49384 Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices 

69 15 U.S.C. 78q–1(b)(3)(F); 15 U.S.C. 78q– 

1(b)(3)(G); 15 U.S.C. 78q–1(b)(3)(H); 17 CFR 

240.17Ad–22(e)(1), (e)(2)(i), (e)(6)(ii), (e)(10), (e)(13), 

(e)(14), (e)(17)(i), and (e)(18). 

70 15 U.S.C. 78s(b)(2). 

71 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

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

72 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). A proposed rule change 

may take effect upon filing with the Commission if 

it is designated by the exchange as ‘‘establishing or 

changing a due, fee, or other charge imposed by the 

self-regulatory organization on any person, whether 

or not the person is a member of the self-regulatory 

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

4See Securities Exchange Act Release Nos. 92364 

(July 9, 2021), 86 FR 37364 (July 15, 2021) (SR– 

MIAX–2021–29) (‘‘MIAX Notice’’); 92360 (July 9, 

2021), 86 FR 37373 (July 15, 2021) (SR–EMERALD– 

2021–22) (‘‘MIAX Emerald Notice’’); 92363 (July 9, 

2021), 86 FR 37376 (July 15, 2021) (SR–PEARL– 

2021–30) (‘‘MIAX Pearl Notice’’). For ease of 

reference, citations to statements generally 

applicable to all three notices are to the MIAX 

Notice. 

5Comment on the proposed rule changes can be 

found at: https://www.sec.gov/comments/sr-miax2021-29/srmiax202129.htm; https://www.sec.gov/ 

comments/sr-emerald-2021-22/ 

sremerald202122.htm; https://www.sec.gov/ 

comments/sr-pearl-2021-30/srpearl202130.htm. 

6 15 U.S.C. 78s(b)(3)(C). 

7See, e.g., MIAX Notice, supra note 4, at 37365. 

8See MIAX Options Fee Schedule, Section 

(5)(d)(ii), footnote 30; MIAX Emerald Options Fee 

Schedule, Section (5)(d)(ii); MIAX Pearl Options 

Fee Schedule, Definitions Section. 

9See, e.g., MIAX Notice, supra note 4, at 37365. 

10See MIAX Notice, supra note 4, at 37365. 

11See MIAX Emerald Notice, supra note 4, at 

37374; MIAX Pearl Notice, supra note 4, at 37377. 

12 15 U.S.C. 78s(b)(3)(C). 

13 15 U.S.C. 78s(b)(1). 

14See 17 CFR 240.19b–4 (General Instructions for 

Form 19b–4—Information to be Included in the 

Complete Form—Item 3 entitled ‘‘Self-Regulatory 

Organization’s Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule Change’’). 

15See id. 

16 15 U.S.C. 78f(b)(4). 

17 15 U.S.C. 78f(b)(5). 

Amendment No. 1, is consistent with 

the requirements of the Act, and in 

particular, with the requirements of 

Sections 17A(b)(3)(F), 17A(b)(3)(G), and 

17A(b)(3)(H) of the Act, and Rules 

17Ad–22(e)(1), (e)(2)(i), 17Ad– 

22(e)(6)(ii), 17Ad–22(e)(10), 17Ad– 

22(e)(13), 17Ad–22(e)(14), 17Ad– 

22(e)(17)(i), and (e)(18).69

It is therefore ordered pursuant to 

Section 19(b)(2) of the Act 70 that the 

proposed rule change, as modified by 

Partial Amendment No. 1 (SR–ICEEU– 

2021–010), be, and hereby is, 

approved.71

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.72

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2021–18941 Filed 9–1–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92792; File Nos. SR–MIAX– 

2021–29, SR–EMERALD–2021–22, SR– 

PEARL–2021–30] 

Self-Regulatory Organizations; Miami 

International Securities Exchange, 

LLC, MIAX Emerald, LLC, and MIAX 

PEARL, LLC; Suspension of and Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove 

Proposed Rule Changes To Amend 

Fees for Purge Ports 

August 27, 2021. 

I. Introduction 

On July 1, 2021, Miami International 

Securities Exchange, LLC (‘‘MIAX’’), 

MIAX Emerald, LLC (‘‘MIAX Emerald), 

and MIAX PEARL, LLC (‘‘MIAX Pearl’’) 

(each an ‘‘Exchange;’’ collectively, the 

‘‘Exchanges’’) each filed with the 

Securities and Exchange Commission 

(‘‘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 

increase fees for purge ports. Each 

proposed rule change was immediately 

effective upon filing with the 

Commission pursuant to Section 

19(b)(3)(A) of the Act.3 The proposed 

rule changes were published for 

comment in the Federal Register on July 

15, 2021.4 The Commission has received 

comment on the proposals.5 Pursuant to 

Section 19(b)(3)(C) of the Act,6 the 

Commission is hereby: (1) Temporarily 

suspending File Nos. SR–MIAX–2021– 

29, SR–EMERALD–2021–22, and SR– 

PEARL–2021–30; and (2) instituting 

proceedings to determine whether to 

approve or disapprove File Nos. SR– 

MIAX–2021–29, SR–EMERALD–2021– 

22, and SR–PEARL–2021–30. 

