46726 Federal Register / Vol. 86, No. 158 / Thursday, August 19, 2021 / Notices 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6)(iii). 

16For purposes only of waiving the 30-day 

operative delay, the Commission also has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 14 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),15 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has requested 

that the Commission waive the 30-day 

operative delay. Waiver of the operative 

delay would allow the Exchange to align 

its rules with other options exchanges 

with respect to the opening month for 

LEAPs on index options and implement 

its proposed rule change on or before 

September 30, 2021. The Commission 

believes that the proposed rule change 

presents no novel issues and that waiver 

of the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission hereby 

waives the operative delay and 

designates the proposed rule change 

operative upon filing.16

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• 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– 

BX–2021–034 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–BX–2021–034. 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–BX–2021–034, and should 

be submitted on or before September 9, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–17756 Filed 8–18–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92662; File No. SR– 

EMERALD–2021–25] 

Self-Regulatory Organizations; MIAX 

Emerald, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Its Fee 

Schedule To Adopt a Tiered-Pricing 

Structure for Additional Limited 

Service MIAX Emerald Express 

Interface Ports 

August 13, 2021. 

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 August 2, 

2021, MIAX Emerald, LLC (‘‘MIAX 

Emerald’’ 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 Exchange’s Fee Schedule 

(the ‘‘Fee Schedule’’) to amend certain 

port fees. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/emerald, 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. 


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Federal Register / Vol. 86, No. 158 / Thursday, August 19, 2021 / Notices 46727 

3The MIAX Emerald Express Interface (‘‘MEI’’) is 

a connection to the MIAX Emerald System that 

enables Market Makers to submit simple and 

complex electronic quotes to MIAX Emerald. See 

the Definitions Section of the Fee Schedule. 

4The term ‘‘Market Makers’’ refers to Lead Market 

Makers (‘‘LMMs’’), Primary Lead Market Makers 

(‘‘PLMMs’’), and Registered Market Makers 

(‘‘RMMs’’) collectively. See the Definitions Section 

of the Fee Schedule and Exchange Rule 100. 

5The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See the Definitions Section of the Fee 

Schedule and Exchange Rule 100. 

6 ‘‘Full Service MEI Ports’’ means a port which 

provides Market Makers with the ability to send 

Market Maker simple and complex quotes, eQuotes, 

and quote purge messages to the MIAX Emerald 

System. Full Service MEI Ports are also capable of 

receiving administrative information. Market 

Makers are limited to two Full Service MEI Ports 

per Matching Engine. See the Definitions Section of 

the Fee Schedule. 

7 ‘‘Limited Service MEI Ports’’ means a port 

which provides Market Makers with the ability to 

send simple and complex eQuotes and quote purge 

messages only, but not Market Maker Quotes, to the 

MIAX Emerald System. Limited Service MEI Ports 

are also capable of receiving administrative 

information. Market Makers initially receive two 

Limited Service MEI Ports per Matching Engine. 

See the Definitions Section of the Fee Schedule. 

8 ‘‘Matching Engine’’ means a part of the MIAX 

Emerald electronic system that processes options 

orders and trades on a symbol-by-symbol basis. 

Some Matching Engines will process option classes 

with multiple root symbols, and other Matching 

Engines may be dedicated to one single option root 

symbol (for example, options on SPY may be 

processed by one single Matching Engine that is 

dedicated only to SPY). A particular root symbol 

may only be assigned to a single designated 

Matching Engine. A particular root symbol may not 

be assigned to multiple Matching Engines. See the 

Definitions Section of the Fee Schedule. 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(4). 

11 15 U.S.C. 78f(b)(5). 

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 adopt a tiered-pricing 

structure for additional Limited Service 

MIAX Emerald Express Interface 

(‘‘MEI’’) Ports 3 available to Market 

Makers.4 The Exchange believes a 

tiered-pricing structure will encourage 

Market Makers to be more efficient and 

economical when determining how to 

connect to the Exchange. This should 

also enable the Exchange to better 

monitor and provide access to the 

Exchange’s network to ensure sufficient 

capacity and headroom in the System.5

Additional Limited Service MEI Port 

Tiered-Pricing Structure 

The Exchange proposes to amend the 

fees for additional Limited Service MEI 

Ports. Currently, the Exchange allocates 

two (2) Full Service MEI Ports 6 and two 

(2) Limited Service MEI Ports 7 per 

matching engine 8 to which each Market 

Maker connects. Market Makers may 

also request additional Limited Service 

MEI Ports for each matching engine to 

which they connect. The Full Service 

MEI Ports, Limited Service MEI Ports 

and the additional Limited Service MEI 

Ports all include access to the 

Exchange’s primary and secondary data 

centers and its disaster recovery center. 

