proposed Rule 

Change on September 30, 2021 8 and resubmitted the proposal, with the 

proposed fee changes being immediately 

effective (‘‘Second Proposed Rule 

Change’’).9 The Second Proposed Rule 

Change provided additional justification 

for the proposed fee changes and 

addressed comments provided by the 

Commission Staff. On October 14, 2021, 

the Exchange withdrew the Second 

Proposed Rule Change and submitted its 

proposal to adopt cToM fees to again 

provide additional justification for the 

proposed fee changes and address 

comments provided by the Commission 

Staff (‘‘Third Proposed Rule Change’’).10

The Third Proposed Rule Change was 

published for comment in the Federal 

Register on November 1, 2021.11

Although the Commission did not again 

receive any comment letters on the 

Third Proposed Rule Change, the 

Exchange withdrew the Third Proposed 

Rule Change on December 10, 2021 

submitted a revised proposal for 

immediate effectiveness (‘‘Fourth 

Proposed Rule Change’’).12 The Fourth 

Proposed Rule Change was published 

for comment in the Federal Register on 

December 23, 2021.13 The Fourth 

Proposed Rule Change meaningfully 

attempted to provide additional 

justification and explanation for the 

proposed fee change in response to a 

telephone conversation with 

Commission Staff on December 7, 2021 

relating to the Third Proposed Rule 

Change. Although the Commission 

again did not receive any comment 

letters on the Fourth Proposed Rule 

Change, the Exchange withdrew the 

Fourth Proposed Rule Change on 

February 7, 2022 and now submits this 

revised proposal for immediate 

effectiveness (‘‘Fifth Proposed Rule 

Change’’). This Fifth Proposed Rule 

Change provides additional justification 

and explanation for the proposed fee 

changes. 

Background 

The Exchange previously adopted 

rules governing the trading of Complex 

Orders 14 on the MIAX Emerald 

System 15 in 2018,16 ahead of the 

Exchange’s planned launch, which took 

place on March 1, 2019. Shortly 

thereafter, the Exchange adopted the 

market data product cToM and 

expressly waived fees for cToM to 

provide an incentive to prospective 

market participants to subscribe to that 

market data feed.17 Prior to the First 

Proposed Rule Change, the Exchange 

did not charge fees to cToM subscribers 

during the nearly three years since it 

was first available for subscription. 

In summary, cToM provides 

subscribers with the same information 

as the MIAX Emerald Top of Market 

(‘‘ToM’’) data product as it relates to the 

Strategy Book,18 i.e., the Exchange’s best 

bid and offer for a complex strategy, 

with aggregate size, based on 

displayable order and quoting interest 

in the complex strategy on the 

Exchange. However, cToM provides 

subscribers with the following 

additional information that is not 

included in ToM: (i) The identification 

of the complex strategies currently 

trading on the Exchange; (ii) complex 

strategy last sale information; and (iii) 

the status of securities underlying the 

complex strategy (e.g., halted, open, or 

resumed). cToM is therefore a distinct 

market data product from ToM in that 

it includes additional information that 

is not available to subscribers that 

receive only the ToM data feed. ToM 

subscribers are not required to subscribe 

to cToM, and cToM subscribers are not 

required to subscribe to ToM.19

Proposal 

The Exchange now proposes to amend 

Section 6)a) of the Fee Schedule to 

charge monthly fees to Distributors 20 of 

cToM. Specifically, the Exchange 

proposes to assess Internal Distributors 

$1,250 per month and External 

Distributors $1,750 per month for the 

cToM data feed.21 The Exchange notes 

that the proposed monthly cToM fees 

for Internal and External Distributors are 

the same prices that the Exchange 

charges for its ToM data product and are 

identical to the prices the Exchange’s 

affiliate, MIAX, proposes to charge for 

its cToM product. 

As it does today for ToM, the 

Exchange proposes to assess cToM fees 

on Internal and External Distributors in 

each month the Distributor is 

credentialed to use cToM in the 

production environment. Also, as the 

Exchange does today for ToM, market 

data fees for cToM will be reduced for 

new Distributors for the first month 

during which they subscribe to cToM, 


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9768 Federal Register / Vol. 87, No. 35 / Tuesday, February 22, 2022 / Notices 

22See NYSE American Options Proprietary 

Market Data Fees, American Options Complex Fees, 

at https://www.nyse.com/publicdocs/nyse/data/ 

NYSE_American_Options_Market_Data_Fee_

Schedule.pdf. 

23See NYSE Arca Options Proprietary Market 

Data Fees, Arca Options Complex Fees, at https:// 

www.nyse.com/publicdocs/nyse/data/NYSE_Arca_

Options_Proprietary_Data_Fee_Schedule.pdf. 

24See PHLX Price List—U.S. Derivatives Data, 

PHLX Orders Fees, at http://

www.nasdaqtrader.com/Trader.aspx?id=

DPPriceListOptions#PHLX. 

25See MIAX website, Market Data & Offerings, at 

https://www.miaxoptions.com/market-dataofferings (last visited December 10, 2021). In 

general, MOR provides real-time ulta-low latency 

updates on the following information: New Simple 

Orders added to the MIAX Emerald Order Book; 

updates to Simple Orders resting on the MIAX 

Emerald Order Book; new Complex Orders added 

to the Strategy Book (i.e., the book of Complex 

Orders); updates to Complex Orders resting on the 

Strategy Book; MIAX Emerald listed series updates; 

MIAX Emerald Complex Strategy definitions; the 

state of the MIAX Emerald System; and MIAX 

Emerald’s underlying trading state. 

26 15 U.S.C. 78f(b). 

27 15 U.S.C. 78f(b)(4) and (5). 

28See Securities Exchange Act Release No. 85459 

(March 29, 2019), 84 FR 13363 (April 4, 2019) (SR– 

BOX–2018–24, SR–BOX–2018–37, and SR–BOX– 

2019–04) (Order Disapproving Proposed Rule 

Changes to Amend the Fee Schedule on the BOX 

Market LLC Options Facility to Establish BOX 

Connectivity Fees for Participants and NonParticipants Who Connect to the BOX Network). 

29See Staff Guidance on SRO Rule Filings 

Relating to Fees (May 21, 2019), at https://

www.sec.gov/tm/staff-guidance-sro-rule-filings-fees 

(the ‘‘Guidance’’). 

based on the number of trading days 

that have been held during the month 

prior to the date on which that 

subscriber has been credentialed to use 

cToM in the production environment. 

Such new Distributors will be assessed 

a pro-rata percentage of the fees in the 

table in Section 6)a) of the Fee 

Schedule, which is the percentage of the 

number of trading days remaining in the 

affected calendar month as of the date 

on which they have been credentialed to 

use cToM in the production 

environment, divided by the total 

number of trading days in the affected 

calendar month. 

The Exchange believes that other 

exchanges’ fees for complex market data 

are useful examples and provides the 

below table for comparison purposes 

only to show how the Exchange’s 

proposed fees compare to fees currently 

charged by other options exchanges for 

similar complex market data. As shown 

by the below table, the Exchange’s 

proposed fees for cToM are similar to or 

less than fees charged for similar data 

products provided by other options 

exchanges. 

Exchange Monthly fee 

MIAX Emerald (as proposed) ................................................................... $1,250—Internal Distributor. $1,750—External Distributor 

NYSE American, LLC (‘‘Amex’’) 22 ........................................................... $1,500 Access Fee. $1,000 Redistribution Fee. 

NYSE Arca, Inc. (‘‘Arca’’) 23 ...................................................................... $1,500 Access Fee. $1,000 Redistribution Fee. 

NASDAQ PHLX LLC (‘‘PHLX’’) 24 ............................................................ $3,000—Internal Distributor. $3,500—External Distributor. 

The Exchange also proposes to amend 

the paragraph below the table of fees for 

ToM and cToM in Section 6)a) of the 

Fee Schedule to make a minor, nonsubstantive corrective edit. In particular, 

the Exchange proposes to delete the 

phrase ‘‘(as applicable)’’ in the first 

sentence following the table of fees for 

ToM and cToM. The purpose of this 

proposed change is to remove 

unnecessary text from the Fee Schedule. 

cToM Content Is Available From 

Alternative Sources 

cToM is also not the exclusive source 

for Complex Order information from the 

Exchange and market participants may 

choose to subscribe to the Exchange’s 

other data products to receive such 

information. It is a business decision of 

market participants whether to 

subscribe to the cToM data product or 

not. Market participants that choose not 

to subscribe to cToM can derive much, 

if not all, of the same information 

provided in the cToM feed from other 

Exchange sources, including, for 

example, the MIAX Emerald Order Feed 

(‘‘MOR’’).25 The following cToM 

information is provided to subscribers 

of MOR: The Exchange’s best bid and 

offer for a complex strategy, with 

aggregate size, based on displayable 

order and quoting interest in the 

complex strategy on the Exchange; the 

identification of the complex strategies 

currently trading on the Exchange; and 

the status of securities underlying the 

complex strategy (e.g., halted, open, or 

resumed). In addition to the cToM 

information contained in MOR, complex 

strategy last sale information can be 

derived from the Exchange’s ToM data 

feed. Specifically, market participants 

may deduce that last sale information 

for multiple trades in related options 

series that are disseminated via the ToM 

data feed with the same timestamp are 

likely part of a Complex Order 

transaction and last sale. 

Implementation 

The proposed rule change is 

immediately effective. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 26

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 27 in 

particular, in that it is an equitable 

allocation of reasonable dues, 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, 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 is not designed to permit 

unfair discrimination between 

customers, issuers, brokers and dealers. 

On March 29, 2019, the Commission 

issued an Order disapproving a 

proposed fee change by the BOX Market 

LLC Options Facility to establish 

connectivity fees for its BOX Network 

(the ‘‘BOX Order’’).28 On May 21, 2019, 

the Commission Staff issued guidance 

‘‘to assist the national securities 

exchanges and FINRA . . . in preparing 

Fee Filings that meet their burden to 

demonstrate that proposed fees are 

consistent with the requirements of the 

Securities Exchange Act.’’ 29 Based on 

both the BOX Order and the Guidance, 

the Exchange believes that it has clearly 

met its burden to demonstrate that the 

proposed fees are consistent with the 

Act because they (i) are reasonable, 

equitably allocated, not unfairly 

discriminatory, and not an undue 

burden on competition; (ii) comply with 

the BOX Order and the Guidance; (iii) 

are supported by evidence (including 

comprehensive revenue and cost data 

and analysis) that they are fair and 

reasonable because they will not result 

in excessive pricing or supracompetitive profit; and (iv) utilize a 

cost-based justification framework that 

is substantially similar to a framework 

previously used by the Exchange, and 

its affiliates MIAX and MIAX PEARL, 


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30See Securities Exchange Act Release Nos. 

