40104 Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Under the PCRP, MIAX Options credits each 

Member the per contract amount resulting from 

each Priority Customer order transmitted by that 

Member which is executed electronically on the 

Exchange in all multiply-listed option classes 

(excluding, in simple or complex as applicable, 

QCC and cQCC Orders, mini-options, Priority 

Customer-to-Priority Customer Orders, C2C and 

cC2C Orders, PRIME and cPRIME AOC Responses, 

PRIME and cPRIME Contra-side Orders, PRIME and 

cPRIME Orders for which both the Agency and 

Contra-side Order are Priority Customers, and 

executions related to contracts that are routed to 

one or more exchanges in connection with the 

Options Order Protection and Locked/Crossed 

Market Plan referenced in Exchange Rule 1400), 

provided the Member meets certain percentage 

thresholds in a month as described in the Priority 

Customer Rebate Program table. See Fee Schedule, 

Section (1)(a)iii. 

4 ‘‘cPRIME’’ is the process by which a Member 

may electronically submit a ‘‘cPRIME Order’’ (as 

defined in Rule 518(b)(7)) it represents as agent (a 

‘‘cPRIME Agency Order’’) against principal or 

solicited interest for execution (a ‘‘cPRIME 

Auction’’), subject to the restrictions set forth in 

Exchange Rule 515A, Interpretation and Policy .12. 

See Exchange Rule 515A. 

5A ‘‘complex order’’ is any order involving the 

concurrent purchase and/or sale of two or more 

different options in the same underlying security 

(the ‘‘legs’’ or ‘‘components’’ of the complex order), 

for the same account, in a ratio that is equal to or 

greater than one-to-three (.333) and less than or 

equal to three-to-one (3.00) and for the purposes of 

executing a particular investment strategy. A 

complex order can also be a ‘‘stock-option’’ order, 

which is an order to buy or sell a stated number 

of units of an underlying security coupled with the 

purchase or sale of options contract(s) on the 

opposite side of the market, subject to certain 

contingencies set forth in the proposed rules 

governing complex orders. For a complete 

definition of a ‘‘complex order,’’ see Exchange Rule 

518(a)(5). See also Securities Exchange Act Release 

No. 78620 (August 18, 2016), 81 FR 58770 (August 

25, 2016) (SR–MIAX–2016–26). 

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–NYSEArca–2021–61. 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–NYSEArca–2021–61 and 

should be submitted on or before 

August 16, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15811 Filed 7–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92448; File No. SR–MIAX– 

2021–34] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend Its Fee Schedule for 

the Complex PRIME Agency Order 

Credit 

July 20, 2021. 

Pursuant to the provisions of Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on July 12, 2021, Miami International 

Securities Exchange LLC (‘‘MIAX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the MIAX Options Fee Schedule 

(the ‘‘Fee Schedule’’). 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings, at MIAX’s principal office, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Fee Schedule to (i) modify the Priority 

Customer Rebate Program (‘‘PCRP’’) 3 as 

it pertains to per contract credits for 

complex PRIME (‘‘cPRIME’’) 4 Agency 

Orders for Priority Customers; and (ii) to 

remove the per contract credit cap for 

cPRIME Agency Orders for Priority 

Customers and the associated waiver of 

same which was in effect until June 30, 

2021. The Exchange initially filed this 

proposal on July 1, 2021 (SR–MIAX– 

2021–33) and withdrew such filing on 

July 12, 2021. The Exchange proposes to 

implement the fee change effective July 

12, 2021. 

Background 

Exchange Rule 518(b)(7) defines a 

cPRIME Order as a type of complex 

order 5 that is submitted for 

participation in a cPRIME Auction and 

trading of cPRIME Orders is governed 

by Rule 515A, Interpretation and 


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6See Securities Exchange Act Release No. 81131 

(July 12, 2017), 82 FR 32900 (July 18, 2017) (SR– 

MIAX–2017–19) (Order Granting Approval of a 

Proposed Rule Change to Amend MIAX Options 

Rules 515, Execution of Orders and Quotes; 515A, 

MIAX Price Improvement Mechanism (‘‘PRIME’’) 

and PRIME Solicitation Mechanism; and 518, 

Complex Orders). 7 Id. 