Market Makers may request additional 

Limited Service MEI Ports for which 

they are assessed a $100 monthly fee for 

each additional Limited Service MEI 

Port for each matching engine. 

The Exchange now proposes to move 

from a flat monthly fee per additional 

Limited Service MEI Port for each 

matching engine to a tiered-pricing 

structure per additional Limited Service 

MEI Ports for each matching engine 

under which the monthly fee would 

vary depending on the number of 

additional Limited Service MEI Ports 

the Market Maker elects to purchase. 

Specifically, the Exchange will continue 

to provide the first and second 

additional Limited Service MEI Ports for 

each matching engine free of charge, as 

described above, per the initial 

allocation of Limited Service MEI Ports 

that Market Makers receive. 

Specifically, (i) the third and fourth 

additional Limited Service MEI Ports for 

each matching engine will increase from 

the current flat monthly fee of $100 to 

$200 per port; (ii) the fifth and sixth 

additional Limited Service MEI Ports for 

engine matching engine will increase 

from the current flat monthly fee of 

$100 to $300 per port; and (iii) the 

seventh to the twelfth additional 

Limited Service MEI Ports will increase 

from the current monthly flat fee of 

$100 to $400 per port (collectively, the 

‘‘Proposed Access Fees’’). 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 9

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 10 in 

particular, in that it provides for the 

equitable allocation of reasonable dues, 

fees and other charges among Exchange 

Members and issuers and other persons 

using any facility or system which the 

Exchange operates or controls. The 

Exchange also believes the proposal 

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

of the Act 11 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 notes that it operates in 

a highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive. In such an environment, the 

Exchange must continually adjust its 

fees for services and products, in 

addition to order flow, to remain 

competitive with other exchanges. The 

Exchange believes that the proposed 

changes reflect this competitive 

environment. 

The Exchange believes the proposal to 

move from a flat fee per month to a 

tiered-pricing structure is reasonable, 

equitably allocated and not unfairly 

discriminatory because the Exchange 

believes the proposed structure would 

encourage firms to be more economical 

and efficient in the number of 

additional Limited Service MEI Ports 

they purchase. The Exchange believes 

this will enable the Exchange to better 

monitor and provide access to the 

Exchange’s network to ensure sufficient 

capacity and headroom in the System. 

The Exchange notes that the firms that 

are primarily order routers seeking bestexecution do not utilize Limited Service 

MEI Ports on MIAX Emerald. Therefore, 

the fees described in the proposed 

tiered-pricing structure will only be 

allocated to market making firms that 

engage in advanced trading strategies 

and typically request multiple Limited 

Service MEI Ports. Accordingly, the 

firms engaged in market making 

business generate higher costs by 

utilizing more of the Exchange’s 

resources. The market making firms that 

purchase higher amounts of Limited 

Service MEI Ports tend to have specific 

business oriented market making and 

taking strategies, as opposed to firms 

simply engaging in best-execution order 

routing business. The use of such 

additional Limited Service MEI Ports is 

entirely voluntary. 

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 increase 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 imposes 

various access fees for market 

participants to access an exchange’s 

marketplace. The Exchange deems port 

fees to be access fees. It records these 

fees as part of its ‘‘Access Fees’’ revenue 


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46728 Federal Register / Vol. 86, No. 158 / Thursday, August 19, 2021 / Notices 

12See 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). 

13See 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’’). 

14See Securities Exchange Act Release Nos. 

90981 (January 25, 2021), 86 FR 7582 (January 29, 

2021) (SR–PEARL–2021–01) (proposal to increase 

connectivity fees); 90980 (January 25, 2021), 86 FR 

7602 (January 29, 2021) (SR–MIAX–2021–02) 

(proposal to increase connectivity fees). 

15See ‘‘The market at a glance,’’ available at 

https://www.miaxoptions.com/ (last visited July 31, 

2021). 

in its financial statements. The 

Exchange believes that it is important to 

demonstrate that these fees are based on 

its costs and reasonable business needs. 

The Exchange believes the Proposed 

Access Fees will allow the Exchange to 

offset expense the Exchange has and 

will incur, and that the Exchange is 

providing sufficient transparency (as 

described below) into how the Exchange 

determined to charge such fees. 

Accordingly, the Exchange is providing 

an analysis of its revenues, costs, and 

profitability associated with the 

Proposed Access Fees. This analysis 

includes information regarding its 

methodology for determining the costs 

and revenues associated with the 

Proposed Access Fees. 