91145 (February 17, 2021), 86 FR 11033 (February 

23, 2021) (SR–EMERALD–2021–05) (proposal to 

establish market data fees for MIAX Emerald ToM, 

Administrative Information Subscriber feed, and 

MIAX Emerald Order Feed); 90981 (January 25, 

2021), 86 FR 7582 (January 29, 2021) (SR–PEARL– 

2021–01) (proposal to increase connectivity fees); 

91460 (April 2, 2021), 86 FR 18349 (SR–EMERALD– 

2021–11) (proposal to adopt port fees, increase 

connectivity fees, and increase additional limited 

service ports); 91033 (February 1, 2021), 86 FR 8455 

(February 5, 2021) (SR–EMERALD–2021–03) 

(proposal to adopt trading permit fees). 

31See Guidance, supra note 27. 

32 Id. 

33 Id. 

34 Id. 

35 Id. 

36 Id. 

37For example, the Exchange only included the 

costs associated with providing and supporting 

cToM data feeds and excluded from its cost 

calculations any cost not directly associated with 

providing and maintaining such cToM data feeds. 

Thus, the Exchange notes that this methodology 

underestimates the total costs of providing and 

maintaining cToM data feeds. 

LLC (‘‘MIAX Pearl’’), to adopt or amend 

market data and non-transaction fees.30

The Proposed Fees Will Not Result in a 

Supra-Competitive Profit 

The Exchange believes that 

exchanges, in setting fees of all types, 

should meet very high standards of 

transparency to demonstrate why each 

new fee or fee amendment meets the 

requirements of the Act that fees be 

reasonable, equitably allocated, not 

unfairly discriminatory, and not create 

an undue burden on competition among 

market participants. The Exchange 

believes this high standard is especially 

important when an exchange sets 

certain non-transaction fees, including 

market data fees. The Exchange believes 

that it is important to demonstrate that 

these fees are based on its costs to 

provide these products and reasonable 

business needs. 

In the Guidance, the Commission 

Staff stated that, ‘‘[a]s an initial step in 

assessing the reasonableness of a fee, 

staff considers whether the fee is 

constrained by significant competitive 

forces.’’ 31 The Guidance further states 

that, ‘‘. . . even where an SRO cannot 

demonstrate, or does not assert, that 

significant competitive forces constrain 

the fee at issue, a cost-based discussion 

may be an alternative basis upon which 

to show consistency with the Exchange 

Act.’’ 32 In the Guidance, the 

Commission Staff further states that, 

‘‘[i]f an SRO seeks to support its claims 

that a proposed fee is fair and 

reasonable because it will permit 

recovery of the SRO’s costs, or will not 

result in excessive pricing or supracompetitive profit, specific information, 

including quantitative information, 

should be provided to support that 

argument.’’ 33 The Exchange does not 

assert that the proposed fees are 

constrained by competitive forces. 

Rather, the Exchange asserts that the 

proposed fees are reasonable because 

they will permit recovery of the 

Exchange’s costs in providing services 

to supply cToM data and will not result 

in the Exchange generating a supracompetitive profit. 

The Guidance defines ‘‘supracompetitive profit’’ as ‘‘profits that 

exceed the profits that can be obtained 

in a competitive market.’’ 34 The 

Commission Staff further states in the 

Guidance that ‘‘the SRO should provide 

an analysis of the SRO’s baseline 

revenues, costs, and profitability (before 

the proposed fee change) and the SRO’s 

expected revenues, costs, and 

profitability (following the proposed fee 

change) for the product or service in 

question.’’ 35 The Exchange provides 

this analysis below. 

Based on this analysis, the Exchange 

believes the proposed fees are 

reasonable and do not result in a 

‘‘supra-competitive’’ 36 profit. The 

Exchange believes that it is important to 

demonstrate that the proposed fees are 

based on its costs and reasonable 

business needs. The Exchange believes 

the proposed fees will allow the 

Exchange to offset expenses the 

Exchange has and will incur, and that 

the Exchange provides sufficient 

transparency (described below) into the 

costs and revenue underlying the 

proposed fees. Accordingly, the 

Exchange provides an analysis of its 

revenues, costs, and profitability 

associated with the proposed fees. This 

analysis includes information regarding 

its methodology for determining the 

costs and revenues associated with the 

proposed fees. As a result of this 

analysis, the Exchange believes the 

proposed fees are fair and reasonable as 

a form of cost recovery plus present the 

possibility of a reasonable return for the 

Exchange’s aggregate costs of offering 

cToM data, which has been offered for 

free for nearly three years. 

The proposed fees are based on a costplus model. In determining the 

appropriate fees to charge, the Exchange 

considered its costs to provide cToM 

data, using what it believes to be a 

conservative methodology (i.e., that 

strictly considers only those costs that 

are most clearly directly related to the 

provision and maintenance of cToM 

data) to estimate such costs,37 as well as 

the relative costs of providing and 

maintaining cToM data feeds, and set 

fees that are designed to cover its costs 

with a limited return in excess of such 

costs. However, as discussed more fully 

below, such fees may also result in the 

Exchange recouping less than all of its 

costs of providing and maintaining 

cToM data feeds because of the 

uncertainty of forecasting subscriber 

decision making with respect to firms’ 

needs for cToM data and the likely 

potential for increased costs to procure 

the third-party services described 

below. 

To determine the Exchange’s costs to 

provide cToM data associated with the 

proposed fees, the Exchange conducted 

an extensive cost review in which the 

Exchange analyzed nearly every 

expense item in the Exchange’s general 

expense ledger to determine whether 

each such expense relates to the 

proposed fees, and, if such expense did 

so relate, what portion (or percentage) of 

such expense actually supports the 

cToM data product associated with the 

proposed fees. 

The Exchange also provides detailed 

information regarding the Exchange’s 

cost allocation methodology—namely, 

information that explains the 

Exchange’s rationale for determining 

that it was reasonable to allocate certain 

expenses described in this filing 

towards the cost to the Exchange to 

provide the services associated with the 

proposed fees. The Exchange conducted 

a thorough internal analysis to 

determine the portion (or percentage) of 

each expense to allocate to the support 

of services associated with the proposed 

fees. This analysis included discussions 

with each Exchange department head to 

determine the expenses that support 

services associated with the proposed 

fees. This included numerous meetings 

between the Exchange’s Chief 

Information Officer, Chief Financial 

Officer, Head of Strategic Planning and 

Operations, Chief Technology Officer, 

various members of the Legal 

Department, and other group leaders. 

The Exchange reviewed each individual 

expense to determine if such expense 

was related to the proposed fees. Once 

the expenses were identified, the 

Exchange department heads, with the 

assistance of the Exchange’s internal 

finance department, reviewed such 

expenses holistically on an Exchangewide level to determine what portion of 

that expense supports providing 

services for the proposed fees. The sum 

of all such portions of expenses 

represents the total cost to the Exchange 

to provide services associated with the 

proposed fees. For the avoidance of 

doubt, no expense amount was allocated 

twice. 

The internal cost analysis conducted 

by the Exchange is a proprietary process 


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38See, e.g., Securities Exchange Act Release Nos. 

93293 (October 12, 2021), 86 FR 57716 (October 18, 

2021) (SR–PHLX–2021–58) (increasing several 

market data fees and adopting new market data fee 

without providing a cost based justification); 91339 

(March 17, 2021), 86 FR 15524 (March 23, 2021) 

(SR-CboeBZX–2021–020) (increasing fees for a 

market data product while not providing a cost 

based justification for the increase); 93293 (October 

21, 2021), 86 FR 57716 (October 18, 2021) (SR– 

PHLX–2021–058) (increasing fees for historical 

market data while not providing a cost based 

justification for the increase); 92970 (September 14, 

2021), 86 FR 52261 (September 20, 2021) (SRCboeBZX–2021–047) (adopting fees for a market 

data related product while not providing a cost 

based justification for the fees); and 89826 

(September 10, 2021), 85 FR 57900 (September 16, 

2021) (SR–CBOE–2020–086) (increasing 

connectivity fees without including a cost based 

justification). 

39See Securities Exchange Act Release No. 93293 

(October 12, 2021), 86 FR 57716 (October 18, 2021) 

(SR–PHLX–2021–58) (increasing several market 

data fees and adopting new market data fee without 

providing a cost based justification). 

40See Securities Exchange Act Release No. 93883 

(December 30, 2021), 87 FR 523 (January 5, 2021) 

(SR–IEX–2021–14) (the ‘‘IEX Order’’). 

41See letters to Ms. Venessa A. Countryman, 

Secretary, Commission, from Douglas A. Cifu, Chief 

Executive Officer, Virtu Financial, Inc., dated 

January 26, 2022 (the ‘‘Virtu Letter’’), Tyler 

Gellasch, Executive Director, Healthy Markets 

Association (‘‘HMA’’), dated January 26, 2022 (the 

‘‘HMA Letter 2’’), and Erika Moore, Vice President 

and Corporate Secretary, The Nasdaq Stock Market 

LLC, dated January 27, 2022 (the ‘‘Nasdaq Letter’’). 

42See Virtu Letter at page 3, id. 

43HMA previously expressed their ‘‘worry that 

the Commission’s process for reviewing and 

evaluating exchange filings may be inconsistently 

applied.’’ See letter from Tyler Gellasch, Executive 

Director, HMA, to Hon. Gary Gensler, Chair, 

Commission, dated October 29, 2021 (commenting 

on SR-CboeEDGA–2021–017, SR-CboeBYX–2021– 

020, SR-Cboe-BZX–2021–047, SR-CboeEDGX– 

2021–030, SR–MIAX–2021–41, SR–PEARL–2021– 

45, and SR–EMERALD–2021–29 and stating that 

‘‘MIAX has repeatedly filed to change its 

connectivity fees in a way that will materially lower 

costs for many users, while increasing the costs for 

some of its heaviest of users. These filings have 

been withdrawn and repeatedly refiled. Each time, 

however, the filings contain significantly greater 

information about who is impacted and how than 

other filings that have been permitted to take effect 

without suspension’’) (emphasis added) (‘‘HMA 

Letter 1’’). 

44See HMA Letter 2 at 2–3. The Exchange has 

provided further examples to support HMA’s 

assertion above. See supra note 39 and 

accompanying text. 

45See Nasdaq Letter at page 13, id. 

that is designed to make a fair and 

reasonable assessment of costs and 

resources allocated to support the 

provision of services associated with the 

proposed fees. The Exchange 

acknowledges that this assessment can 

only capture a moment in time and that 

costs and resource allocations may 

change. That is why the Exchange has 

historically, and on an ongoing basis, 

periodically revisits its costs and 

resource allocations to ensure it is 

appropriately allocating resources to 

properly provide services to the 

Exchange’s constituents. Any 

requirement that an exchange should 

conduct a periodic re-evaluation on a 

set timeline of its cost justification and 

amend its fees accordingly should be 

established by the Commission 

holistically, applied to all exchanges 

and not just pending fee proposals such 

as this filing. In order to be fairly 

applied, such a mandate should be 

applied to existing market data fees as 

well. 