8The term ‘‘Member’’ means an individual or 

organization approved to exercise the trading rights 

associated with a Trading Permit. Members are 

deemed ‘‘members’’ under the Exchange Act. See 

Exchange Rule 100. 9An Auction-or-Cancel or ‘‘AOC’’ order is a limit 

order used to provide liquidity during a specific 

Exchange process (such as the Opening Imbalance 

process described in Rule 503) with a time in force 

that corresponds with that event. AOC orders are 

not displayed to any market participant, are not 

included in the MBBO and therefore are not eligible 

for trading outside of the event, may not be routed, 

and may not trade at a price inferior to the away 

markets. See Exchange Rule 516(b)(4). 

10An Auction or Cancel or ‘‘AOC’’ eQuote is a 

quote submitted by a Market Maker to provide 

liquidity in a specific Exchange process (such as the 

Opening Imbalance Process described in Rule 503) 

with a time in force that corresponds with the 

duration of that event and will automatically expire 

at the end of that event. AOC eQuotes are not 

displayed to any market participant, are not 

included in the MBBO and therefore are not eligible 

for trading outside of the event. An AOC eQuote 

does not automatically cancel or replace the Market 

Maker’s previous Standard quote or eQuote. See 

Exchange Rule 517(a)(2)(ii). 

11The ‘‘Simple Order Book’’ is the Exchange’s 

regular electronic book of orders and quotes. See 

Exchange Rule 518(a)(15). 

12See supra note 6. Mini-options may only be 

part of a complex order that includes other minioptions. Only those complex orders in the classes 

designated by the Exchange and communicated to 

Members via Regulatory Circular with no more than 

the applicable number of legs, as determined by the 

Exchange on a class-by-class basis and 

communicated to Members via Regulatory Circular, 

are eligible for processing. See Exchange Rule 

518(a)(5). 

13The ‘‘Strategy Book’’ is the Exchange’s 

electronic book of complex orders and complex 

quotes. See Exchange Rule 518(a)(17). 

14See Securities Exchange Act Release No. 81372 

(August 10, 2017) 82 FR 38964 (August 16, 2017) 

(SR–MIAX–2017–40). 

15See Securities Exchange Act Release No.83797 

(August 8, 2018), 83 FR 40373 (August 14, 2018) 

(SR–MIAX–2018–22). 

16See Securities Exchange Act Release No. 88349 

(March 10, 2020), 85 FR 14995 (March 16, 2020) 

(SR–MIAX–2020–05). 

17See Securities Exchange Act Release Nos. 

89035 (June 9, 2020), 85 FR 36249 (June 15, 2020) 

(SR–MIAX–2020–12) (Extending the waiver period 

from June 1, 2020, until July 31, 2020); 89530 

(August 12, 2020), 85 FR 50845 (August 18, 2020) 

(SR–MIAX–2020–26) (Extending the waiver period 

from July 31, 2020, until August 31, 2020); 89771 

(September 4, 2020), 85 FR 55873 (September 10, 

2020) (SR–MIAX–2020–28) (Extending the waiver 

period from August 31, 2020, until December 31, 

2020); 90818 (December 29, 2020), 86 FR 350 

(January 5, 2021) (SR–MIAX–2020–40) (Extending 

the waiver period from December 31, 2020, until 

March 31, 2021); and 91505 (April 8, 2021), 86 FR 

19677 (April 14, 2021) (SR–MIAX–2021–07) 

(Extending the waiver period from April 1, 2021, 

until June 30, 2021). 

18Under the PCRP, any Member or its Affiliate 

that qualifies for Priority Customer Rebate Program 

tier 4 and executes Priority Customer standard, nonpaired complex volume at least equal to or greater 

than three (3) times their Priority Customer cPRIME 

Agency Order volume, on a monthly basis, will 

receive a credit of $0.12 per contract for cPRIME 

Agency Orders instead of the credit otherwise 

applicable to such orders in tier 4. 

19 Id. 

Policies .12.6 CPRIME Orders are 

processed and executed in the 

Exchange’s PRIME mechanism, the 

same mechanism that the Exchange uses 

to process and execute simple PRIME 

orders, pursuant to Exchange Rule 

515A.7 PRIME is a process by which a 

Member 8 may electronically submit for 

execution an order it represents as agent 

(an ‘‘Agency Order’’) against principal 

interest and/or solicited interest. The 

Member that submits the Agency Order 

(‘‘Initiating Member’’) agrees to 

guarantee the execution of the Agency 

Order by submitting a contra-side order 

representing principal interest or 

solicited interest (‘‘Contra-Side Order’’). 