In order to determine the Exchange’s 

costs to provide the access services 

associated with the Proposed Access 

Fees, the Exchange conducted an 

extensive cost review in which the 

Exchange analyzed every expense item 

in the Exchange’s general expense 

ledger to determine whether each such 

expense relates to the Proposed Access 

Fees, and, if such expense did so relate, 

what portion (or percentage) of such 

expense actually supports the access 

services. The sum of all such portions 

of expenses represents the total cost of 

the Exchange to provide the access 

services associated with the Proposed 

Access Fees. For the avoidance of doubt, 

no expense amount was allocated twice. 

The Exchange is also providing 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 access services associated 

with the Proposed Access Fees. 

In order to determine the Exchange’s 

projected revenues associated with the 

Proposed Access Fees, the Exchange 

analyzed the number of Market Makers 

currently utilizing Limited Service MEI 

Ports, and, utilizing a recent monthly 

billing cycle representative of 2021 

monthly revenue, extrapolated 

annualized revenue on a going-forward 

basis. The Exchange does not believe it 

is appropriate to factor into its analysis 

future revenue growth or decline into its 

projections for purposes of these 

calculations, given the uncertainty of 

such projections due to the continually 

changing access needs of market 

participants, discounts that can be 

achieved due to lower trading volume 

and vice versa, market participant 

consolidation, etc. Additionally, the 

Exchange similarly does not factor into 

its analysis future cost growth or 

decline. The Exchange is presenting its 

revenue and expense associated with 

the Proposed Access 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 

Access Fees were not in place in 2020 

or for the first seven months of 2021, the 

Exchange believes its 2020 Audited 

Unconsolidated Financial Statement is 

not useful for analyzing the 

reasonableness of the total annual 

revenue and costs associated with the 

Proposed Access Fees. Accordingly, the 

Exchange believes it is more appropriate 

to analyze the Proposed Access 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 

Access Fees are fair and reasonable 

because they will not result in excessive 

pricing or supra-competitive profit 

when comparing the Exchange’s total 

annual expense associated with 

providing the services associated with 

the Proposed Access Fees versus the 

total projected annual revenue the 

Exchange will collect for providing 

those services. 

* * * * * 

On March 29, 2019, the Commission 

issued its 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 

Non-Participants Who Connect to the 

BOX Network (the ‘‘BOX Order’’).12 On 

May 21, 2019, the Commission issued 

the Staff Guidance on SRO Rule Filings 

Relating to Fees.13 Accordingly, the 

Exchange believes that the Proposed 

Access 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 PEARL, LLC (‘‘MIAX 

Pearl’’) and Miami International 

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

establish or increase other nontransaction fees.14 Accordingly, the 

Exchange believes that the Commission 

should find that the Proposed Access 

Fees are consistent with the Act. 

* * * * * 

As of July 31, 2021, the Exchange had 

a market share of only 4.15% of the U.S. 

equity options industry for the month of 

July 2021.15 The Exchange is not aware 

of any evidence that a market share of 

approximately 4–5% provides the 

Exchange with anti-competitive pricing 

power. If the Exchange were to attempt 

to establish unreasonable pricing, then 

no market participant would join or 

access the Exchange, and existing 

market participants would discontinue 

all or some of their access services. 

Separately, the Exchange is not aware 

of any reason why market participants 

could not simply drop their access (or 

not initially access an exchange) if an 

exchange were to establish prices for its 

non-transaction fees that, in the 

determination of such market 

participant, did not make business or 

economic sense for such market 

participant to access such exchange. No 

options market participant is required 

by rule, regulation, or competitive forces 

to be a Member of the Exchange. As 

evidence of the fact that market 

participants can and do drop their 

access to exchanges based on nontransaction fee pricing, R2G Services 

LLC (‘‘R2G’’) filed a comment letter after 

BOX’s proposed rule changes to 

increase its connectivity fees (SR–BOX– 

2018–24, SR–BOX–2018–37, and SR– 

BOX–2019–04). The R2G Letter stated, 

‘‘[w]hen BOX instituted a $10,000/ 

month price increase for connectivity; 

we had no choice but to terminate 

connectivity into them as well as 

terminate our market data relationship. 

The cost benefit analysis just didn’t 

make any sense for us at those new 

levels.’’ Similarly, the Exchange noted 

in a recent filing that once MIAX 

Emerald issued a notice that it was 

instituting MEI Port fees, among other 


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16See Securities Exchange Act Release No. 91460 

(April 2, 2021), 86 FR 18349 (April 8, 2021) (SR– 

EMERALD–2021–11) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

To Amend Its Fee Schedule To Adopt Port Fees, 

Increase Certain Network Connectivity Fees, and 

Increase the Number of Additional Limited Service 

MIAX Emerald Express Interface Ports Available to 

Market Makers) (adopting tiered MEI Port fee 

structure ranging from $5,000 to $20,500 per 

month). 