In accordance with the Guidance, the 

Exchange has provided sufficient detail 

to support a finding that the proposed 

fees are consistent with the Exchange 

Act. The proposal includes a detailed 

description of the Exchange’s costs and 

how the Exchange determined to 

allocate those costs related to the 

proposed fees. In fact, the detail and 

analysis provided in this proposed rule 

change far exceed the level of disclosure 

provided in other exchange fee filings 

that have not been suspended by the 

Commission during its 60-day 

suspension period. A Commission 

determination that it is unable to make 

a finding that this proposed rule change 

is consistent with the Exchange Act 

would run contrary to the Commission 

Staff’s treatment of other recent 

exchange fee proposals that have not 

been suspended and remain in effect 

today.38 For example, a proposed fee 

filing that closely resembles the 

Exchange’s current filing was submitted 

in 2021 by Nasdaq PHLX LLC 

(‘‘PHLX’’), which increased fees for 

PHLX’s end of day, intra-day and 

historical market data, and adopted fees 

for external distribution of PHLX’s 

derived data.39 This filing was 

submitted on September 30, 2021, over 

two years after the Staff’s Guidance was 

issued. In that filing, PHLX argued that 

the proposed fees were subject to 

competing products’ fees at other 

exchanges and that there were available 

substitutes. This filing provided no cost 

based data or revenue analysis to 

support the amount of the proposed 

fees. Among other things, PHLX did not 

provide a description of the costs 

underlying its market data feeds to show 

that these particular fees did not 

generate supra-competitive profits or 

describe how any potential profit may 

be offset by increased costs associated 

with another fee included in its 

proposal. This filing, nonetheless, was 

not suspended by the Commission and 

remains in effect today. 

The Exchange notes that the Investors 

Exchange, Inc. (‘‘IEX’’) recently 

submitted a proposed rule change to 

adopt fees for two real-time proprietary 

market data feeds, TOPS and DEEP 

(‘‘IEX Fee Proposal’’). Like the Exchange 

proposes herein, IEX previously 

provided its TOP and DEEP market data 

feeds for free and proposed to adopt 

modest, below market fees. Also like in 

this proposal, the IEX Fee Proposal 

included a detailed subscriber data and 

cost-based analysis in compliance with 

the Guidance. Nonetheless, on 

December 30, 2021, the Commission 

suspended the IEX Fee Proposal and 

instituted proceedings to determine 

whether to approve or disapprove the 

IEX Fee Proposal.40

The Commission received three 

comment letters on the IEX Order.41 The 

Virtu Letter and HMA Letter 2 

specifically applaud the amount of 

detail included in the IEX Fee Proposal. 

Specifically, the Virtu Letter states that 

‘‘[i]n significant detail, IEX provides 

data about three cost components: (1) 

Direct costs, such as servers, 

infrastructure, and monitoring; (2) 

enhancement initiative costs (e.g., new 

functionality for IEX Data and increased 

capacity for the proprietary market data 

feeds . . .); and (3) personnel costs.’ ’’ 42

HMA Letter 2 similarly commends the 

level of detail included in the IEX Fee 

Proposal and also highlights the 

disparate treatment by Commission Staff 

of exchange fee filings.43 HMA Letter 2 

provides three examples to support this 

assertion.44 The Nasdaq Letter urges the 

Commission to approve the IEX Fee 

Proposal promptly and raises concern 

the questions asked by the Commission 

in the IEX Order imply that they are 

exercising rate making authority that 

they clearly do not possess. The Nasdaq 

Letter states that ‘‘[i]f the Commission 

believes it has authority to conduct costplus ratemaking, the Administrative 

Procedure Act dictates that it must 

propose a rule for notice and comment 

and that its final rule must be prepared 

to withstand judicial scrutiny.’’ 45 The 

Exchange agrees. 

The Exchange believes exchanges, 

like all businesses, should be provided 

flexibility when allocating costs and 

resources they deem necessary to 

operate their business, including 

providing market data and access 

services. The Exchange notes that costs 

and resource allocations may vary from 

business to business and, likewise, costs 

and resource allocations may differ from 

exchange to exchange when it comes to 

providing market data and access 

services. It is a business decision that 

must be evaluated by each exchange as 

to how to allocate internal resources and 

what costs to incur internally or via 

third parties that it may deem necessary 

to support its business and its provision 

of market data and access services to 

market participants. An exchange’s 


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46See Securities Exchange Act Release Nos. 

79405 (November 28, 2016), 81 FR 87086 

(December 2, 2016) (SR–MIAX–2016–44) 

(amendment to clarify the manner in which the 

System allocates contracts at the end of a Complex 

Auction); 80089 (February 22, 2017), 82 FR 12153 

(February 28, 2017) (SR–MIAX–2017–06) (adopting 

the Complex MIAX Options Price Collar, an 

additional price protection feature); 81229 (July 27, 

2017), 82 FR 36023 (August 2, 2017) (SR–MIAX– 

2017–34) (amendment to ensure price and trade 

protections apply to Complex Orders); 89085 (June 

17, 2020), 85 FR 37719 (June 23, 2020) (SR–MIAX– 

2020–16) (adopting new order type, Complex 

Attributable Order). 

47See ‘‘Supply chain chaos is already hitting 

global growth. And it’s about to get worse’’, by 

Holly Ellyatt, CNBC, available at https://

www.cnbc.com/2021/10/18/supply-chain-chaos-ishitting-global-growth-and-could-get-worse.html 

(October 18, 2021); and ‘‘There will be things that 

people can’t get, at Christmas, White House warns’’ 

by Jarrett Renshaw and Trevor Hunnicutt, Reuters, 

available at https://www.reuters.com/world/us/ 

americans-may-not-get-some-christmas-treatswhite-house-officials-warn-2021-10-12/ (October 12, 

2021). 

48For example, on October 20, 2021, ICE Data 

Services announced a 3.5% price increase effective 

January 1, 2022 for most services. The price 

increase by ICE Data Services includes their Secure 

Financial Transaction Infrastructure (‘‘SFTI’’) 

network, which is relied on by a majority of market 

participants, including the Exchange. See email 

from ICE Data Services to the Exchange, dated 

October 20, 2021. The Exchange further notes that 

on October 22, 2019, the Exchange was notified by 

ICE Data Services that it was raising its fees charged 

to the Exchange by approximately 11% for the SFTI 

network. 

costs may also vary based on fees 

charged by third parties and periodic 

increases to those fees that may be 

outside of the control of an exchange. 

To determine the Exchange’s 

projected revenue associated with the 

proposed fees in the instant filing, the 

Exchange analyzed the number of 

Members and non-Members currently 

subscribing to the cToM data feeds and 

used a recent monthly billing cycle 

representative of 2021 monthly revenue. 

The Exchange also provided its baseline 

by analyzing June 2021, the monthly 

billing cycle prior to the proposed fees 

going into effect, and compared it to its 

expenses for that month. As discussed 

below, the Exchange does not believe it 

is appropriate to factor into its analysis 

projected or estimated future revenue 

growth or decline for purposes of these 

calculations, given the uncertainty of 

such projections due to the continually 

changing market data needs of market 

participants and potential increase in 

internal and third party expenses. The 

Exchange is presenting its revenue and 

expense associated with the proposed 

fees in this filing in a manner that is 

consistent with how the Exchange 

presents its revenue and expense in its 

Audited Unconsolidated Financial 

Statements. The Exchange’s most recent 

Audited Unconsolidated Financial 

Statement is for 2020. However, since 

the revenue and expense associated 

with the proposed fees were not in place 

in 2020 or for the first six months of 

2021, the Exchange believes its 2020 

Audited Unconsolidated Financial 

Statement is not representative of its 

current total annualized revenue and 

costs associated with the proposed fees. 

Accordingly, the Exchange believes it is 

more appropriate to analyze the 

proposed fees utilizing its 2021 revenue 

and costs, as described herein, which 

utilize the same presentation 

methodology as set forth in the 

Exchange’s previously-issued Audited 

Unconsolidated Financial Statements. 

Based on this analysis, the Exchange 

believes that the proposed fees are 

reasonable because they will allow the 

Exchange to recover its costs associated 

with providing services related to the 

proposed fees and not result in 

excessive pricing or supra-competitive 

profit. Since 2019, when the Exchange 

launched operations with Complex 

Order functionality, the Exchange has 

spent time and resources building out 

various Complex Order functionality in 

its System to provide better trading 

strategies and risk functionality for 

market participants in order to better 

compete with other exchanges’ complex 

functionality and similar data products 

focused on complex orders.46 The cToM 

data product allows market participants 

to better utilize the Exchange’s Complex 

Order functionality by providing 

insights into the Exchange’s Complex 

Order flow. The Exchange notes that no 

market participant ceased subscribing to 

the cToM feed since July 1, 2021, the 

date on which the fees became effective 

pursuant to the First Proposed Rule 

Change. 

As outlined in more detail below, the 

Exchange projects that the final 

annualized expense for 2021 to provide 

cToM data to be $202,657 per annum or 

an average of $16,888 per month. The 

Exchange implemented the proposed 

fees on July 1, 2021 in the First 

Proposed Rule Change. For June 2021, 

prior to the proposed fees, Exchange 

Members and non-Members subscribed 

to a total of 14 cToM data feeds for 

which the Exchange charged $0, as it 

has for the past three years. This 

resulted in a loss of approximately 

$16,888 for that month. For the month 

of November 2021, which includes the 

proposed fees, Exchange Members and 

non-Members purchased 14 cToM data 

feeds, for which the Exchange charged 

approximately $17,500 for that month. 

This resulted in a profit of $612 for that 

month (a margin of approximately 

3.5%). The Exchange cautions that this 

margin is likely to fluctuate from month 

to month based on the uncertainty of 

predicting how many cToM data feeds 

may be purchased from month to month 

as Members and non-Members are able 

to add and drop subscriptions at any 

time based on their own business 

decisions. This margin may also 

decrease due to the significant 

inflationary pressure on capital items 

that the Exchange needs to purchase to 

maintain the Exchange’s technology and 

systems.47 The Exchange has been 

subject to price increases upwards of 

30% during the past year on network 

equipment due to supply chain 

shortages. This, in turn, results in higher 

overall costs for ongoing system 

maintenance, but also to purchase the 

items necessary to ensure ongoing 

system resiliency, performance, and 

determinism. These costs are expected 

to continue to go up as the U.S. 

economy continues to struggle with 

supply chain and inflation related 

issues. 

Further, the Exchange chose to 

provide cToM data for free for the past 

three years to attract order flow and 

encourage market participants to 

experience the determinism and 

resiliency of the Exchange’s trading 

systems and market data products. This 

resulted in the Exchange forgoing 

revenue it could have generated from 

assessing any fees. The Exchange could 

have sought to charge fees at the outset 

for the cToM data feed, but that could 

have served to discourage participation 

on the Exchange. Instead, the Exchange 

chose to provide a free exchange data 

product to the options industry, which 

resulted in no revenues for providing 

this service for three years. The 

Exchange now proposes to amend its fee 

structure to enable it to continue to 

maintain and improve its overall market 

and systems while also providing a 

highly reliable and deterministic trading 

system to the marketplace, complete 

with robust market data products, 

including cToM. 