When the Exchange receives a properly 

designated Agency Order for Auction 

processing, a request for response 

(‘‘RFR’’) detailing the option, side, size 

and initiating price is broadcasted to 

MIAX participants up to an optional 

designated limit price. Members may 

submit responses to the RFR, which can 

be either an Auction or Cancel (‘‘AOC’’) 

order 9 or an AOC eQuote.10 A cPRIME 

Auction is the price-improvement 

mechanism of the Exchange’s System 

pursuant to which an Initiating Member 

electronically submits a complex 

Agency Order into a cPRIME Auction. 

The Initiating Member, in submitting an 

Agency Order, must be willing to either 

(i) cross the Agency Order at a single 

price against principal or solicited 

interest, or (ii) automatically match 

against principal or solicited interest, 

the price and size of a RFR that is 

broadcast to MIAX participants up to an 

optional designated limit price. Such 

responses are defined as cPRIME AOC 

Responses or cPRIME eQuotes. The 

PRIME mechanism is used for orders on 

the Exchange’s Simple Order Book.11

The cPRIME mechanism is used for 

Complex Orders 12 on the Exchange’s 

Strategy Book,13 with the cPRIME 

mechanism operating in the same 

manner for processing and execution of 

cPRIME Orders that is used for PRIME 

Orders on the Simple Order Book. 

Removal of Contract Cap 

In conjunction with the 

implementation of cPRIME Orders on 

the Exchange, the Exchange amended its 

Priority Customer Rebate Program to 

establish a per contract credit rate for 

cPRIME Agency Orders for Priority 

Customers.14 The Exchange limited the 

cPRIME Agency Order Credit to be 

payable only to the first 1,000 contracts 

per leg for each cPRIME Agency Order 

in all tiers under the PCRP in its filing 

on August 1, 2018.15 On February 28, 

2020, the Exchange amended the Fee 

Schedule to waive the 1,000 contract 

cap per leg for cPRIME Agency Order 

rebates for all tiers under the PCRP from 

March 1, 2020, until May 31, 2020.16

The Exchange subsequently extended 

the waiver from June 1, 2020, until June 

30, 2021, in a series of filings beginning 

June 2020.17 The Exchange now 

proposes to remove footnote ‘‘*’’ in 

Section (1)(a)(iii) of the Fee Schedule in 

its entirety to remove the per contract 

credit cap of 1,000 contracts and to also 

eliminate the waiver of the contract cap 

per leg for cPRIME Agency Order 

rebates for all tiers under the PCRP. 

cPRIME Agency Order per Contract 

Credit 

In conjunction with the removal of 

the per credit cap of 1,000 contracts as 

described above, the Exchange now 

proposes to adopt a new table under the 

PCRP for cPRIME Agency Orders for 

Priority Customers where the max leg of 

the order is greater than 1,000 contracts. 

The table will provide a tiered agency 

credit rate for cPRIME Agency Orders 

for Priority Customers dependent upon 

the break-up percentage and the largest 

leg of the order being greater than 1,000 

contracts for Members in PCRP Tiers 1– 

4, unless the Member is eligible to 

receive the alternative cPRIME Agency 

Order Credit amount for cPRIME 

Agency Orders in Tier 4 of the PRCP,18

in which case those orders will earn a 

credit of $0.12. 

Orders that have a max leg size of 

1,000 contracts or less will continue to 

receive the agency credit described in 

PCRP Tier 1–4, unless the Member is 

eligible to receive the alternative 

cPRIME Agency Order Credit amount 

for cPRIME Agency Orders in Tier 4 of 

the PCRP, in which case the order will 

earn a per contract credit of $0.12.19 The 

Exchange proposes to adopt new 

footnote ‘‘*’’ to state that for cPRIME 

Agency Orders with a max leg size of 

1,000 contracts or less, the Exchange 

will assess the credits as described in 

the Priority Customer Rebate Program 

table for Tiers 1–4 regardless of the 

Order Break-up percentage. 

Additionally, the break-up credits 

described in section (1)(a)(vi) of the Fee 

Schedule will continue to apply. 

The table will provide a per contract 

agency credit based upon the break-up 

percentage of the order. Specifically, 

orders with a break-up % of 0–10% will 

earn a credit of $0.05 per contract; 

orders with a break-up percentage 


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20See supra note 18. 

21 15 U.S.C. 78f(b). 

22 15 U.S.C. 78f(b)(4) and (5). 

23See https://www.cboe.com/us/options/market_

share/. 