17The Exchange has not yet finalized its 2021 

year end results. 

18The 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. 

19For 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. 

20 In fact, on October 22, 2019, the Exchange was 

notified by SFTI that it is again raising its fees 

charged to the Exchange by approximately 11%, 

without having to show that such fee change 

complies with the Act by being reasonable, 

equitably allocated, and not unfairly 

discriminatory. It is unfathomable to the Exchange 

that, given the critical nature of the infrastructure 

services provided by SFTI, that its fees are not 

required to be rule-filed with the Commission 

pursuant to Section 19(b)(1) of the Act and Rule 

19b–4 thereunder. See 15 U.S.C. 78s(b)(1) and 17 

CFR 240.19b–4, respectively. 

non-transaction fees, one MIAX Emerald 

Member dropped its access to MIAX 

Emerald as a result of those fees.16

Accordingly, these examples show that 

if an exchange sets too high of a fee for 

ports and/or other non-transaction fees, 

including other access fees, for its 

relevant marketplace, market 

participants can choose to drop their 

access to such exchange. 

In order to provide more detail and to 

quantify the Exchange’s costs associated 

with providing access to the Exchange 

in general, the Exchange notes that there 

are material costs associated with 

providing the infrastructure and 

headcount to fully-support access to the 

Exchange. The Exchange incurs 

technology expense related to 

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 as the 

services associated with the Proposed 

Access Fees increase. 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 access to its 

System for market participants is not 

fixed. The Exchange believes the 

Proposed Access Fees are reasonable in 

order to offset a portion of the costs to 

the Exchange associated with providing 

access to its network infrastructure. 

The Exchange only has four primary 

sources of revenue: Transaction fees, 

access fees (which includes the 

Proposed Access Fees), regulatory fees, 

and market data fees. Accordingly, the 

Exchange must cover all of its expenses 

from these four primary sources of 

revenue. 

The Exchange believes that the 

Proposed Access Fees are fair and 

reasonable because they will not result 

in excessive pricing or supracompetitive profit, when comparing the 

total annual expense that the Exchange 

projects to incur in connection with 

providing these access services versus 

the total annual revenue that the 

Exchange projects to collect in 

connection with services associated 

with the Proposed Access Fees. For 

2021,17 the total annual expense for 

providing the access services associated 

with the Proposed Access Fees is 

projected to be approximately $0.88 

million. The approximately $0.88 

million in projected total annual 

expense is comprised of the following, 

all of which are directly related to the 

access services associated with the 

Proposed Access Fees: (1) Third-party 

expense, relating to fees paid by the 

Exchange to third-parties 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 Access 

Fees.18 As noted above, the Exchange 

believes it is more appropriate to 

analyze the Proposed Access Fees 

utilizing its 2021 revenue and costs, 

which utilize the same presentation 

methodology as set forth in the 

Exchange’s previously-issued Audited 

Unconsolidated Financial Statements.19

The $0.88 million in projected total 

annual expense is directly related to the 

access services associated with the 

Proposed Access Fees, and not any 

other product or service offered by the 

Exchange. It does not include general 

costs of operating matching systems and 

other trading technology, and no 

expense amount was allocated twice. 

As discussed, the Exchange 

conducted an extensive cost review in 

which the Exchange analyzed expense 

items 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 access services associated 

with the Proposed Access 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. The sum of all such portions 

of expenses represents the total cost of 

the Exchange to provide access services 

associated with the Proposed Access 

Fees. 

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 access services associated 

with the Proposed Access Fees, is 

projected to be $0.05 million. 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; (3) Secure Financial 

Transaction Infrastructure (‘‘SFTI’’),20

which supports connectivity and feeds 

for the entire U.S. options industry; (4) 

various other services providers 

(including Thompson Reuters, NYSE, 

Nasdaq, and Internap), which provide 

content, connectivity services, and 

infrastructure services for critical 

components of options connectivity and 

network services; and (5) 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, only a portion of all fees paid to 

such third-parties is included in the 

third-party expense herein, and no 

expense amount is allocated twice. 

Accordingly, the Exchange does not 

allocate its entire information 

technology and communication costs to 

the access services associated with the 

Proposed Access Fees. 