As mentioned above, the Exchange 

projects that the final annualized 

expense for 2021 to provide cToM data 

to be approximately $202,657 per 

annum or an average of $16,888 per 

month and that these costs are expected 

to increase not only due to anticipated 

significant inflationary pressure, but 

also periodic fee increases by third 

parties.48 The Exchange notes that there 

are material costs associated with 

providing the infrastructure and 

headcount to fully-support access to the 

Exchange and various Exchange 

products. The Exchange incurs 

technology expense related to 


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49The Exchange has incurred a cumulative loss 

of $22 million since its inception in 2019 to 2020, 

the last year for which the Exchange’s Form 1 data 

is available. See Exchange’s Form 1/A, Application 

for Registration or Exemption from Registration as 

a National Securities Exchange, filed July 28, 2021, 

available at https://sec.report/Document/ 

9999999997-21-004557/. 

50The Exchange has not yet finalized its 2021 

year end results. 

51The percentage allocations used in this 

proposed rule change may differ from past filings 

from the Exchange or its affiliates due to, among 

other things, changes in expenses charged by thirdparties, adjustments to internal resource allocations, 

and different system architecture of the Exchange 

as compared to its affiliates. 

52For example, the Exchange previously noted 

that all third-party expense described in its prior fee 

filing was contained in the information technology 

and communication costs line item under the 

section titled ‘‘Operating Expenses Incurred 

Directly or Allocated From Parent,’’ in the 

Exchange’s 2019 Form 1 Amendment containing its 

financial statements for 2018. See Securities 

Exchange Act Release No. 87877 (December 31, 

2019), 85 FR 738 (January 7, 2020) (SR–EMERALD– 

2019–39). Accordingly, the third-party expense 

described in this filing is attributed to the same line 

item for the Exchange’s 2021 Form 1 Amendment, 

which will be filed in 2022. 

establishing and maintaining 

Information Security services, enhanced 

network monitoring and customer 

reporting, as well as Regulation SCI 

mandated processes, associated with its 

network technology. While some of the 

expense is fixed, much of the expense 

is not fixed, and thus increases the cost 

to the Exchange to provide services 

associated with the proposed fees. For 

example, new Members to the Exchange 

may require the purchase of additional 

hardware to support those Members as 

well as enhanced monitoring and 

reporting of customer performance that 

the Exchange and its affiliates provide. 

Further, as the total number Members 

increases, the Exchange and its affiliates 

may need to increase their data center 

footprint and consume more power, 

resulting in increased costs charged by 

their third-party data center provider. 

Accordingly, the cost to the Exchange 

and its affiliates to provide services and 

products to its Members is not fixed and 

indeed is likely to increase rather than 

decrease over time. The Exchange 

believes the proposed fees are a 

reasonable attempt to offset a portion of 

the costs to the Exchange associated 

with providing certain Exchange 

products. 

The Exchange only has four primary 

sources of revenue and cost recovery 

mechanisms to fund all of its 

operations: Transaction fees, access fees, 

regulatory fees, and market data fees. 

Accordingly, the Exchange must cover 

all of its expenses from these four 

primary sources of revenue and cost 

recovery mechanisms. Until recently, 

the Exchange has operated at a 

cumulative net annual loss since it 

launched operations in 2019.49 This is 

a result of providing a low cost 

alternative to attract order flow and 

encourage market participants to 

experience the high determinism and 

resiliency of the Exchange’s trading 

Systems. To do so, the Exchange chose 

to waive the fees for some nontransaction related services and market 

data products or provide them at a very 

marginal cost, which has not been 

profitable to the Exchange, but 

beneficial to the overall options 

industry. This resulted in the Exchange 

forgoing revenue it could have 

generated from assessing any amount of 

fees. 

The Exchange believes that the 

proposed fees are fair and reasonable 

because they will not result in excessive 

pricing or supra-competitive profit, 

when comparing the total annual 

expense that the Exchange projects to 

incur in connection with providing 

these services versus the total annual 

revenue that the Exchange projects to 

collect in connection with services 

associated with the proposed fees. As 

mentioned above, for 2021,50 the total 

annual expense for providing the 

services associated with the proposed 

fees is projected to be approximately 

$202,657, or approximately $16,888 per 

month. This projected total annual 

expense is comprised of the following, 

all of which are directly related to the 

services associated with the proposed 

fees: (1) Third-party expense, relating to 

fees paid by the Exchange to thirdparties for certain products and services; 

and (2) internal expense, relating to the 

internal costs of the Exchange to 

provide the services associated with the 

proposed fees.51 As noted above, the 

Exchange believes it is more appropriate 

to analyze the proposed fees utilizing its 

2021 revenue and costs, which utilize 

the same presentation methodology as 

set forth in the Exchange’s previouslyissued Audited Unconsolidated 

Financial Statements.52 The $202,657 

projected total annual expense is 

directly related to the services 

associated with the proposed fees, and 

not any other product or service offered 

by the Exchange. It does not include 

general costs of operating matching 

engines and other trading technology. 

No expense amount was allocated twice. 

As discussed above, the Exchange 

conducted an extensive cost review in 

which the Exchange analyzed nearly 

every expense item in the Exchange’s 

general expense ledger (this includes 

over 150 separate and distinct expense 

items) to determine whether each such 

expense relates to the services 

associated with the proposed fees, and, 

if such expense did so relate, what 

portion (or percentage) of such expense 

actually supports those services, and 

thus bears a relationship that is, ‘‘in 

nature and closeness,’’ directly related 

to those services. In performing this 

calculation, the Exchange considered 

other services and to which the expense 

may be applied and how much of the 

expense is directly or indirectly utilized 

in providing those other services. The 

sum of all such portions of expenses 

represents the total cost of the Exchange 

to provide services associated with the 

proposed fees. 

External Expense Allocations 

For 2021, total third-party expense, 

relating to fees paid by the Exchange to 

third-parties for certain products and 

services for the Exchange to be able to 

provide the services associated with the 

proposed fees, is projected to be $4,160. 

This includes, but is not limited to, a 

portion of the fees paid to: (1) Equinix, 

for data center services, for the primary, 

secondary, and disaster recovery 

locations of the Exchange’s trading 

system infrastructure; (2) Zayo Group 

Holdings, Inc. (‘‘Zayo’’) for network 

services (fiber and bandwidth products 

and services) linking the Exchange’s 

office locations in Princeton, New Jersey 

and Miami, Florida, to all data center 

locations; and (3) various other 

hardware and software providers 

(including Dell and Cisco, which 

support the production environment in 

which Members connect to the network 

to trade, receive market data, etc.). 

For clarity, the Exchange took a 

conservative approach in determining 

the expense and the percentage of that 

expense to be allocated to providing the 

services associated with the proposed 

fees. Only a portion of all fees paid to 

such third-parties is included in the 

third-party expense described herein, 

and no expense amount is allocated 

twice. Accordingly, the Exchange does 

not allocate its entire information 

technology and communication costs to 

the services associated with the 

proposed fees. Further, the Exchange 

notes that, with respect to the expenses 

included herein, those expenses only 

cover the MIAX market; expenses 

associated with MIAX Pearl for its 

options and equities markets and MIAX, 

are accounted for separately and are not 

included within the scope of this filing. 

As noted above, the percentage 

allocations used in this proposed rule 

change may differ from past filings from 

the Exchange or its affiliates due to, 

among other things, changes in 

expenses charged by third-parties, 


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53As noted above, the percentage allocations used 

in this proposed rule change may differ from past 

filings from the Exchange or its affiliates due to, 

among other things, changes in expenses charged by 

third-parties, adjustments to internal resource 

allocations, and different system architecture of the 

Exchange as compared to its affiliates. Again, as 

part its ongoing assessment of costs and expenses, 

the Exchange recently conducted a periodic 

thorough review of its expenses and resource 

allocations which, in turn, resulted in a revised 

percentage allocations in this filing. 54 Id. 55 Id. 

adjustments to internal resource 

allocations, and different system 

architecture of the Exchange as 

compared to its affiliates. Further, as 

part its ongoing assessment of costs and 

expenses, the Exchange recently 

conducted a periodic thorough review 

of its expenses and resource allocations, 

which, in turn, resulted in a revised 

percentage allocations in this filing. 

The Exchange believes it is reasonable 

to allocate such third-party expense 

described above towards the total cost to 

the Exchange to provide the services 

associated with the proposed fees. In 

particular, the Exchange believes it is 

reasonable to allocate the identified 

portion of the Equinix expense because 

Equinix operates the data centers 

(primary, secondary, and disaster 

recovery) that host the Exchange’s 

network infrastructure. This includes, 

among other things, the necessary 

storage space, which continues to 

expand and increase in cost, power to 

operate the network infrastructure, and 

cooling apparatuses to ensure the 

Exchange’s network infrastructure 

maintains stability. Without these 

services from Equinix, the Exchange 

would not be able to operate and 

support the network and provide the 

cToM product associated with the 

proposed fees to its Members, nonMembers and their customers. The 

Exchange did not allocate all of the 

Equinix expense toward the cost of 

providing the cToM product associated 

with the proposed fees, only that 

portion which the Exchange identified 

as being specifically mapped to 

providing the cToM product associated 

with the proposed fees. According to the 

Exchange’s calculations, it allocated 

approximately 0.20% of the total 

applicable Equinix expense to providing 

the services associated with the 

proposed fees. The Exchange believes 

this allocation is reasonable because it 

represents the Exchange’s actual cost to 

provide the cToM product associated 

with the proposed fees, and not any 

other service, as supported by its cost 

review.53

The Exchange believes it is reasonable 

to allocate the identified portion of the 

Zayo expense because Zayo provides 

the internet, fiber and bandwidth 

connections with respect to the 

network, linking the Exchange with its 

affiliates, MIAX Pearl and MIAX, as 

well as the data center and disaster 

recovery locations. As such, all of the 

trade data, including the billions of 

messages each day per exchange, flow 

through Zayo’s infrastructure over the 

Exchange’s network. Without these 

services from Zayo, the Exchange would 

not be able to operate and support the 

network and provide the cToM data 

associated with the proposed fees. The 

Exchange did not allocate all of the 

Zayo expense toward the cost of 

providing the cToM data associated 

with the proposed fees, only the portion 

which the Exchange identified as being 

specifically mapped to providing the 

cToM data associated with the proposed 

fees. According to the Exchange’s 

calculations, it allocated approximately 

0.20% of the total applicable Zayo 

expense to providing the services 

associated with the proposed fees. The 

Exchange believes this allocation is 

reasonable because it represents the 

Exchange’s actual cost to provide the 

cToM data associated with the proposed 

fees, and not any other service, as 

supported by its cost review.54

The Exchange did not allocate any 

expense associated with the proposed 

fees towards SFTI and various other 

service providers’ (including Thompson 

Reuters, NYSE, Nasdaq, and Internap) 

because the MIAX Emerald architecture 

takes advantage of an advance in design 

to eliminate the need for a market data 

distribution gateway layer. The 

computation and dissemination via an 

API is done solely within the match 

engine environment and is then 

delivered via the Member and nonMember connectivity infrastructure. 