II. Description of the Proposed Rule 

Changes 

Each Exchange currently provides 

certain of its members the option to 

purchase purge ports to assist in their 

quoting activity.7 Purge ports provide 

the ability to send quote purge messages 

to an Exchange’s system.8 Each 

Exchange offers purge ports as a 

package; a member has the option to 

receive up to two purge ports per 

matching engine to which it connects.9

MIAX has 24 matching engines, and 

thus a member may receive up to 48 

purge ports on MIAX.10 MIAX Emerald 

and MIAX Pearl each have 12 matching 

engines, and thus a member may receive 

up to 24 purge ports on these 

Exchanges.11

MIAX and MIAX Emerald previously 

charged a flat fee of $1,500 per month 

for purge ports, and MIAX Pearl 

previously charged a flat fee of $750 per 

month for purge ports, regardless of the 

number of matching engines to which a 

member connected and consequently 

regardless of the number of purge ports 

allocated to the member. Each Exchange 

proposes to increase the flat monthly fee 

to $7,500. 

III. Suspension of the Proposed Rule 

Changes 

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

Act,12 at any time within 60 days of the 

date of filing of an immediately effective 

proposed rule change pursuant to 

Section 19(b)(1) of the Act,13 the 

Commission summarily may 

temporarily suspend the change in the 

rules of a self-regulatory organization 

(‘‘SRO’’) if it appears to the Commission 

that such action is necessary or 

appropriate in the public interest, for 

the protection of investors, or otherwise 

in furtherance of the purposes of the 

Act. As described below, the 

Commission believes a temporary 

suspension of the proposed rule changes 

is necessary and appropriate to allow for 

additional analysis of the proposed rule 

changes’ consistency with the Act and 

the rules thereunder. 

When an exchange files a proposed 

rule change with the Commission, 

including fee filings, it is required to 

provide a statement supporting the 

proposal’s basis under the Act and the 

rules and regulations thereunder 

applicable to the exchange.14 The 

instructions to Form 19b–4, on which 

exchanges file their proposed rule 

changes, specify that such statement 

‘‘should be sufficiently detailed and 

specific to support a finding that the 

proposed rule change is consistent with 

[those] requirements.’’ 15

Section 6 of the Act, including 

Sections 6(b)(4), (5), and (8), requires, 

among other things, that the rules of an 

exchange: (1) Provide for the equitable 

allocation of reasonable fees among 

members, issuers, and other persons 

using the exchange’s facilities; 16 (2) be 

designed to perfect the mechanism of a 

free and open market and a national 

market system and to protect investors 

and the public interest, and not be 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers; 17 and (3) 

not impose any burden on competition 


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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices 49385 

18 15 U.S.C. 78f(b)(8). 

19See, e.g., MIAX Notice, supra note 4, at 37365– 

66. 

20See id. at 37366. 

21See id. 

22See id. at 37365–66. 

23See id. at 37365. 

24See id. 

25See MIAX Notice, supra note 4, at 37365. 

26See MIAX Emerald Notice, supra note 4, at 

37374; MIAX Pearl Notice, supra note 4, at 37377. 

27See, e.g., MIAX Notice, supra note 4, at 37365. 

28See letter from Brian Sopinsky, General 

Counsel, Susquehanna International Group, LLP, 

dated August 5, 2021 (‘‘SIG Letter’’). 

29See SIG Letter, supra note 28, at 2. 

30See id. 

31See id. 

32See id. 

33See 15 U.S.C. 78f(b)(4), (5), and (8), 

respectively. 

34For purposes of temporarily suspending the 

proposed rule changes, the Commission has 

considered the proposed rules’ impact on 

efficiency, competition, and capital formation. See 

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

35 15 U.S.C. 78s(b)(3)(C). Once the Commission 

temporarily suspends a proposed rule change, 

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

Commission institute proceedings under Section 

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

change should be approved or disapproved. 

36 15 U.S.C. 78s(b)(2)(B). 

37 15 U.S.C. 78s(b)(2)(B). Section 19(b)(2)(B) of the 

Act also provides that proceedings to determine 

whether to disapprove a proposed rule change must 

be concluded within 180 days of the date of 

publication of notice of the filing of the proposed 

rule change. See id. The time for conclusion of the 

proceedings may be extended for up to 60 days if 

the Commission finds good cause for such 

extension and publishes its reasons for so finding, 

or if the exchange consents to the longer period. See 

id. 