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The Exchange believes it is reasonable 

to allocate such third-party expense 

described above towards the total cost to 

the Exchange to provide the access 

services associated with the Proposed 

Access 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 access services associated 

with the Proposed Access Fees to its 

Members and their customers. The 

Exchange did not allocate all of the 

Equinix expense toward the cost of 

providing the access services associated 

with the Proposed Access Fees, only 

that portion which the Exchange 

identified as being specifically mapped 

to providing the access services 

associated with the Proposed Access 

Fees, approximately 2.05% of the total 

applicable Equinix expense. The 

Exchange believes this allocation is 

reasonable because it represents the 

Exchange’s actual cost to provide the 

access services associated with the 

Proposed Access Fees, and not any 

other service, as supported by its cost 

review. 

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 access services 

associated with the Proposed Access 

Fees. The Exchange did not allocate all 

of the Zayo expense toward the cost of 

providing the access services associated 

with the Proposed Access Fees, only the 

portion which the Exchange identified 

as being specifically mapped to 

providing the Proposed Access Fees, 

approximately 1.64% of the total 

applicable Zayo expense. The Exchange 

believes this allocation is reasonable 

because it represents the Exchange’s 

actual cost to provide the access 

services associated with the Proposed 

Access Fees, and not any other service, 

as supported by its cost review. 

The Exchange believes it is reasonable 

to allocate the identified portions of the 

SFTI expense and various other service 

providers’ (including Thompson 

Reuters, NYSE, Nasdaq, and Internap) 

expense because those entities provide 

connectivity and feeds for the entire 

U.S. options industry, as well as the 

content, connectivity services, and 

infrastructure services for critical 

components of the network. Without 

these services from SFTI and various 

other service providers, the Exchange 

would not be able to operate and 

support the network and provide access 

to its Members and their customers. The 

Exchange did not allocate all of the SFTI 

and other service providers’ expense 

toward the cost of providing the access 

services associated with the Proposed 

Access Fees, only the portions which 

the Exchange identified as being 

specifically mapped to providing the 

access services associated with the 

Proposed Access Fees, approximately 

2.05% of the total applicable SFTI and 

other service providers’ expense. The 

Exchange believes this allocation is 

reasonable because it represents the 

Exchange’s actual cost to provide the 

access services associated with the 

Proposed Access Fees. 

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 access to its Members and 

their customers. The Exchange did not 

allocate all of the hardware and software 

provider expense toward the cost of 

providing the access services associated 

with the Proposed Access Fees, only the 

portions which the Exchange identified 

as being specifically mapped to 

providing the access services associated 

with the Proposed Access Fees, 

approximately 1.23% of the total 

applicable hardware and software 

provider expense. The Exchange 

believes this allocation is reasonable 

because it represents the Exchange’s 

actual cost to provide the access 

services associated with the Proposed 

Access Fees. 

For 2021, total projected internal 

expense, relating to the internal costs of 

the Exchange to provide the access 

services associated with the Proposed 

Access Fees, is projected to be $0.83 

million. This includes, but is not 

limited to, costs associated with: (1) 

Employee compensation and benefits 

for full-time employees that support the 

access services associated with the 

Proposed Access Fees, including staff in 

network operations, trading operations, 

development, system operations, and 

business that support those employees 

and functions (including an increase as 

a result of the higher determinism 

project); (2) depreciation and 

amortization of hardware and software 

used to provide the access services 

associated with the Proposed Access 

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 access services 

associated with the Proposed Access 

Fees. The breakdown of these costs is 

more fully-described below. For clarity, 

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 

access services associated with the 

Proposed Access Fees. 

The Exchange believes it is reasonable 

to allocate such internal expense 

described above towards the total cost to 

the Exchange to provide the access 

services associated with the Proposed 

Access Fees. In particular, the 

Exchange’s employee compensation and 

benefits expense relating to providing 

the access services associated with the 

Proposed Access Fees is projected to be 

approximately $0.76 million, 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 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 each employee on matters 

relating to the provision of access 

services associated with the Proposed 

Access Fees. Without these employees, 


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the Exchange would not be able to 

provide the access services associated 

with the Proposed Access Fees to its 

Members and their customers. The 

Exchange did not allocate all of the 

employee compensation and benefits 

expense toward the cost of the access 

services associated with the Proposed 

Access Fees, only the portions which 

the Exchange identified as being 

specifically mapped to providing the 

access services associated with the 

Proposed Access Fees, approximately 

7.81% of the total applicable employee 

compensation and benefits expense. The 

Exchange believes this allocation is 

reasonable because it represents the 

Exchange’s actual cost to provide the 

access services associated with the 

Proposed Access Fees, and not any 

other service, as supported by its cost 

review. 