This architecture delivers a market data 

system that is more efficient both in cost 

and performance. Accordingly, the 

Exchange determined not to allocate any 

expense associated with SFTI and 

various other service providers. 

The Exchange believes it is reasonable 

to allocate the identified portion of the 

other hardware and software provider 

expense because this includes costs for 

dedicated hardware licenses for 

switches and servers, as well as 

dedicated software licenses for security 

monitoring and reporting across the 

network. Without this hardware and 

software, the Exchange would not be 

able to operate and support the network 

and provide cToM data to its Members, 

non-Members and their customers. The 

Exchange did not allocate all of the 

hardware and software provider 

expense toward the cost of providing 

the cToM data associated with the 

proposed fees, only the portions which 

the Exchange identified as being 

specifically mapped to providing the 

cToM data associated with the proposed 

fees. According to the Exchange’s 

calculations, it allocated approximately 

0.20% of the total applicable hardware 

and software provider expense to 

providing the services associated with 

the proposed fees. The Exchange 

believes this allocation is reasonable 

because it represents the Exchange’s 

actual cost to provide the cToM data 

associated with the proposed fees.55

Internal Expense Allocations 

For 2021, total projected internal 

expenses relating to the Exchange 

providing the cToM data associated 

with the proposed fees, is projected to 

be $198,497. This includes, but is not 

limited to, costs associated with: (1) 

Employee compensation and benefits 

for full-time employees that support the 

cToM data product associated with the 

proposed fees, including staff in 

network operations, trading operations, 

development, system operations, and 

business that support those employees 

and functions; (2) depreciation and 

amortization of hardware and software 

used to provide the cToM data product 

associated with the proposed fees, 

including equipment, servers, cabling, 

purchased software and internally 

developed software used in the 

production environment to support the 

network for trading; and (3) occupancy 

costs for leased office space for staff that 

provide the cToM data associated with 

the proposed fees. The breakdown of 

these costs is more fully-described 

below. 

For clarity, and as stated above, the 

Exchange took a conservative approach 

in determining the expense and the 

percentage of that expense to be 

allocated to providing services in 

connection with the proposed fees. Only 

a portion of all such internal expenses 

are included in the internal expense 

herein, and no expense amount is 

allocated twice. Accordingly, the 

Exchange does not allocate its entire 

costs contained in those items to the 

cToM data associated with the proposed 

fees. This may result in the Exchange 

under allocating an expense to the 

provision of access services in 

connection with the proposed fees and 

such expenses may actually be higher or 

increase above what the Exchange 

utilizes within this proposal. Further, as 

part its ongoing assessment of costs and 

expenses (described above), the 

Exchange recently conducted a periodic 


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56 Id. 57 Id. 58 Id. 

thorough review of its expenses and 

resource allocations which, in turn, 

resulted in a revised percentage 

allocations in this filing. 

The Exchange believes it is reasonable 

to allocate such internal expense 

described above towards the total cost to 

the Exchange to provide the cToM data 

associated with the proposed fees. In 

particular, the Exchange’s employee 

compensation and benefits expense 

relating to providing the cToM data 

associated with the proposed fees is 

projected to be approximately $185,002, 

which is only a portion of the $9.74 

million total projected expense for 

employee compensation and benefits. 

The Exchange believes it is reasonable 

to allocate the identified portion of such 

expense because this includes the time 

spent by employees of several 

departments, including Technology, 

Back Office, Systems Operations, 

Networking, Business Strategy 

Development (who create the business 

requirement documents that the 

Technology staff use to develop network 

features, products and enhancements), 

and Trade Operations. As part of the 

extensive cost review conducted by the 

Exchange, the Exchange reviewed the 

amount of time spent by nearly every 

employee on matters relating to cToM. 

Without these employees, the Exchange 

would not be able to provide the cToM 

product to its Members, non-Members 

and their customers. The Exchange did 

not allocate all of the employee 

compensation and benefits expense 

toward the cost of the cToM product, 

only the portion which the Exchange 

identified as being specifically mapped 

to providing the cToM product 

associated with the proposed fees. 

According to the Exchange’s 

calculations, it allocated approximately 

2.0% of the total applicable employee 

compensation and benefits expense to 

providing the services associated with 

the proposed fees. The Exchange 

believes this allocation is reasonable 

because it represents the Exchange’s 

actual cost to provide the cToM data 

associated with the proposed fees, and 

not any other service, as supported by 

its cost review.56

The Exchange’s depreciation and 

amortization expense relating to 

providing the cToM data associated 

with the proposed fees is projected to be 

$3,635, which is only a portion of the 

$1.9 million total projected expense for 

depreciation and amortization. The 

Exchange believes it is reasonable to 

allocate the identified portion of such 

expense because such expense includes 

the actual cost of the computer 

equipment, such as dedicated servers, 

computers, laptops, monitors, 

information security appliances and 

storage, and network switching 

infrastructure equipment, including 

switches and taps that were purchased 

to operate and support the network and 

provide the cToM product. Without this 

equipment, the Exchange would not be 

able to operate the network and provide 

the cToM product to its Members, nonMembers and their customers. The 

Exchange did not allocate all of the 

depreciation and amortization expense 

toward the cost of providing the cToM 

product, only the portion which the 

Exchange identified as being 

specifically mapped to providing the 

cToM product. According to the 

Exchange’s calculations, it allocated 

approximately 0.20% of the total 

applicable depreciation and 

amortization expense to providing the 

services associated with the proposed 

fees, as this product would not be 

possible without relying on such. The 

Exchange believes this allocation is 

reasonable because it represents the 

Exchange’s actual cost to provide the 

cToM product associated with the 

proposed fees, and not any other 

service, as supported by its cost 

review.57

The Exchange’s occupancy expense 

relating to providing the cToM product 

associated with the proposed fees is 

projected to be $9,860, which is only a 

portion of the $0.60 million total 

projected expense for occupancy. The 

Exchange believes it is reasonable to 

allocate the identified portion of such 

expense because such expense 

represents the portion of the Exchange’s 

cost to rent and maintain a physical 

location for the Exchange’s staff who 

operate and support the network, 

including providing the cToM product. 

This amount consists primarily of rent 

for the Exchange’s Princeton, New 

Jersey office, as well as various related 

costs, such as physical security, 

property management fees, property 

taxes, and utilities. The Exchange 

operates its Network Operations Center 

(‘‘NOC’’) and Security Operations 

Center (‘‘SOC’’) from its Princeton, New 

Jersey office location. A centralized 

office space is required to house the 

staff that operates and supports the 

network and Exchange products. The 

Exchange currently has approximately 

200 employees. Approximately twothirds of the Exchange’s staff are in the 

Technology department, and the 

majority of those staff have some role in 

the operation and performance of the 

services associated with the proposed 

fees. Accordingly, the Exchange believes 

it is reasonable to allocate the identified 

portion of its occupancy expense 

because such amount represents the 

Exchange’s actual cost to house the 

equipment and personnel who operate 

and support the Exchange’s network 

infrastructure and the market data 

services associated with the proposed 

fees. The Exchange did not allocate all 

of the occupancy expense toward the 

cost of providing the market data 

services associated with the proposed 

fees, only the portion which the 

Exchange identified as being 

specifically mapped to operating and 

supporting the network. According to 

the Exchange’s calculations, it allocated 

approximately 2.0% of the total 

applicable occupancy expense to 

providing the services associated with 

the proposed fees. The Exchange 

believes this allocation is reasonable 

because it represents the Exchange’s 

cost to provide the market data services 

associated with the proposed fees, and 

not any other service, as supported by 

its cost review.58

Based on the above, the Exchange 

believes that its provision of market data 

services associated with the proposed 

fees will not result in excessive pricing 

or supra-competitive profit. As 

discussed above, the Exchange projects 

that its annualized expense for 2021 to 

provide the cToM data associated with 

the proposed fees is projected to be 

approximately $202,657, or 

approximately $16,888 per month on 

average. The Exchange implemented the 

proposed fees on July 1, 2021 in the 

First Proposed Rule Change. For June 

2021, prior to the proposed fees, 

Members and non-Members subscribed 

to a total of 14 cToM data feeds, for 

which the Exchange charged $0, for the 

past three years. This resulted in a 

month over month loss of $16,888. For 

the month of November 2021, which 

includes the proposed fees, Members 

and non-Members subscribed to 14 

cToM data feeds, for which the 

Exchange charged approximately 

$17,500 for that month. This resulted in 

a profit of $612 for that month (a margin 

of approximately 3.5%). The Exchange 

believes this margin will allow it to 

begin to recoup its expenses and 

continue to invest in its technology 

infrastructure. Therefore, the Exchange 

also believes that this proposed margin 

is reasonable because it represents a 

reasonable rate of return. 

Again, the Exchange cautions that this 

margin is likely to fluctuate from month 

to month based in the uncertainty of 

predicting how many market data feeds 


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59The term ‘‘Priority Customer’’ means a person 

or entity that (i) is not a broker or dealer in 

securities and (ii) does not place more than 390 

orders in listed options per day on average during 

a calendar month for its own beneficial accounts(s). 

The term ‘‘Priority Customer Order’’ means an order 

for the account of a Priority Customer. See 

Exchange Rule 100. 

60The ‘‘Simple Order Book’’ is the Exchange’s 

regular electronic book of orders and quotes. See 

Exchange Rule 518(a)(5). 

61See supra notes 20, 21 and 22. 

62See supra note 47. 

63See supra note 15. 

may be purchased from month to month 

as Members and non-Members are free 

to add and drop subscriptions at any 

time based on their own business 

decisions. Notwithstanding that the 

revenue (and profit margin) may vary 

from month to month due to changes in 

subscriptions and to changes to the 

Exchange’s expenses, the number of 

subscriptions has not materially 

changed over previous months. 

Consequently, the Exchange believes 

that the months it has used as a baseline 

to perform its assessment are 

representative of reasonably anticipated 

costs and expenses. This margin may 

also decrease due to the significant 

inflationary pressure on capital items 

that it needs to purchase to maintain the 

Exchange’s technology and systems. 

Accordingly, the Exchange believes its 

total projected revenue for the providing 

the market data services associated with 

the proposed fees will not result in 

excessive pricing or supra-competitive 

profit. 

The Exchange believes that 

conducting the above analysis on a per 

month basis is reasonable as the revenue 

generated from access services subject to 

the proposed fee generally remains 

static from month to month. The 

Exchange also conducted the above 

analysis on a per month basis to comply 

with the Guidance which requires a 

baseline analysis to assist in 

determining whether the proposal 

generates a supra-competitive profit. 

This monthly analysis was also 

provided in response to comment 

received on prior submissions of this 

proposed rule change. 