24See Securities Exchange Act Release No. 85301 

(March 13, 2019), 84 FR 10166 (March 19, 2019) 

(SR–MIAX–2019–09). 

25See Cboe Fee Schedule, ‘‘Break-Up Credits,’’ 

available at https://cdn.cboe.com/resources/ 

members_hip/Cboe_FeeSchedule.pdf. 

26See supra note 18. 

27See Cboe Fees Schedule, p.2; see also NYSE 

American Fee Schedule, p. 18, footnote 2 under 

Section I.G. 

28 15 U.S.C. 78f(b)(4). 

greater than 10% to, and including 20%, 

will earn a per contract credit of $0.06; 

orders with a break-up percentage 

greater than 20% to, and including 30%, 

will earn a per contract credit of $0.07; 

orders with a break-up percentage 

greater than 30% to, and including 40%, 

will earn a per contract credit of $0.08; 

orders with a break-up percentage 

greater than 40% will earn a per 

contract credit of $0.10, unless the 

Member is eligible to receive the 

alternative cPRIME Agency Order Credit 

amount for cPRIME Agency Orders in 

Tier 4 of the PCRP, in which case the 

order will earn a per contract credit of 

$0.12.20

For example, if the cPRIME Agency 

Order has two legs (one for 400 

contracts and the other for 1,200 

contracts) and trades 30% with an AOC 

Response, the order would receive an 

agency credit of $0.07 per contract for 

all legs of the order, as the max leg of 

the order was greater than 1,000 

contracts and 30% of the order was 

broken up. The portion of the order that 

was broken up will also receive the 

agency credit of $0.07 per contract. 

The decision to offer tiered cPRIME 

agency credits and to remove the credit 

cap is based on an analysis of current 

revenue and volume levels and is 

designed to encourage Priority Customer 

order flow to the Exchange. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 21

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 22 in 

particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among its members and issuers 

and other persons using its facilities. 

The Exchange also believes the proposal 

furthers the objectives of Section 6(b)(5) 

of the Act in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest and is 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers and dealers. 

The Exchange believes its proposal 

provides for the equitable allocation of 

reasonable dues and fees and is not 

unfairly discriminatory for the following 

reasons. The Exchange operates in a 

highly competitive market in which 

market participants can readily direct 

order flow to competing venues if they 

deem fee levels at a particular venue to 

be excessive or incentives to be 

insufficient. More specifically, the 

Exchange is only one of 16 options 

venues to which market participants 

may direct their order flow. Based on 

publicly available information, no single 

options exchange has more than 16% of 

the market share.23 Thus, in such a lowconcentrated and highly competitive 

market, no single options exchange 

possess significant pricing power in the 

execution of option order flow. 

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow, or discontinue use 

of certain categories of products, in 

response to fee changes. For example, 

on March 1, 2019, the Exchange filed 

with the Commission an immediately 

effective filing to decrease certain 

credits assessable to Members pursuant 

to the PCRP.24 The Exchange 

experienced a decrease in total market 

share between the months of February 

and March of 2019. Accordingly, the 

Exchange believes that the March 1, 

2019, fee change may have contributed 

to the decrease in the Exchange’s market 

share and, as such, the Exchange 

believes competitive forces constrain 

options exchange transaction and nontransaction fees. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees, and market participants can readily 

trade on competing venues if they deem 

pricing levels at those other venues to 

be more favorable. In response to the 

competitive environment, the Exchange 

offers specific rates and credits in its 

fees schedule, like those of other 

options exchanges’ fees schedules, 

which the Exchange believes provides 

incentives to Members to increase order 

flow of certain qualifying orders. 

The Exchange believes that its 

proposal to remove the 1,000 contract 

cap limitation per leg of cPRIME Agency 

Orders and the associated waiver of 

same, and the proposed per contract 

credit rebate table will encourage 

Priority Customer order flow to 

auctions. Increased Priority Customer 

order flow benefits all market 

participants because it continues to 

attract liquidity to the Exchange by 

providing more trading opportunities. 

This attracts Market Makers and other 

liquidity providers, thus, facilitating 

price improvement in the auction 

process, signaling additional 

corresponding increase in order flow 

from other market participants, and, as 

a result, increasing liquidity on the 

Exchange. 

The Exchange believes that its 

proposal to adopt a tiered approach to 

rebates for cPRIME Agency Orders for 

Priority Customers is consistent with 

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

proposal is reasonable, equitable and 

not unfairly discriminatory. As noted 

above, the Exchange operates in a highly 

competitive market. The Exchange is 

only one of several options venues to 

which market participants may direct 

their order flow, and it represents a 

small percentage of the overall market. 