The Exchange’s depreciation and 

amortization expense relating to 

providing the services associated with 

the Proposed Access Fees is projected to 

be $0.06 million, which is only a 

portion of the $3.13 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 access services associated 

with the Proposed Access Fees. Without 

this equipment, the Exchange would not 

be able to operate the network and 

provide the access services associated 

with the Proposed Access Fees to its 

Members and their customers. The 

Exchange did not allocate all of the 

depreciation and amortization expense 

toward the cost of providing the access 

services associated with the Proposed 

Access Fees, only the portion which the 

Exchange identified as being 

specifically mapped to providing the 

access services associated with the 

Proposed Access Fees, approximately 

1.92% of the total applicable 

depreciation and amortization expense, 

as these access services 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 

access services associated with the 

Proposed Access Fees, and not any 

other service, as supported by its cost 

review. 

The Exchange’s occupancy expense 

relating to providing the services 

associated with the Proposed Access 

Fees is projected to be $0.01 million, 

which is only a portion of the $0.52 

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 access 

services associated with the Proposed 

Access Fees. This amount consists 

primarily of rent for the Exchange’s 

Princeton, NJ 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. The Exchange currently has 

approximately 150 employees. 

Approximately two-thirds 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 access services 

associated with the Proposed Access 

Fees. Without this office space, the 

Exchange would not be able to operate 

and support the network and provide 

the access services associated with the 

Proposed Access Fees to its Members 

and their customers. 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 access services associated with the 

Proposed Access Fees. The Exchange 

did not allocate all of the occupancy 

expense toward the cost of providing 

the access services associated with the 

Proposed Access Fees, only the portion 

which the Exchange identified as being 

specifically mapped to operating and 

supporting the network, approximately 

1.93% of the total applicable occupancy 

expense. The Exchange believes this 

allocation is reasonable because it 

represents the Exchange’s cost to 

provide the access services associated 

with the Proposed Access Fees, and not 

any other service, as supported by its 

cost review. 

The Exchange notes that a material 

portion of its total overall expense is 

allocated to the provision of access 

services (including connectivity, ports, 

and trading permits). The Exchange 

believes this is reasonable and in line, 

as the Exchange operates a technologybased business that differentiates itself 

from its competitors based on its trading 

systems that rely on access to a high 

performance network, resulting in 

significant technology expense. Over 

two-thirds of Exchange staff are 

technology-related employees. The 

majority of the Exchange’s expense is 

technology-based. As described above, 

the Exchange has only four primary 

sources of fees to recover their costs; 

thus, the Exchange believes it is 

reasonable to allocate a material portion 

of their total overall expense towards 

access fees. 

Accordingly, based on the facts and 

circumstances presented, the Exchange 

believes that its provision of the access 

services associated with the Proposed 

Access Fees will not result in excessive 

pricing or supra-competitive profit. To 

illustrate, on a going-forward, fullyannualized basis, the Exchange projects 

that annualized revenue for providing 

the access services associated with the 

Proposed Access Fees would be 

approximately $2.07 million per annum, 

based on a recent billing cycle. The 

Exchange projects that its annualized 

expense for providing the services 

associated with the Proposed Access 

Fees will be approximately $0.88 

million per annum. Accordingly, on a 

fully-annualized basis, the Exchange 

believes its total projected revenue for 

providing the access services associated 

with the Proposed Access Fees will not 

result in excessive pricing or supracompetitive profit, as the Exchange will 

make a profit margin of approximately 

58% ($2.07 million in total revenue 

minus $.088 [sic] million in expense = 

$1.19 million in profit per annum). 

Additionally, this profit margin does not 

take into account the cost of capital 

expenditures (‘‘CapEx’’) the Exchange 

projects to spend each year on CapEx 

going forward. 

For the avoidance of doubt, none of 

the expenses included herein relating to 

the access services associated with the 

Proposed Access Fees relate to the 

provision of any other services offered 

by the Exchange or its affiliates. Stated 

differently, no expense amount of the 

Exchange is allocated twice. The 

Exchange notes that, with respect to 

expenses associated with the Exchange’s 

affiliates, MIAX Pearl and MIAX, those 

expenses are accounted for separately 

and are not included within the scope 

of this filing. Stated differently, no 

expense amount of the Exchange is also 

allocated to MIAX Pearl or MIAX. 

The Exchange believes it is 

reasonable, equitable and not unfairly 

discriminatory to allocate the respective 


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21See supra note 13. 

22See id. 