The Exchange reiterates that it only 

has four primary sources of revenue and 

cost recovery mechanisms: Transaction 

fees, access fees, regulatory fees, and 

market data fees. Accordingly, the 

Exchange must cover all of its expenses 

from these four primary sources of 

revenue and cost recovery mechanisms. 

As a result, each of these fees cannot be 

‘‘flat’’ and cover only the expenses 

directly related to the fee that is 

charged. The above revenue and 

associated profit margin therefore are 

not solely intended to cover the costs 

associated with providing services 

subject to the proposed fees. Moreover, 

as noted above, because the Exchange 

was previously offering the cToM data 

feed at no cost, the provision of the feed 

during the time in which it generated no 

revenue was being subsidized by other 

fees charged by the Exchange. The 

Exchange believes establishing a 

separate fee for the cToM feed is 

therefore reasonable and equitable so 

that the provision of the cToM data feed 

is no longer subsidized by other fees 

less directly related to providing cToM. 

Instead, the cToM feed will be 

supported primarily through fees 

charged only to users who choose to 

subscribe to cToM. 

The Exchange believes it is 

reasonable, equitable and not unfairly 

discriminatory to allocate the respective 

percentages of each expense category 

described above towards the total cost to 

the Exchange of operating and 

supporting the network, including 

providing the market data services 

associated with the proposed fees 

because the Exchange performed a lineby-line item analysis of nearly every 

expense of the Exchange, and has 

determined the expenses that directly 

relate to providing market data services 

to the Exchange. Further, the Exchange 

notes that, without the specific thirdparty and internal expense items listed 

above, the Exchange would not be able 

to provide the market data services 

associated with the proposed fees to its 

Members, non-Members and their 

customers. Each of these expense items, 

including physical hardware, software, 

employee compensation and benefits, 

occupancy costs, and the depreciation 

and amortization of equipment, have 

been identified through a line-by-line 

item analysis to be integral to providing 

market data services. The proposed fees 

are intended to recover the costs of 

providing cToM data. Accordingly, the 

Exchange believes that the proposed 

fees are fair and reasonable because they 

do not result in excessive pricing or 

supra-competitive profit, when 

comparing the actual costs to the 

Exchange versus the projected annual 

revenue from the proposed fees. 

No market participant is required by 

any rule or regulation to utilize the 

Exchange’s Complex Order functionality 

or subscribe to the cToM data feed. 

Further, unlike orders on the Exchange’s 

Simple Order Book, Complex Orders are 

not protected and will never trade 

through Priority Customer 59 orders, 

thus protecting the priority that is 

established in the Simple Order Book.60

Additionally, unlike the continuous 

quoting requirements of Market Makers 

in the simple order market, there are no 

continuous quoting requirements 

respecting Complex Orders. It is a 

business decision whether market 

participants utilize Complex Order 

strategies on the Exchange and whether 

to purchase cToM data to help effect 

those strategies. 

The Proposed Fees Are Reasonable 

When Compared to the Fees of Other 

Options Exchanges With Similar Market 

Share 

The Exchange does not have visibility 

into other options exchanges’ costs to 

provide market data or their fee markup 

over those costs, and therefore cannot 

use other exchange’s market data fees as 

a benchmark to determine a reasonable 

markup over the costs of providing 

market data. Nevertheless, the Exchange 

believes the other exchanges’ market 

data fees are useful examples of 

alternative approaches to providing and 

charging for market data. To that end, 

the Exchange believes the proposed 

pricing is reasonable because the 

proposed rates are similar to or less than 

the fees charged by other options 

exchanges for similar data products.61

Until recently, the Exchange has 

operated at a cumulative net annual loss 

since it launched operations in 2019.62

This is a result of providing a low cost 

alternative to attract order flow and 

encourage market participants to 

experience the high determinism and 

resiliency of the Exchange’s trading 

Systems. To do so, the Exchange chose 

to waive the fees for some nontransaction related services and 

Exchange products (including the cToM 

data feed) or provide them at a very 

marginal cost, which was not profitable 

to the Exchange. This resulted in the 

Exchange forgoing revenue it could have 

generated from assessing any fees or 

higher fees. The Exchange could have 

sought to charge higher fees at the 

outset, but that could have served to 

discourage participation on the 

Exchange. Instead, the Exchange chose 

to provide a low cost exchange 

alternative to the options industry 

which resulted in lower initial 

revenues. An example of this is cToM, 

for which the Exchange only now seeks 

to adopt fees at a level similar to or 

lower than those of other options 

exchanges. 

Since the Exchange initially 

established the cToM data product 

when it launched trading operations on 

March 1, 2019, all Exchange Members 

and non-Members have had the ability 

to receive the Exchange’s cToM data 

free of charge for the past three years.63

Since 2019, when the Exchange 

launched operations with Complex 


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64See Securities Exchange Act Release Nos. 

85345 (March 18, 2019), 84 FR 10848 (March 22, 

2019) (SR–EMERALD–2019–13) (adopting complex 

stock-option order functionality); 85346 (March 18, 

2019), 84 FR 10854 (March 22, 2019) (SR– 

EMERALD–2019–14) (adopting additional price 

protection during a Complex Auction and the 

Complex Liquidity Exposure Process to provide 

additional price discovery). 

65See Exchange Data Agreement, available at 

https://miaxweb2.pairsite.com/sites/default/files/ 

page-files/MIAX_Exchange_Group_Data_

Agreement_09032020.pdf. 

66See id. 

67See id. 

68See supra note 47. 

69See supra note 15. 

Order functionality, the Exchange has 

spent time and resources building out 

various Complex Order functionality in 

its System to provide better trading 

strategies and risk functionality for 

market participants in order to better 

compete with other exchanges’ complex 

functionality and similar data products 

focused on complex orders.64 The cToM 

data product allows market participants 

to better utilize the Exchange’s Complex 

Order functionality by providing 

insights into the Exchange’s Complex 

Order flow. The Exchange currently has 

14 subscribers (12 Members and 2 nonMembers) for its cToM data product. 

None of these subscribers has paid a 

specific fee to receive cToM data (other 

than the five months in which the First, 

Second and Third Proposed Rule 

Changes were in effect) but has received 

the benefit of the Exchange building out 

its Complex Order functionality to 

better compete with other exchanges 

complex functionality. The Exchange 

notes that no market participant ceased 

subscribing to the cToM feed since July 

1, 2021, the date on which the fees 

became effective when established in 

the First Proposed Rule Change. 

The Proposed Pricing Is Not Unfairly 

Discriminatory and Provides for the 

Equitable Allocation of Fees, Dues, and 

Other Charges 

The Exchange believes that it is 

reasonable, equitable and not unfairly 

discriminatory to assess Internal 

Distributors fees that are less than the 

fees assessed for External Distributors 

for subscriptions to the cToM data feed 

because Internal Distributors have 

limited, restricted usage rights to the 

market data, as compared to External 

Distributors, which have more 

expansive usage rights. All Members 

and non-Members that determine to 

receive any market data feed of the 

Exchange (or its affiliates, MIAX Pearl 

and MIAX), must first execute, among 

other things, the MIAX Exchange Group 

Exchange Data Agreement (the 

‘‘Exchange Data Agreement’’).65

Pursuant to the Exchange Data 

Agreement, Internal Distributors are 

restricted to the ‘‘internal use’’ of any 

market data they receive. This means 

that Internal Distributors may only 

distribute the Exchange’s market data to 

the recipient’s officers and employees 

and its affiliates.66 External Distributors 

may distribute the Exchange’s market 

data to persons who are not officers, 

employees or affiliates of the External 

Distributor,67 and may charge their own 

fees for the redistribution of such 

market data. Accordingly, the Exchange 

believes it is fair, reasonable and not 

unfairly discriminatory to assess 

External Distributors a higher fee for the 

Exchange’s market data products as 

External Distributors have greater usage 

rights to commercialize such market 

data and can adjust their own fee 

structures if necessary. The Exchange 

also utilizes more resources to support 

External Distributors versus Internal 

Distributors, as External Distributors 

have reporting and monitoring 

obligations that Internal Distributors do 

not have, thus requiring additional time 

and effort of Exchange staff. The 

Exchange believes the proposed cToM 

fees are equitable and not unfairly 

discriminatory because the fee level 

results in a reasonable and equitable 

allocation of fees amongst subscribers 

for similar services, depending on 

whether the subscriber is an Internal or 

External Distributor. Moreover, the 

decision as to whether or not to 

purchase market data is entirely 

optional to all market participants. 

Potential purchasers are not required to 

purchase the market data, and the 

Exchange is not required to make the 

market data available. Purchasers may 

request the data at any time or may 

decline to purchase such data. The 

allocation of fees among users is fair and 

reasonable because, if market 

participants determine not to subscribe 

to the data feed, firms can discontinue 

their use of the cToM data. 

Further, the Exchange believes that 

the proposal is equitable and not 

unfairly discriminatory because the 

proposed cToM fees will apply to all 

market participants of the Exchange on 

a uniform basis. The Exchange also 

notes that the proposed monthly cToM 

fees for Internal and External 

Distributors are the same prices that the 

Exchange charges for its ToM data 

product. 

The Exchange believes the proposed 

change to delete certain text from 

Section (6)(a) of the Fee Schedule 

promotes just and equitable principles 

of trade and removes impediments to 

and perfects the mechanism of a free 

and open market and a national market 

system because the proposed change is 

a non-substantive edit to the Fee 

Schedule to remove unnecessary text. 

The Exchange believes that this 

proposed change will provide greater 

clarity to Members and the public 

regarding the Exchange’s Fee Schedule 

and that it is in the public interest for 

the Fee Schedule to be accurate and 

concise so as to eliminate the potential 

for confusion. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intra-Market Competition 

The Exchange believes the proposed 

fees 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 

proposed fees will allow the Exchange 

to recoup some of its costs in providing 

cToM to market participants. As 

described above, the Exchange has 

operated at a cumulative net annual loss 

since it launched operations in 2019 68

due to providing a low cost alternative 

to attract order flow and encourage 

market participants to experience the 

high determinism and resiliency of the 

Exchange’s trading Systems. To do so, 

the Exchange chose to waive the fees for 

some non-transaction related services 

and Exchange products or provide them 

at a very marginal cost, which was not 

profitable to the Exchange. This resulted 

in the Exchange forgoing revenue it 

could have generated from assessing any 

fees or higher fees. The Exchange could 

have sought to charge higher fees at the 

outset, but that could have served to 

discourage participation on the 

Exchange. Instead, the Exchange chose 

to provide a low cost exchange 

alternative to the options industry 

which resulted in lower initial 

revenues. An example of this is cToM, 

for which the Exchange only now seeks 

to adopt fees at a level similar to or 

lower than those of other options 

exchanges. 

Since the Exchange initially launched 

operations with the cToM data product 

in 2019, all Exchange Members and 

non-Members have had the ability to 

receive the Exchange’s cToM data free 

of charge for the past three years.69

Since 2019, when the Exchange adopted 

Complex Order functionality, the 

Exchange has spent time and resources 

building out various Complex Order 


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70See supra note 62. 