38 15 U.S.C. 78f(b)(4). 

not necessary or appropriate in 

furtherance of the purposes of the Act.18

In support of their proposals, the 

Exchanges state that the use of purge 

ports is completely optional, and no 

options market participant is required 

by rule, regulation, or competitive forces 

to use them.19 The Exchanges explain 

that members can use other protocols to 

purge or cancel messages, and that 

purge ports were designed as an 

optional service to enable firms to 

manage their quoting risk and meet their 

heightened quoting obligations.20 The 

Exchanges state that they are not aware 

of any reason why a market participant 

could not simply drop its purge ports if 

the Exchanges were to establish 

unreasonable prices for purge ports that, 

in the determination of such market 

participant, did not make business or 

economic sense for such participant.21

The Exchanges also state that they 

operate in a highly competitive 

environment, and if an exchange sets 

non-transaction fees that are too high for 

its relevant marketplace, market 

participants can choose to no longer 

access that particular exchange.22

The Exchanges further state that the 

increased monthly flat fee for purge 

ports is competitive with fees charged 

by other exchanges that offer 

comparable purge port services.23 The 

Exchanges state that they have 

historically undercharged for purge 

ports as compared to other exchanges, 

and that the proposed monthly fee 

increase would bring the Exchanges’ 

fees more in line with that of other 

options exchanges.24 The Exchanges 

argue that, when calculated on a per 

purge port basis, other exchanges charge 

higher monthly fees. MIAX states that, 

assuming a member receives 48 purge 

ports (two per each of its 24 matching 

engines), this results in a cost of $156.25 

per purge port ($7,500 divided by 48).25

MIAX Emerald and MIAX Pearl state 

that, assuming a member receives 24 

purge ports (two per each of their 12 

matching engines), this results in a cost 

of $312.50 per purge port ($7,500 

divided by 24).26 The Exchanges state 

that Cboe BZX Exchange, Inc. (‘‘BZX’’), 

Cboe EDGX Exchange, Inc. (‘‘EDGX’’), 

Cboe Exchange, Inc. (‘‘Cboe’’), and 

Nasdaq GEMX, LLC (‘‘GEMX’’) charge 

higher monthly per purge port fees of 

$750, $750, $850, and $1,250, 

respectively.27

The one comment letter received to 

date challenges several of the 

Exchanges’ assertions.28 The commenter 

states that the Exchanges’ argument that 

the proposed $7,500 monthly fee is 

lower on a per purge port basis than the 

fees assessed by other exchanges (BZX, 

EDGX, Cboe, GEMX) is disingenuous, 

because each of these other exchanges 

has one matching engine, and thus 

market participants require only two 

purge ports on each of these exchanges, 

resulting in significantly lower fees 

when calculated on a monthly basis.29

The commenter also states that the 

Exchanges’ argument that purge ports 

are optional functionality, which 

members are free to drop if priced too 

high, is without merit.30 The commenter 

asserts that the Exchanges know that 

market makers have no choice but to 

absorb these fees so as not to imperil 

their business with stale quotes.31 The 

commenter further states that the 

Exchanges did not provide any 

justification for the fee increase itself; 

and that the Exchanges likely cannot 

assert that the cost of maintaining purge 

ports has increased at all, let alone fivefold.32

In temporarily suspending the 

Exchanges’ proposed rule changes, the 

Commission intends to further consider 

whether the proposed purge port fees 

are consistent with the statutory 

requirements applicable to a national 

securities exchange under the Act. In 

particular, the Commission will 

consider whether the proposed rule 

changes satisfy the standards under the 

Act and the rules thereunder requiring, 

among other things, that an exchange’s 

rules provide for the equitable 

allocation of reasonable fees among 

members, issuers, and other persons 

using its facilities; are designed to 

perfect the mechanism of a free and 

open market and a national market 

system and to protect investors and the 

public interest, and are not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers; 

and do not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.33

Therefore, the Commission finds that 

it is appropriate in the public interest, 

for the protection of investors, and 

otherwise in furtherance of the purposes 

of the Act, to temporarily suspend the 

proposed rule changes.34

IV. Proceedings To Determine Whether 

To Approve or Disapprove the 

Proposed Rule Changes 

In addition to temporarily suspending 

the proposal, the Commission also 

hereby institutes proceedings pursuant 

to Sections 19(b)(3)(C) 35 and 19(b)(2)(B) 

of the Act 36 to determine whether the 

Exchanges’ proposed rule changes 

should be approved or disapproved. 

Institution of proceedings does not 

indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, the 

Commission seeks and encourages 

interested persons to provide additional 

comment on the proposed rule changes 

to inform the Commission’s analysis of 

whether to approve or disapprove the 

proposed rule changes. 