23See Cboe BZX Exchange, Inc. (‘‘BZX’’) Options 

Fee Schedule, Options Logical Port Fees, Ports with 

Bulk Quoting Capabilities (charging $1,500/month 

for the 1st and 2nd port, $2,500/month for the 3rd 

port or more); Cboe Exchange, Inc. (‘‘Cboe’’) Fee 

Schedule, Logical Connectivity Fees (charging 

$750/month per port for BOE/FIX Logical Ports 1 

to 5 and $800/month per port for BOE/FIX Logical 

Ports greater than 5; charging $1,500/month per 

port for BOE Bulk Logical Ports 1 to 5, $2,500/ 

month per port for BOE Bulk Logical Ports 6 to 30, 

and $3,000/month per port for BOE Bulk Logical 

Ports greater than 30); The Nasdaq Stock Market 

LLC (‘‘Nasdaq’’), Options 7, Pricing Schedule, 

Section 3 Nasdaq Options Market—Ports and Other 

Services (charging $1,500/month per port for first 

5 ports, $1,000/month per port for the next 15 ports, 

and $500/month per port for all ports over 20). 

24See Exchange Rule 210. The Sponsored User is 

subject to the fees, if any, of the Sponsoring 

Member. The Exchange notes that the Sponsoring 

Member is not required to publicize, let alone 

justify or file with the Commission its fees, and as 

such could charge the Sponsored User any fees it 

deems appropriate, even if such fees would 

otherwise be considered supra-competitive, or 

otherwise potentially unreasonable or 

uncompetitive. 

25See Securities Exchange Act Release No. 90333 

(November 4, 2020), 85 FR 71666 (November 10, 

2020) (SR–CBOE–2020–105) (the ‘‘Cboe Fee 

Filing’’). The Cboe Fee Filing cited to the October 

2020 Active Broker Dealer Report, provided by the 

Commission’s Office of Managing Executive, on 

October 8, 2020. 

26 Id. 

percentages of each expense category 

described above towards the total cost to 

the Exchange of operating and 

supporting the network, including 

providing the access services associated 

with the Proposed Access Fees because 

the Exchange performed a line-by-line 

item analysis of all the expenses of the 

Exchange, and has determined the 

expenses that directly relate to 

providing access to the Exchange. 

Further, the Exchange notes that, 

without the specific third-party and 

internal items listed above, the 

Exchange would not be able to provide 

the access services associated with the 

Proposed Access Fees to its 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 

access services. The Proposed Access 

Fees are intended to recover the 

Exchange’s costs of providing access to 

its System. Accordingly, the Exchange 

believes that the Proposed Access Fees 

are fair and reasonable because they do 

not result in excessive pricing or supracompetitive profit, when comparing the 

actual costs to the Exchange versus the 

projected annual revenue from the 

Proposed Access Fees. 

The Exchange believes the proposed 

changes are reasonable, equitably 

allocated and not unfairly 

discriminatory, and do not result in a 

‘‘supra-competitive’’ 21 profit. Of note, 

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

exceed the profits that can be obtained 

in a competitive market.22 With the 

proposed changes, the Exchange 

anticipates it will have a profit margin 

of approximately 58% based on the 

Proposed Access Fees. Based on the 

2020 Audited Financial Statements of 

competing options exchanges (since the 

2021 Audited Financial Statements will 

likely not become publicly available 

until early July 2022, after the Exchange 

has submitted this filing), the 

Exchange’s profit margin is similar to or 

below the operating profit margins of 

other competing exchanges. For 

example, Nasdaq ISE, LLC’s (‘‘ISE’’) 

operating profit margin for all of 2020 

was approximately 85%; Nasdaq PHLX 

LLC’s (‘‘PHLX’’) operating profit margin 

for all of 2020 was approximately 49%; 

Nasdaq’s operating profit margin for all 

of 2020 was approximately 62%; NYSE 

Arca, Inc.’s (‘‘Arca’’) operating profit 

margin for all of 2020 was 

approximately 55%; NYSE American 

LLC’s (‘‘Amex’’) operating profit margin 

for all of 2020 was approximately 59%; 

Cboe’s operating profit margin for all of 

2020 was approximately 74%; and 

BZX’s operating profit margin for all of 

2020 was approximately 52%. 

The Exchange further believes its 

proposed fees are reasonable, equitably 

allocated and not unfairly 

discriminatory because the Exchange 

believes that it benefits overall 

competition in the marketplace to allow 

relatively new entrants like the 

Exchange and its affiliates, MIAX Pearl 

and MIAX, to propose fees that may 

help these new entrants recoup their 

substantial investment in building out 

costly infrastructure. The Exchange and 

its affiliates have historically set their 

fees purposefully low in order to attract 

business and market share. The 

Exchange notes that the concept of a 

tiered-pricing structure for ports is not 

new or novel.23

The Exchange notes that it operates in 

a highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive. In such an environment, the 

Exchange must continually adjust its 

fees for services and products, in 

addition to order flow, to remain 

competitive with other exchanges. The 

Exchange believes that the proposed 

changes reflect this competitive 

environment. 