The Exchange believes that the 

proposed fees are reasonable, equitable, 

and not unfairly discriminatory in that 

competing options exchanges offer 

similar fees and credits in connection 

with similar price improvement 

auctions.25

cPRIME Agency Orders for Priority 

Customers that have a max leg size of 

1,000 contracts or less will continue to 

receive the agency credit described in 

PCRP Tier 1–4, unless the Member is 

eligible to receive the alternative 

cPRIME Agency Order Credit amount 

for cPRIME Agency Orders in Tier 4 of 

the PCRP, in which case the order will 

earn a per contract credit of $0.12.26 The 

Exchange believes that establishing a 

1,000 contract threshold is not new or 

novel as other exchanges have different 

pricing and rates (i.e., caps) for volume 

over 1,000 contracts.27

The Exchange’s proposal to adopt a 

new table to provide a tiered credit rate 

for cPRIME Agency Orders for Priority 

Customers whose largest leg size is 

greater than 1,000 contracts is consistent 

with Section 6(b)(4) of the Act 28

because it applies equally to all 

participants of the PCRP. The Exchange 

believes that the proposed rebate 

structure is fair, equitable and not 

unreasonably discriminatory. The PCRP 

is reasonably designed because it will 

continue to provide an incentive to 

providers of Priority Customer order 

flow to send that Priority Customer 

order flow to the Exchange to receive a 

credit in a manner that enables the 

Exchange to improve its overall 

competitiveness and strengthen its 

market quality for all participants. The 


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29See supra note 18. 

30 15 U.S.C. 78f(b)(4). 

31See supra note 27. 

32 15 U.S.C. 78f(b)(8). 

33See Securities Exchange Act Release No. 51808, 

70 FR 37495, 37498–99 (June 29, 2005) (S7–10–04) 

(Final Rule). 

34See supra note 27. 

35See supra note 23. 36See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 

37NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSEArca–2006–21)). 

Exchange conducted an internal 

analysis of fees and rebates associated 

with cPRIME Agency Orders and 

determined the proposed applicable 

rates at each Order Break-up %. For 

pricing and competitive reasons the 

Exchange determined that the agency 

credit for Order Break-ups from 0%– 

40% would be tiered, and that Order 

Break-ups of greater than 40% would 

receive a standard agency credit of 

$0.10, unless the Member is eligible to 

receive the alternative cPRIME Agency 

Order Credit amount for cPRIME 

Agency Orders in Tier 4 of the PCRP, in 

which case the order will earn a per 

contract credit of $0.12.29

In addition, The Exchange believes 

that its proposal is consistent with 

Section 6(b)(5) of the Act 30 because it 

perfects the mechanisms of a free and 

open market and a national market 

system and protects investors and the 

public interest because an increase in 

Priority Customer order flow will bring 

greater volume and liquidity to the 

Exchange, which benefits all market 

participants by providing more trading 

opportunities and tighter spreads. To 

the extent Priority Customer order flow 

is increased by this proposal, market 

participants will increasingly compete 

for the opportunity to trade on the 

Exchange including sending more 

orders and provided narrower and 

larger-sized quotations in the effort to 

trade with such Priority Customer order 

flow. 

The Exchange believes that providing 

rebates for Priority Customers that 

submit cPRIME Agency Orders is 

equitable and not unfairly 

discriminatory because the proposed 

rebate schedule will apply equally to all 

cPRIME Agency Orders for Priority 

Customers. The Exchange believes that 

the application of the rebate is equitable 

and not unfairly discriminatory because, 

as stated above, Priority Customer order 

flow enhances liquidity on the 

Exchange, in turn providing more 

trading opportunities and attracting 

other market participants, thus, 

facilitating tighter spreads, increased 

order flow and trading opportunities to 

the benefit of all market participants. 

Moreover, the options industry has a 

long history of providing preferential 

pricing to Priority Customer orders, and 

the Exchange’s current fees schedule 

currently does so in many places, as 

does the fee structure of at least one 

other exchange.31

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,32 the Exchange does not believe 

that the proposed rule change will 

impose any burden on intra-market or 

intra-market competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Rather, as 

discussed above, the Exchange believes 

that the proposed change would 

encourage the submission of additional 

liquidity to price improvement auctions, 

thereby promoting market depth, price 

discovery and transparency and 

enhancing order execution and price 

improvement opportunities for all 

Members. As a result, the Exchange 

believes that the proposed change 

furthers the Commission’s goal in 

adopting Regulation NMS of fostering 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 33

The Exchange does not believe that its 

proposal will impose any burden on 

intra-market competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because the 

proposed changes will apply uniformly 

to all eligible Priority Customer orders. 

