23000 Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 

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

2 17 CFR 240.19b–4. 

3See, generally, Exchange Rule 531(d). 

4See Securities Exchange Act Release No. 94335 

(March 1, 2022), 87 FR 12756 (March 7, 2022) (SR– 

EMERALD–2021–38) (Notice of Filing of 

Amendment No. 1 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 1, To Amend Exchange Rule 

531 To Provide for a New Service Called the High 

Precision Network Time Signal Service). 

5See Exchange Rule 531(d). 

6The Exchange did not provide a new 

connectivity option to receive time signals via the 

Service. The Service is not a connectivity product 

and subscribers would only need to utilize an 

existing connectivity method offered by the 

Exchange to utilize the Service. See Fee Schedule, 

Section 5, System Connectivity Fees, for 

information regarding 1 Gb connectivity. 

7See supra note 4 for a detailed description of the 

Service. See also MIAX Emerald Options—Update: 

The Introduction of the High Precision Network 

Time Signal (Enhanced PTP/White Rabbit) 

Beginning April 1, 2022 (March 3, 2022), available 

at https://www.miaxoptions.com/alerts/2022/03/03/ 

miax-emerald-options-update-introduction-highprecision-network-time-signal. 

8An Enhanced PTP clock synchronization device 

captures time and coordinates time synchronization 

within a network at a sub-nanosecond level. 

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

10 15 U.S.C. 78f(b)(5). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94697; File No. SR– 

EMERALD–2022–12] 

Self-Regulatory Organizations; MIAX 

Emerald, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the MIAX 

Emerald Fee Schedule To Adopt Fees 

for the High Precision Network Time 

Signal Service 

April 12, 2022. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on March 30, 

2022, 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 MIAX Emerald Fee Schedule 

(the ‘‘Fee Schedule’’) to adopt fees for a 

new service known as the ‘‘High 

Precision Network Time Signal 

Service.’’ 3

The text of the proposed rule change 

is available on the Exchange’s website at 

https://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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange recently established a 

new service known as the ‘‘High 

Precision Network Time Signal Service’’ 

(‘‘HPNTSS’’ or the ‘‘Service’’),4 which 

will be available for purchase by 

subscribers on a voluntary basis. The 

Exchange now proposes to adopt fees 

for the Service, which is described 

under Exchange Rule 531(d).5 The 

Service is an optional product available 

to any firm that chooses to subscribe. 

The Exchange proposes to assess a 

monthly fee of $3,600 for subscribing to 

the Service. As such, the Exchange 

proposes to amend the Fee Schedule to 

adopt new Section 8), Services, to 

provide that subscribers may purchase 

the Service for a monthly fee of $3,600. 

Subscribers may cancel their 

subscription at any time. The Exchange 

proposes to specify that for mid-month 

subscriptions to the Service, new 

subscribers will be charged for the full 

calendar month for which they 

subscribe. A second time signal is 

available with each subscription to the 

Service for redundancy and disaster 

recovery purposes. 

In sum, the Service enables 

subscribers to synchronize their own 

primary clock devices to the Exchange’s 

primary clock device, by receiving time 

signals from the Exchange via a 1 gigabit 

(‘‘Gb’’) connection that is currently 

offered by the Exchange and utilized by 

market participants to connect to the 

Exchange’s System.6 The Service simply 

provides subscribers with the 

Exchange’s time signal at a subnanosecond level and nothing else. The 

sub-nanosecond time signal would tell 

the subscriber the Exchange’s time at a 

sub-nanosecond level at a particular 

point in time. The subscriber may then 

use that time signal to synchronize their 

own primary clock to the Exchange’s 

primary clock at the more acute subnanosecond level.7 Subscribers would 

utilize their own Enhanced PTP device 8

to synchronize the clocks within the 

subscriber’s computer and network 

infrastructure, as appropriate, at a subnanosecond level. This would enable 

the subscriber to record certain times an 

order or message traveled through and 

leaves the subscriber’s system at a subnanosecond level. 

The Service is not a connectivity 

product and subscribers are able to 

utilize an existing connectivity method 

offered by the Exchange to utilize the 

Service. The Service simply provides 

enhanced time synchronization that 

may be utilized by a subscriber to adjust 

their own systems. The Service is not a 

market data product or access/ 

connectivity service. Subscribers may 

continue to use their existing methods 

to connect to and send orders to the 

Exchange. The Service will not include 

any trading data regarding the 

subscriber’s activity on the Exchange or 

include any data from other trading 

activity on the Exchange. 

The Exchange established the Service 

in response to demand for tighter and 

more accurate clock synchronization 

options with the Exchange’s network. 

The Service is offered to subscribers on 

a completely voluntary basis in that the 

Exchange is not required by any rule or 

regulation to make the Service available 

and potential subscribers may subscribe 

to the Service only if they voluntarily 

choose to do so. It is a business decision 

of each subscriber whether to subscribe 

to the Service or not. 