The Exchange believes the proposal to 

move from a flat fee per month to a 

tiered-pricing structure is reasonable, 

equitably allocated and not unfairly 

discriminatory because the Exchange 

believes the proposed structure would 

encourage firms to be more economical 

and efficient in the number of Limited 

Service MEI Ports they purchase. The 

Exchange believes this will enable the 

Exchange to better monitor and provide 

access to the Exchange’s network in 

order to ensure that the Exchange meets 

its obligations under the Act such that 

access to the Exchange is offered on 

terms that are not unfairly 

discriminatory, as well as to ensure 

sufficient capacity and headroom in the 

System. 

There is also no regulatory 

requirement that any market participant 

access any one options exchange, that 

each Market Maker access the Exchange 

utilizing more than the two free Limited 

Service MEI Ports that the Exchange 

provides, access the Exchange in a 

particular capacity, or trade any 

particular product offered on the 

Exchange. Moreover, membership is not 

a requirement to participate on the 

Exchange. A market participant may 

submit orders to the Exchange via a 

Sponsored User.24 Indeed, the Exchange 

is unaware of any one options exchange 

whose membership includes every 

registered broker-dealer. Based on a 

recent analysis conducted by Cboe, as of 

October 21, 2020, only three (3) of the 

broker-dealers, out of approximately 250 

broker-dealers, were members of at least 

one exchange that lists options for 

trading and were members of all 16 

options exchanges.25 Additionally, the 

Cboe Fee Filing found that several 

broker-dealers were members of only a 

single exchange that lists options for 

trading and that the number of members 

at each exchange that trades options 

varies greatly.26

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

With respect to intra-market 

competition, the Exchange does not 

believe that the proposed rule change 

would place certain market participants 

at the Exchange at a relative 

disadvantage compared to other market 

participants or affect the ability of such 

market participants to compete. As 

stated above, the Exchange does not 

believe its proposed pricing will impose 


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27 15 U.S.C. 78s(b)(3)(A)(ii). 

28 17 CFR 240.19b–4(f)(2). 

29 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

a barrier to entry to smaller participants 

and notes that the proposed pricing 

structure for is associated with relative 

usage of the various market participants. 

Firms that are primarily order routers 

seeking best-execution do not utilize 

Limited Service MEI Ports on MIAX 

Emerald and therefore will not pay the 

fees associated with the tiered-pricing 

structure. Rather, the fees described in 

the proposed tiered-pricing structure 

will only be allocated to market making 

firms that engage in advanced trading 

strategies and typically request multiple 

Limited Service MEI Ports. Accordingly, 

the firms engaged in market making 

business generate higher costs by 

utilizing more of the Exchange’s 

resources. The market making firms that 

purchase higher amounts of Limited 

Service MEI Ports tend to have specific 

business oriented market making and 

taking strategies, as opposed to firms 

simply engaging in best-execution order 

routing business. Additionally, the use 

of such additional Limited Service MEI 

Ports is entirely voluntary. 

The Exchange also does not believe 

that the proposed rule change will result 

in any burden on inter-market 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. As discussed 

above, options market participants are 

not forced to access all options 

exchanges. The Exchange operates in a 

highly competitive environment, and as 

discussed above, its ability to price 

access and ports is constrained by 

competition among exchanges and third 

parties. There are other options markets 

of which market participants may access 

in order to trade options. There is also 

a possible range of alternative strategies, 

including routing to the exchange 

through another participant or market 

center or accessing the Exchange 

indirectly. For example, there are 15 

other U.S. options exchanges, which the 

Exchange must consider in its pricing 

discipline in order to compete for 

market participants. In this competitive 

environment, market participants are 

free to choose which competing 

exchange to use to satisfy their business 

needs. As a result, the Exchange 

believes this proposed rule change 

permits fair competition among national 

securities exchanges. Accordingly, the 

Exchange does not believe its proposed 

fee changes impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

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,27 and Rule 

19b–4(f)(2) 28 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– 

EMERALD–2021–25 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–2021–25. 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–2021–25 and 

should be submitted on or before 

September 9, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–17759 Filed 8–18–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92667; File No. SR–NYSE– 

2020–98] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Granting Approval of Proposed Rule 

Change, as Modified by Amendment 

Nos. 2 and 3, To Amend Its Rules To 

Prohibit Member Organizations From 

Seeking Reimbursement, in Certain 

Circumstances, From Issuers for 

Forwarding Proxy and Other Materials 

to Beneficial Owners 

August 13, 2021. 

I. Introduction 

On November 30, 2020, New York 

Stock Exchange LLC (‘‘NYSE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend its rules to prohibit member 

organizations from seeking 

reimbursement, in certain 

circumstances, from issuers for 


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