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

Act,37 the Commission is providing 

notice of the grounds for possible 

disapproval under consideration: 

• Whether the Exchanges have 

demonstrated how the proposed fees are 

consistent with Section 6(b)(4) of the 

Act, which requires that the rules of a 

national securities exchange ‘‘provide 

for the equitable allocation of reasonable 

dues, fees, and other charges among its 

members and issuers and other persons 

using its facilities’’; 38

• Whether the Exchanges have 

demonstrated how the proposed fees are 

consistent with Section 6(b)(5) of the 

Act, which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

‘‘perfect the mechanism of a free and 

open market and a national market 


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49386 Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices 

39 15 U.S.C. 78f(b)(5). 

40 15 U.S.C. 78f(b)(8). 

41See SIG Letter, supra note 28. 

42See id. at 2. 

43 17 CFR 201.700(b)(3). 

44See id. 

45See id. 

46See 15 U.S.C. 78f(b)(4), (5), and (8). 

47 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act 

grants the Commission flexibility to determine what 

type of proceeding—either oral or notice and 

opportunity for written comments—is appropriate 

for consideration of a particular proposal by an 

SRO. See Securities Acts Amendments of 1975, 

Report of the Senate Committee on Banking, 

Housing and Urban Affairs to Accompany S. 249, 

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

48 15 U.S.C. 78s(b)(3)(C). 

49 17 CFR 200.30–3(a)(57) and (58). 

system’’ and ‘‘protect investors and the 

public interest,’’ and not be ‘‘designed 

to permit unfair discrimination between 

customers, issuers, brokers, or 

dealers’’; 39 and 

• Whether the Exchanges have 

demonstrated how the proposed fees are 

consistent with Section 6(b)(8) of the 

Act, which requires that the rules of a 

national securities exchange ‘‘not 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of [the Act].’’ 40

As discussed in Section III above, the 

Exchanges made various arguments in 

support of the proposal, and the 

Commission received comment 

disputing the Exchanges’ arguments and 

expressing concerns regarding the 

proposal.41 In particular, the commenter 

argues that the Exchanges did not 

provide sufficient information to 

establish that the proposed fees are 

consistent with the Act and the rules 

thereunder.42

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the [Act] and the rules 

and regulations issued thereunder . . . 

is on the [SRO] that proposed the rule 

change.’’ 43 The description of a 

proposed rule change, its purpose and 

operation, its effect, and a legal analysis 

of its consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,44 and 

any failure of an SRO to provide this 

information may result in the 

Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Act and the applicable rules 

and regulations.45

The Commission is instituting 

proceedings to allow for additional 

consideration and comment on the 

issues raised herein, including as to 

whether the proposal is consistent with 

the Act, and specifically, with its 

requirements that the rules of a national 

securities exchange provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

members, issuers, and other persons 

using its facilities; are designed to 

perfect the mechanism of a free and 

open market and a national market 

system, and to protect investors and the 

public interest; are not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers; 

and do not impose a burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act; 46 as well as any 

other provision of the Act, or the rules 

and regulations thereunder. 

V. Commission’s Solicitation of 

Comments 

The Commission requests written 

views, data, and arguments with respect 

to the concerns identified above as well 

as any other relevant concerns. Such 

comments should be submitted by 

September 23, 2021. Rebuttal comments 

should be submitted by October 7, 2021. 

Although there do not appear to be any 

issues relevant to approval or 

disapproval that would be facilitated by 

an oral presentation of views, data, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4, any 

request for an opportunity to make an 

oral presentation.47

The Commission asks that 

commenters address the sufficiency and 

merit of the Exchanges’ statements in 

support of the proposals, in addition to 

any other comments they may wish to 

submit about the proposed rule changes. 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the proposed rule 

changes, including whether the 

proposed rule changes are 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 Nos. SR– 

MIAX–2021–29, SR–EMERALD–2021– 

22, and SR–PEARL–2021–30 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 

Nos. SR–MIAX–2021–29, SR– 

EMERALD–2021–22, and SR–PEARL– 

2021–30. These file numbers 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 

changes that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule changes 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 Exchanges. 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 Nos. 

SR–MIAX–2021–29, SR–EMERALD– 

2021–22, and SR–PEARL–2021–30 and 

should be submitted on or before 

September 23, 2021. Rebuttal comments 

should be submitted by October 7, 2021. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,48 that File 

Nos. SR–MIAX–2021–29, SR– 

EMERALD–2021–22, and SR–PEARL– 

2021–30 be, and hereby are, temporarily 

suspended. In addition, the Commission 

is instituting proceedings to determine 

whether the proposed rule changes 

should be approved ordisapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.49

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2021–18944 Filed 9–1–21; 8:45 am] 

BILLING CODE 8011–01–P 


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