The Exchange intends to begin to offer 

the Service and charge the proposed 

fees on April 1, 2022. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,9 in general, and 

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

of the Act,10 in particular, in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, 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 to protect investors and the 


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Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 23001 

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

12 15 U.S.C. 78f(b)(4). 

13See ‘‘The Market at a Glance,’’ (last visited 

March 15, 2022), available at https://

www.miaxoptions.com/. 

14See Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

15The Exchange sends subscribers an 

acknowledgement message that their order or 

message was received by the Exchange. This 

acknowledgement includes the time of receipt at a 

nanosecond level. 

16See, e.g., Chapter III of the Exchange’s Rules, 

which incorporates by reference Rule 301, 

Interpretation and Policy .02 (Just and Equitable 

Principles of Trade), of the Exchange’s affiliate, 

Miami International Securities Exchange, LLC 

(‘‘MIAX’’); and Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) Rule 5320. 

public interest, and that it is not 

designed to permit unfair 

discrimination among customers, 

brokers, or dealers. The Exchange also 

believes that its proposal to adopt fees 

for the Service is consistent with 

Section 6(b) of the Act 11 in general, and 

furthers the objectives of Section 6(b)(4) 

of the Act 12 in particular, in that it is 

an equitable allocation of dues, fees and 

other charges among market 

participants. 

The Exchange operates in a highly 

competitive environment in which 16 

U.S. registered equity options exchanges 

compete for market share. Based on 

publicly available information, no single 

options exchange has more than 13– 

14% of the equity options market share 

and currently the Exchange represents 

only approximately 3.57% of the market 

share.13 The Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining prices, products, and 

services in the securities markets. 

Particularly, in Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and 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.’’ 14

Making products, like the Service, 

available to market participants fosters 

competition in the marketplace, and 

constrains the ability of exchanges to 

charge supra-competitive fees. In the 

event that a market participant views 

one exchange’s product offering as more 

attractive than the competition that 

market participant can, and often does, 

switch between similar products. The 

proposed fees are a result of the 

competitive environment of the U.S. 

options industry as the Exchange seeks 

to adopt fees to attract purchasers of the 

recently introduced Service. 

If the Exchange proposed fees that 

market participants viewed as 

excessively high, then the proposed fees 

would simply serve to reduce demand 

for the Exchange’s Service, which as 

noted, is entirely optional. Other 

options exchanges are also free to 

introduce their own comparable 

products with lower prices to better 

compete with the Exchange’s offering. 

As such, the Exchange believes that the 

proposed fees are reasonable and set at 

a level to compete with other options 

exchanges that may choose to offer 

similar services. Moreover, if a market 

participant views another exchange’s 

potential service as more attractive, then 

such market participant can merely 

choose not to subscribe to the 

Exchange’s Service and instead 

subscribe to another exchange’s similar 

product, which may offer similar data 

points, albeit based on that other 

market’s trading systems. 

The Exchange also believes the 

proposed fees are reasonable as they 

would support the introduction of a 

new product to subscribers. The 

Exchange believes the proposed fees are 

reasonable in order to support the 

introduction of the new Service, which 

may be used for numerous optional 

purposes. For example, the Service 

would allow subscribers to more 

precisely measure latency between their 

network and that of the Exchange at a 

sub-nanosecond level, allowing 

subscribers to better understand the 

times at which their order or message 

reached certain points when traveling 

from their network to the Exchange. The 

Service would also allow subscribers to 

analyze the efficiency of their network 

and connections when not only routing 

orders to the Exchange, but also when 

receiving messages back from the 

Exchange (including communications 

regarding whether their order was 

accepted, rejected, or executed). 

Subscribers utilizing the Service may 

also measure message traversal times by 

comparing their messages’ (e.g., order, 

quote, cancellation) timestamps to the 

Exchange’s matching engine timestamps 

from the Exchange-generated 

acknowledgement messages (e.g., order 

acknowledgment, quote 

acknowledgment, cancellation 

acknowledgment).15 Subscribers would 

then be able to enhance their own 

systems to ensure that they are receiving 

such communications in a timelier 

manner and to verify that their systems 

are working as intended. 

In addition, subscribers may utilize 

these enhanced latency measurements 

to better analyze latencies within their 

own systems and use this analysis to 

optimize their network, models and 

trading patterns to potentially improve 

their interactions with the Exchange. In 

particular, subscribers may use these 

metrics to better assess the health of 

their network and that their systems are 

working as intended. For example, a 

subscriber may use this information 

when analyzing the efficacy of their 

various connections and whether a 

connection is performing as expected or 

experiencing a delay. A subscriber may 

then decide to rebalance the amount of 

orders and/or messages over its various 

connections to ensure each connection 

is operating with maximum efficiency. 

Subscribers may also use the Service for 

other purposes, such as determining 

compliance with certain regulatory 

requirements 16 and trade surveillance. 