The proposed change is designed to 

attract additional order flow to the 

Exchange. The Exchange believes that 

this proposal will continue to encourage 

Members to submit cPRIME Agency 

Orders for Priority Customers, which 

will increase liquidity and benefit all 

market participants by providing more 

trading opportunities and tighter 

spreads. The Exchange notes the fact 

that preferential pricing to Priority 

Customers is a long-standing options 

industry practice. The proposed rebate 

changes serve to enhance Priority 

Customer order flow to the Exchange’s 

Price Improvement Mechanism, which, 

as a result, facilitates increased liquidity 

and execution opportunities to the 

benefit of all market participants. 

The Exchange also does not believe 

that its proposal will impose any burden 

on inter-market competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because, as 

noted above, at least one other 

competing options exchange 34 currently 

has similar rebates in place in 

connection with similar price 

improvement auctions. Additionally, 

and as previously discussed, the 

Exchange operates in a highly 

competitive market. Members have 

numerous alternative venues that they 

participate on and direct their order 

flow to, including 15 other options 

exchanges, many of which offer 

substantially similar price improvement 

auctions. Based on publicly available 

information, no single options exchange 

has more than 16% of the market 

share.35 Therefore, no exchange 

possesses significant pricing power in 

the execution of option order flow. 

Participants can readily choose to send 

their orders to other exchanges if they 

deem fee levels at those other exchanges 

to be more favorable. Moreover, the 

Commission has repeatedly expressed 

its preference for competition over 

regulatory intervention in determining 

prices, products, and services in the 

securities markets. Specifically, in 

Regulation NMS, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 36 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. Securities and 

Exchange Commission, the D.C. Circuit 

states as follows: ‘‘[n]o one disputes that 

competition for order flow is ‘fierce.’ 

. . . As the SEC explained, ‘[i]n the U.S. 

national market system, buyers and 

sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’ . . .’’ 37 Accordingly, the 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

Accordingly, the Exchange believes 

that the proposed changes will not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because it will continue to encourage 

order flow, which provides greater 

volume and liquidity, benefiting all 

market participants by providing more 


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40108 Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices 

38 15 U.S.C. 78s(b)(3)(A)(ii). 

39 17 CFR 240.19b–4(f)(2). 

40 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Rules 1.1(h) (definition of ETP) & (i) 

(definition of ETP Holder). 

trading opportunities and tighter 

spreads. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act,38 and Rule 

19b–4(f)(2) 39 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–2021–34 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–2021–34. 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–2021–34, and 

should be submitted on or before 

August 16, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.40

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15809 Filed 7–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92446; File No. SR– 

NYSENAT–2021–15] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Its Rules To 

Add New Subparagraph (i)(4) to Rule 

7.31 

July 20, 2021. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on July 6, 

2021, NYSE National, Inc. (‘‘NYSE 

National’’ or the ‘‘Exchange’’) 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 selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to its rules to 

add new subparagraph (i)(4) to Rule 

7.31 (Orders and Modifiers) regarding 

orders designated as ‘‘Retail Orders.’’ 

The proposed rule change is available 

on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, 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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

rules to add new subparagraph (i)(4) to 

Rule 7.31 (Orders and Modifiers) to add 

a description of a Retail Order modifier. 

Proposed Rule Change 

The Exchange proposes to amend 

Rule 7.31 to add new subparagraph 

(i)(4) to provide for ETP Holders 4 to 

designate an order with a retail modifier 

(‘‘Retail Order’’). The Exchange 

proposes that the new ‘‘Retail Order’’ 

modifier would be used only for 

purposes of such orders being eligible 

for different rates on its Schedule of 

Fees and Rebates (‘‘Fee Schedule’’), and 

is not proposing to add a retail priceimprovement program for orders 

designated as ‘‘Retail Orders’’ pursuant 

to proposed Rule 7.31(i)(4). Instead, by 

adding the proposed Retail Modifier to 

proposed Rule 7.31(i)(4) now, the 

Exchange will have flexibility in the 

future to amend its Fee Schedule to add 

rates designated for ‘‘Retail Orders.’’ 


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