71 15 U.S.C. 78s(b)(3)(C). 

72 15 U.S.C. 78s(b)(1). 

73See supra note 5, and accompanying text. 

74See Securities Exchange Act Release No. 92789, 

86 FR 49364 (September 2, 2021) (‘‘OIP’’). 

75See Securities Exchange Act Release No. 93471 

(October 29, 2021), 86 FR 60947 (November 4, 

2021). 

76See Securities Exchange Act Release Nos. 

93427 (October 26, 2021), 86 FR 60310 (November 

1, 2021); 93811 (December 17, 2021), 86 FR 73051 

(December 23, 2021). 

77See OIP, supra note 74. 

78See 17 CFR 240.19b–4 (Item 3 entitled ‘‘SelfRegulatory Organization’s Statement of the Purpose 

of, and Statutory Basis for, the Proposed Rule 

Change’’). 

79 Id. 

80 15 U.S.C. 78f(b)(4). 

81 15 U.S.C. 78f(b)(5). 

82 15 U.S.C. 78f(b)(8). 

functionality in its System to provide 

better trading strategies and risk 

functionality for market participants in 

order to better compete with other 

exchanges’ complex functionality and 

similar data products focused on 

complex orders.70 The Exchange now 

seeks to recoup its costs for providing 

cToM to market participants and 

believes the proposed fees will not 

result in excessive pricing or supracompetitive profit. 

Inter-Market Competition 

The Exchange also does not believe 

the proposed fees would cause any 

unnecessary or in appropriate burden 

on intermarket competition as other 

exchanges are free to introduce their 

own comparable data product and lower 

their prices to better compete with the 

Exchange’s offering. The Exchange does 

not believe the proposed rule change 

would cause any unnecessary or 

inappropriate burden on inter-market 

competition. Particularly, the proposed 

product and fees apply uniformly to any 

purchaser, in that it does not 

differentiate between subscribers that 

purchase cToM. The proposed fees are 

set at a modest level that would allow 

any interested Member or non-Member 

to purchase such data based on their 

business needs. 

The Exchange does not believe that 

the proposed rule change to make a 

minor, non-substantive edit to Section 

(6)(a) of the Fee Schedule by deleting 

unnecessary text will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. This 

proposed rule change is not being made 

for competitive reasons, but rather is 

designed to remedy a minor nonsubstantive issue and will provide 

added clarity to the Fee Schedule. The 

Exchange believes that it is in the public 

interest for the Fee Schedule to be 

accurate and concise so as to eliminate 

the potential for confusion on the part 

of market participants. In addition, the 

Exchange does not believe the proposal 

will impose any burden on inter-market 

competition as the proposal does not 

address any competitive issues and is 

intended to protect investors by 

providing further transparency 

regarding the Exchange’s Fee Schedule. 

Regrettably, the Exchange believes 

that the application of the Guidance to 

date has adversely affected inter-market 

competition by impeding the ability of 

smaller, low cost exchanges to adopt or 

increase fees for their market data and 

access services (including connectivity 

and port products and services). Since 

the adoption of the Guidance, and even 

more so recently, it has become harder, 

particularly for smaller, low cost 

exchanges, to adopt or increase fees to 

generate revenue necessary to invest in 

systems, provide innovative trading 

products and solutions, and improve 

competitive standing to the benefit of 

the affected exchanges’ market 

participants. Although the Guidance has 

served an important policy goal of 

improving disclosures in proposed rule 

changes and requiring exchanges to 

more clearly justify that their market 

data and access fee proposals are fair 

and reasonable, it has also been 

inconsistently applied and therefore 

negatively impacted exchanges, and 

particularly many smaller, low cost 

exchanges, that seek to adopt or increase 

fees despite providing enhanced 

disclosures and rationale to support 

their proposed fee changes. 

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. Suspension of the Proposed Rule 

Change 

Pursuant to Section 19(b)(3)(C) of the 

Act,71 at any time within 60 days of the 

date of filing of a proposed rule change 

pursuant to Section 19(b)(1) of the 

Act,72 the Commission summarily may 

temporarily suspend the change in the 

rules of a self-regulatory organization 

(‘‘SRO’’) 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. As discussed below, the 

Commission believes a temporary 

suspension of the proposed rule change 

is necessary and appropriate to allow for 

additional analysis of the proposed rule 

change’s consistency with the Act and 

the rules thereunder. 

As the Exchange further details above, 

the Exchange first filed a proposed rule 

change proposing fee changes as 

proposed herein on June 30, 2021, with 

the proposed fee changes effective 

beginning July 1, 2021. That proposal, 

EMERALD–2021–21, was published for 

comment in the Federal Register on July 

15, 2021.73 On August 27, 2021, 

pursuant to Section 19(b)(3)(C) of the 

Act, the Commission: (1) Temporarily 

suspended the proposed rule change; 

and (2) instituted proceedings to 

determine whether to approve or 

disapprove the proposal.74 On 

September 30, 2021, the Exchange 

withdrew the proposed rule change,75

and filed two other proposed rule 

changes proposing fee changes as 

proposed herein,76 which were each 

also subsequently withdrawn. The 

instant filing is substantially similar.77

When exchanges file their proposed 

rule changes with the Commission, 

including fee filings like the Exchange’s 

present proposal, they are required to 

provide a statement supporting the 

proposal’s basis under the Act and the 

rules and regulations thereunder 

applicable to the exchange.78 The 

instructions to Form 19b–4, on which 

exchanges file their proposed rule 

changes, specify that such statement 

‘‘should be sufficiently detailed and 

specific to support a finding that the 

proposed rule change is consistent with 

[those] requirements.’’ 79

Among other things, exchange 

proposed rule changes are subject to 

Section 6 of the Act, including Sections 

6(b)(4), (5), and (8), which requires the 

rules of an exchange to (1) provide for 

the equitable allocation of reasonable 

fees among members, issuers, and other 

persons using the exchange’s 

facilities; 80 (2) perfect the mechanism of 

a free and open market and a national 

market system, protect investors and the 

public interest, and not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or 

dealers; 81 and (3) not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.82

In temporarily suspending the 

Exchange’s fee change, the Commission 

intends to further consider whether the 

proposed fees for the cToM market data 

feed are consistent with the statutory 

requirements applicable to a national 

securities exchange under the Act. In 

particular, the Commission will 

consider whether the proposed rule 

change satisfies the standards under the 


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83See 15 U.S.C. 78f(b)(4), (5), and (8), 

respectively. 84For purposes of temporarily suspending the 

proposed rule change, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

85 15 U.S.C. 78s(b)(3)(C). Once the Commission 

temporarily suspends a proposed rule change, 

Section 19(b)(3)(C) of the Act requires that the 

Commission institute proceedings under Section 

19(b)(2)(B) to determine whether a proposed rule 

change should be approved or disapproved. 

86 15 U.S.C. 78s(b)(2)(B). 

87 Id. 

88 15 U.S.C. 78f(b)(4). 

89 15 U.S.C. 78f(b)(5). 

90 15 U.S.C. 78f(b)(8). 91See supra note 37 and accompanying text. 

Act and the rules thereunder requiring, 

among other things, that an exchange’s 

rules provide for the equitable 

allocation of reasonable fees among 

members, issuers, and other persons 

using its facilities; not permit unfair 

discrimination between customers, 

issuers, brokers or dealers; and do not 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act.83

Therefore, the Commission finds that 

it is appropriate in the public interest, 

for the protection of investors, and 

otherwise in furtherance of the purposes 

of the Act, to temporarily suspend the 

proposed rule change.84

IV. Proceedings To Determine Whether 

To Approve or Disapprove the 

Proposed Rule Change 

In addition to temporarily suspending 

the proposal, the Commission also 

hereby institutes proceedings pursuant 

to Sections 19(b)(3)(C) 85 and 19(b)(2)(B) 

of the Act 86 to determine whether the 

proposed rule change should be 

approved or disapproved. Institution of 

such proceedings is appropriate at this 

time in view of the legal and policy 

issues raised by the proposed rule 

change. Institution of proceedings does 

not indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, the 

Commission seeks and encourages 

interested persons to provide additional 

comment on the proposed rule change 

to inform the Commission’s analysis of 

whether to disapprove the proposed 

rule change. 

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

Act,87 the Commission is providing 

notice of the grounds for possible 

disapproval under consideration. The 

Commission is instituting proceedings 

to allow for additional analysis of 

whether the Exchange has sufficiently 

demonstrated how the proposed rule 

change is consistent with Sections 

6(b)(4),88 6(b)(5),89 and 6(b)(8) 90 of the 

Act. Section 6(b)(4) of the Act requires 

that the rules of a national securities 

exchange provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

issuers and other persons using its 

facilities. Section 6(b)(5) of the Act 

requires that the rules of a national 

securities exchange be designed, among 

other things, 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 not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

Section 6(b)(8) of the Act requires that 

the rules of a national securities 

exchange not impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

The Commission asks that 

commenters address the sufficiency of 

the Exchange’s statements in support of 

the proposal, which are set forth above, 

in addition to any other comments they 

may wish to submit about the proposed 

rule change. In particular, the 

Commission seeks comment on the 

following aspects of the proposal and 

asks commenters to submit data where 

appropriate to support their views: 

1. Cost Estimates and Allocation. The 

Exchange states that it is not asserting 

that the proposed fees are constrained 

by competitive forces, but rather sets 

forth a ‘‘cost-plus model,’’ employing a 

‘‘conservative methodology’’ that 

‘‘strictly considers only those costs that 

are most clearly directly related to the 

provision and maintenance of cToM 

data . . . .’’ 91 Setting forth its costs in 

providing the cToM data product, and 

as summarized in greater detail above, 

MIAX Emerald projects $202,657 in 

aggregate annual estimated costs for 

2021 as the sum of: (1) $4,160 in thirdparty expenses paid in total to Equinix 

(0.20% of the total applicable expense) 

for data center services; Zayo Group 

Holdings for network services (0.20% of 

the total applicable expense); and 

various other hardware and software 

providers (0.20% of the total applicable 

expense) supporting the production 

environment, and (2) $198,497 in 

internal expenses, allocated to (a) 

employee compensation and benefit 

costs ($185,002, approximately 2.0% of 

the Exchange’s total applicable 

employee compensation and benefits 

expense); (b) depreciation and 

amortization ($3,635, approximately 

0.20% of the Exchange’s and total 

applicable depreciation and 

amortization expense); and (c) 

occupancy costs ($9,860, approximately 

2.0% of the Exchange’s total applicable 

occupancy expense). Do commenters 

believe that the Exchange has provided 

sufficient detail about how it 

determined which costs are most clearly 

directly associated with providing and 

maintaining the cToM data product? 