Subscribers may also utilize time 

synchronization to assist them in 

evaluating compliance with certain 

clock synchronization requirements. 

The Exchange therefore believes the 

proposed fees are reasonable because of 

the numerous benefits provided to 

subscribers that subscribe to the Service. 

Selling different products and services, 

such as HPNTSS, is also a means by 

which exchanges compete to attract 

business. To the extent that the 

Exchange is successful in attracting 

subscribers for the Service, it may earn 

trading revenues and further enhance 

market participants’ interactions on the 

Exchange, which would increase value 

of its products and services. If the 

market deems the proposed fees to be 

unfair or inequitable, firms can 

diminish or discontinue their use of the 

Service. The Exchange therefore 

believes that the proposed fees for the 

Service reflect the competitive 

environment of U.S. exchanges and 

would be properly assessed to market 

participants that subscribe to the 

Service. The Exchange also believes the 

proposed fees are equitable and not 

unfairly discriminatory as the fees 

would apply equally to all users who 

choose to subscribe to the Service. It is 

a business decision of each market 

participant that chooses to subscribe to 

the Service. The Exchange’s proposed 

fees would not differentiate between 

subscribers that purchase the Service 

and are set at a modest level that would 

allow any interested market participant 

to purchase the Service based on their 

business needs. 

The Exchange reiterates that the 

decision as to whether or not to 

purchase the Service is entirely optional 

for all potential subscribers. Indeed, no 

market participant is required to 

purchase the Service and the Exchange 

is not required to make the Service 

available to all investors. It is entirely a 


khammond on DSKJM1Z7X2PROD with NOTICES
23002 Federal Register / Vol. 87, No. 74 / Monday, April 18, 2022 / Notices 

17 15 U.S.C. 78s(b)(3)(A)(ii). 

18 17 CFR 240.19b–4(f)(2). 19 17 CFR 200.30–3(a)(12). 

business decision of each market 

participant to subscribe to the Service. 

The Exchange offers the Service as a 

convenience to market participants to 

provide them with the ability to 

synchronize their own primary clock 

devices to the Exchange’s primary clock 

device at a sub-nanosecond level. A 

market participant that chooses to 

subscribe to the Service may 

discontinue the use of the Service at any 

time if that market participant 

determines that the synchronization of 

its primary clock devices to the 

Exchange’s primary clock device is no 

longer useful. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange made the Service available in 

order to keep pace with changes in the 

industry and evolving customer needs 

and demands, and believes the product 

will contribute to robust competition 

among national securities exchanges. As 

a result, the Exchange believes this 

proposed rule change permits fair 

competition among national securities 

exchanges. 

The Exchange believes the proposed 

fees would not cause any unnecessary 

or inappropriate burden on intermarket 

competition as other exchanges are free 

to introduce their own comparable 

product with lower prices to better 

compete with the Exchange’s offering. 

The Exchange operates in a highly 

competitive environment, and its ability 

to price the Service is constrained by 

competition among exchanges who 

choose to adopt a similar product. The 

Exchange must consider this in its 

pricing discipline in order to compete 

for market share. For example, 

proposing fees that are excessively 

higher than fees for potentially similar 

products would simply serve to reduce 

demand for the Exchange’s product, 

which as discussed, market participants 

are under no obligation to utilize. In this 

competitive environment, potential 

purchasers are free to choose which, if 

any, similar product to purchase to 

satisfy their need for market 

information. As a result, the Exchange 

believes this proposed rule change 

permits fair competition among national 

securities exchanges. 

The Exchange also believes that the 

proposed fees do not cause any 

unnecessary or inappropriate burden on 

intermarket competition because the 

synchronization of subscribers’ primary 

clock devices with that of the Exchange 

would enhance competition between 

exchanges. Subscribers that subscribe to 

the Service could use the Service to 

adjust their own systems and recalibrate 

their models and trading strategies to 

improve their overall trading experience 

on the Exchange. This may improve the 

Exchange’s overall trading environment 

resulting in increased liquidity and 

order flow on the Exchange. In 

response, other exchanges may similarly 

seek ways to provide synchronized 

clock timestamps in an effort to improve 

their own market quality. 

The Exchange does not believe the 

proposed rule change would cause any 

unnecessary or inappropriate burden on 

intramarket competition. Particularly, 

the proposed product and fees apply 

uniformly to any purchaser in that the 

Exchange does not differentiate between 

subscribers that purchase the Service. 

The proposed fees are set at a modest 

level that would allow any interested 

market participant to purchase the 

Service based on their business needs. 

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,17 and Rule 

19b–4(f)(2) 18 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

EMERALD–2022–12 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–EMERALD–2022–12. 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 (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–EMERALD–2022–12 and 

should be submitted on or before May 

9, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–08173 Filed 4–15–22; 8:45 am] 

BILLING CODE 8011–01–P 


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