The Exchange describes a ‘‘proprietary’’ 

process involving all Exchange 

department heads, including the finance 

department and numerous meetings 

between the Exchange’s Chief 

Information Officer, Chief Financial 

Officer, Head of Strategic Planning and 

Operations, Chief Technology Officer, 

various members of the Legal 

Department, and other group leaders, 

but does not specify further what 

principles were applied in making these 

determinations or arriving at particular 

allocations. Do commenters believe 

further explanation is necessary? For 

employee compensation and benefit 

costs, for example, the Exchange 

calculated an allocation of employee 

time in several departments, including 

Technology, Back Office, Systems 

Operations, Networking, Business 

Strategy Development, and Trade 

Operations, but does not provide the job 

titles and salaries of persons whose time 

was accounted for, nor explain the 

methodology used to determine how 

much of an employee’s time is devoted 

to that specific activity. What are 

commenters’ views on whether the 

Exchange has provided sufficient detail 

on the identity and nature of services 

provided by third parties? Across all of 

the Exchange’s projected costs, what are 

commenters’ views on whether the 

Exchange has provided sufficient detail 

on the elements that go into market data 

costs, including how shared costs are 

allocated and attributed to market data 

expenses, to permit an independent 

review and assessment of the 

reasonableness of purported cost-based 

fees and the corresponding profit 

margin thereon? Should the Exchange 

be required to identify what Exchange 

products or services the remaining 

percentage of un-allocated expenses are 

attributable to (e.g., what products or 

services are associated with the 

approximately 99.80% of applicable 

depreciation and amortization expenses 

that MIAX Emerald does not allocate to 

the proposed fees)? Do commenters 

believe that the costs projected for 2021 

are generally representative of expected 

costs going forward (to the extent 

commenters consider 2021 to be a 

typical or atypical year), or should an 

exchange present an estimated range of 

costs with an explanation of how profit 

margins could vary along the range of 


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92See supra Section II.A.2. 

93See text accompanying supra note 47. 

94See supra Section II.A.2. 

95See text accompanying supra notes 69–70. 96See supra Section II.A.2. 

97See text accompanying supra notes 65–67. 

98See id. 

99See id. 

100Rule 700(b)(3), Commission Rules of Practice, 

17 CFR 201.700(b)(3). 

101See id. 

102See id. 

estimated costs? Should the Exchange 

use cost projections or actual costs 

estimated for 2021 in a filing made in 

2022, or make cost projections for 2022? 

2. Revenue Estimates and Profit 

Margin Range. The Exchange provides a 

single monthly revenue figure as the 

basis for calculating the profit margin of 

3.5%. Do commenters believe this is 

reasonable? If not, why not? The 

Exchange states that the proposed fees 

are ‘‘designed to cover its costs with a 

limited return in excess of such costs,’’ 

and that ‘‘revenue and associated profit 

margin . . . are not solely intended to 

cover the costs associated with 

providing services subject to the 

proposed fees.’’ 92 The profit margin is 

also dependent on the accuracy of the 

cost projections which, if inflated 

(intentionally or unintentionally), may 

render the projected profit margin 

meaningless. The Exchange 

acknowledges that this margin may 

fluctuate from month to month as 

Members and non-Members add and 

drop subscriptions,93 and that costs may 

increase. The Exchange also states that 

the number of subscriptions has not 

materially changed over previous 

months and so the months that the 

Exchange has used as a baseline to 

perform its assessment are 

representative of reasonably anticipated 

costs and expenses.94 The Exchange 

does not account for the possibility of 

cost decreases, however. What are 

commenters’ views on the extent to 

which actual costs (or revenues) deviate 

from projected costs (or revenues)? Do 

commenters believe that the Exchange’s 

methodology for estimating the profit 

margin is reasonable? Should the 

Exchange provide a range of profit 

margins that it believes are reasonably 

possible, and the reasons therefor? 

3. Reasonable Rate of Return. Do 

commenters agree with the Exchange 

that its expected 3.5% profit margin 

would constitute a reasonable rate of 

return over costs for providing the cToM 

data product? If not, what would 

commenters consider to be a reasonable 

rate of return and/or what methodology 

would they consider to be appropriate 

for determining a reasonable rate of 

return? Further, the Exchange states that 

it chose to initially provide the cToM 

data product for free and to forego 

revenue that they otherwise could have 

generated from assessing any fees.95

What are commenters’ views regarding 

what factors should be considered in 

determining what constitutes a 

reasonable rate of return for the cToM 

market data product? Do commenters 

believe it relevant to an assessment of 

reasonableness that, according to the 

Exchange, the Exchange’s proposed fees 

are similar to or lower than fees charged 

by competing options exchanges with 

similar market share? Should an 

assessment of reasonable rate of return 

include consideration of factors other 

than costs; and if so, what factors 

should be considered, and why? 

4. Periodic Reevaluation. The 

Exchange addresses whether it believes 

a material deviation from the 

anticipated profit margin would warrant 

the need to make a rule filing pursuant 

to Section 19(b) of the Act to increase 

or decrease the fees accordingly, stating 

that ‘‘[a]ny requirement that an 

exchange should conduct a periodic reevaluation on a set timeline of its cost 

justification and amend its fees 

accordingly should be established by 

the Commission holistically, applied to 

all exchanges and not just through 

pending fee proposals, such as this 

filing,’’ and that ‘‘[i]n order to be fairly 

applied, such a mandate should be 

applied to existing access fees as 

well.’’ 96 In light of the impact that the 

number of subscriptions has on profit 

margins, and the potential for costs to 

decrease (or increase) over time, what 

are commenters’ views on the need for 

exchanges to commit to reevaluate, on 

an ongoing and periodic basis, their 

cost-based data fees to ensure that the 

fees stay in line with their stated 

profitability projections and do not 

become unreasonable over time, for 

example, by failing to adjust for 

efficiency gains, cost increases or 

decreases, and changes in subscribers? 

How formal should that process be, how 

often should that reevaluation occur, 

and what metrics and thresholds should 

be considered? How soon after a new 

data fee change is implemented should 

an exchange assess whether its revenue 

and/or cost estimates were accurate and 

at what threshold should an exchange 

commit to file a fee change if its 

estimates were inaccurate? Should an 

initial review take place within the first 

30 days after a data fee is implemented? 

60 days? 90 days? Some other period? 

5. Fees for Internal Distributors versus 

External Distributors. The Exchange 

argues that it is reasonable, equitable, 

and not unfairly discriminatory to 

assess Internal Distributors fees that are 

lower than the fees assessed for External 

Distributors for subscriptions to the 

cToM data feed ($1,250 per month for 

Internal Distributors versus $1,750 per 

month for External Distributors), since 

Internal Distributors have limited, 

restricted usage rights to the market 

data, as compared to External 

Distributors, which have more 

expansive usage rights, including rights 

to commercialize such market data.97 In 

addition, the Exchange states that it 

‘‘utilizes more resources’’ to support 

External Distributors as compared to 

Internal Distributors, as External 

Distributors have reporting and 

monitoring obligations that Internal 

Distributors do not have, thus requiring 

‘‘additional time and effort’’ of the 

Exchange’s staff.98 What are 

commenters’ views on the adequacy of 

the information the Exchange provides 

regarding the differential between the 

Internal Distributor and External 

Distributor fees? Do commenters believe 

that the fees for Internal Distributors 

and External Distributors, as well as the 

fee differences between Distributors, are 

supported by the Exchange’s assertions 

that it sets the differentiated pricing 

structure in a manner that is equitable 

and not unfairly discriminatory? Do 

commenters believe that the Exchange 

should demonstrate how the proposed 

Distributor fee levels correlate with 

different costs to better substantiate how 

the Exchange ‘‘utilizes more resources’’ 

to support External Distributors versus 

Internal Distributors and permit an 

assessment of the Exchange’s statement 

that ‘‘External Distributors have 

reporting and monitoring obligations 

that Internal Distributors do not have, 

thus requiring additional time and effort 

of Exchange staff’’? 99

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the [Act] and the rules 

and regulations issued thereunder . . . 

is on the [SRO] that proposed the rule 

change.’’ 100 The description of a 

proposed rule change, its purpose and 

operation, its effect, and a legal analysis 

of its consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,101 and 

any failure of an SRO to provide this 

information may result in the 

Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Act and the applicable rules 

and regulations.102 Moreover, 

‘‘unquestioning reliance’’ on an SRO’s 


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103See Susquehanna Int’l Group, LLP v. 

Securities and Exchange Commission, 866 F.3d 

442, 446–47 (D.C. Cir. 2017) (rejecting the 

Commission’s reliance on an SRO’s own 

determinations without sufficient evidence of the 

basis for such determinations). 

104 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act 

grants the Commission flexibility to determine what 

type of proceeding—either oral or notice and 

opportunity for written comments—is appropriate 

for consideration of a particular proposal by an 

SRO. See Securities Acts Amendments of 1975, 

Report of the Senate Committee on Banking, 

Housing and Urban Affairs to Accompany S. 249, 

S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 

105 15 U.S.C. 78s(b)(3)(C). 

106 17 CFR 200.30–3(a)(12), (57), and (58). 

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

2 17 CFR 240.19b–4. 

representations in a proposed rule 

change would not be sufficient to justify 

Commission approval of a proposed rule 

change.103

The Commission believes it is 

appropriate to institute proceedings to 

allow for additional consideration and 

comment on the issues raised herein, 

including as to whether the proposal is 

consistent with the Act, any potential 

comments or supplemental information 

provided by the Exchange, and any 

additional independent analysis by the 

Commission. 

V. Request for Written Comments 

The Commission requests written 

views, data, and arguments with respect 

to the concerns identified above, as well 

as any other relevant concerns. In 

particular, the Commission invites the 

written views of interested persons 

concerning whether the proposal is 

consistent with Sections 6(b)(4), 6(b)(5), 

and 6(b)(8), or any other provision of the 

Act, or the rules and regulations 

thereunder. The Commission asks that 

commenters address the sufficiency and 

merit of the Exchange’s statements in 

support of the proposal, in addition to 

any other comments they may wish to 

submit about the proposed rule change. 

Although there do not appear to be any 

issues relevant to approval or 

disapproval that would be facilitated by 

an oral presentation of views, data, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4, any 

request for an opportunity to make an 

oral presentation.104

Interested persons are invited to 

submit written data, views, and 

arguments concerning the proposed rule 

change, 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– 

EMERALD–2022–06 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–EMERALD–2022–06. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (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 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 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–EMERALD–2022–06 and 

should be submitted on or before March 

15, 2022. Rebuttal comments should be 

submitted by March 29, 2022. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,105 that 

File Number SR–EMERALD–2022–06 be 

and hereby is, temporarily suspended. 

In addition, the Commission is 

instituting proceedings to determine 

whether the proposed rule change 

should be approved or disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.106

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–03657 Filed 2–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94252; File No. SR– 

CboeBZX–2022–008] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule 

February 15, 2022. 

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 February 

7, 2022, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(the ‘‘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 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’ or ‘‘BZX 

Equities’’) proposes to amend its Fee 

Schedule. The text of the proposed rule 

change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

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. 


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