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14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3AIS market data feed includes: Opening 

imbalance condition information; opening routing 

information; Expanded Quote Range information, as 

provided in MIAX Rule 503(f)(5); Post-Halt 

Notification, as provided in MIAX Rule 504(d); and 

Liquidity Refresh condition information, as 

provided in MIAX Rule 515(c)(2). This additional 

information (the ‘‘administrative information’’) is 

included in the ToM feed and is not top of market 

information. The administrative information is also 

currently available to MIAX Market Makers via 

connectivity with the MIAX Express Interface 

(‘‘MEI’’), for which they are assessed connectivity 

fees. 

4Third party vendors are subscribers of MIAX’s 

market and other data feeds, which they in turn use 

for redistribution purposes. Third party vendors do 

not provide connectivity and therefore are not 

subject to Network testing and certification. 

5A Service Bureau is a technology provider that 

offers and supplies technology and technology 

services to a trading firm that does not have its own 

proprietary system. The technology and technology 

services supplied by Service Bureaus includes both 

software applications and connectivity, thus 

Service Bureaus are subject to both API testing and 

certification and Network testing and certification. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MIAX–2014–50 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MIAX–2014–50. 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 Web site (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 Web site 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; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–MIAX– 

2014–50 and should be submitted on or 

before November 6, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24542 Filed 10–15–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73326; File No. SR–MIAX– 

2014–51] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the MIAX Options 

Fee Schedule 

October 9, 2014. 

Pursuant to the provisions of Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on September 29, 2014, Miami 

International Securities Exchange LLC 

(‘‘MIAX’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

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

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the MIAX Options Fee Schedule. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.miaxoptions.com/filter/

wotitle/rule_filing, at MIAX’s principal 

office, and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Fee Schedule to reduce several testing 

and certification fees, and System 

connectivity fees for non-Members. 

Specifically, the Exchange proposes to: 

(i) Eliminate the Member and nonMember API testing and certification fee 

for AIS; 3 (ii) eliminate the non-Member 

networking connectivity fee for AIS; (iii) 

eliminate the AIS Port fees; (iv) add a 

monthly fee for Internal Distributors and 

External Distributors of AIS; and (v) 

clarify that non-Member fees that apply 

to Third Party Vendors and Service 

Bureaus also apply to other nonMembers. 

API Testing and Certification 

The Exchange assesses a one-time 

Application Programming Interface 

(‘‘API’’) testing and certification fee on 

Members and non-Members for AIS. 

Specifically, the Exchange assesses a 

one-time API Testing and Certification 

fee of $1,000.00 Members and $1,000.00 

on third party vendors 4 and Service 

Bureaus 5 whose software interfaces 

with MIAX software in order to receive 

the AIS market data feed. The API 

makes it possible for third party 

vendors’ and Service Bureaus’ software 

to communicate with MIAX software 

applications, and is subject to testing 

with, and certification by, the Exchange. 

The Exchange plans on migrating the 

AIS data feed to a multicast data format 

and thus will no longer need to assess 


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6An Internal Distributor is an organization that 

subscribes to the Exchange for the use of ToM, and 

is permitted by agreement with the Exchange to 

provide ToM data to internal users (i.e., users 

within their own organization). 

7An External Distributor is an organization that 

subscribes to the Exchange for the use of ToM, and 

is permitted by agreement with the Exchange to 

provide ToM data to both internal users and to 

external users (i.e., users outside of their own 

organization). 

8The Exchange notes that in a companion filing 

that the Exchange proposes to eventually to remove 

messages related to administrative information and 

Liquidity Seeking Events (‘‘LSE’’) from ToM and 

MEI and add them to the AIS data feed to the extent 

that they are not already included in AIS. See SR– 

MIAX–2014–53. Thus, waiving the fees for Internal 

Distributors and External Distributors of AIS will 

allow market participants that subscribe to ToM to 

continue to receive administrative information and 

LSE related messages at no additional cost than 

what is currently being assessed today. 

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

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

11Securities Exchange Act Release No. 51808 

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

API Testing and Certification fees to 

market participants that receive AIS. 

Therefore, the Exchange proposes to 

eliminate the API testing and 

certification fee for both Members and 

non-Members because the Exchange 

will no longer offer the AIS data feed in 

a format that necessitates API testing 

and certification. 

AIS Port Fees 

The Exchange assesses monthly AIS 

Port fees for the use of AIS Ports, which 

provide the connectivity necessary to 

receive the AIS from the MIAX System. 

The Exchange assesses monthly AIS 

Port fees based on the number of 

Exchange matching engines to which a 

subscriber connects. Specifically, the 

Exchange assesses a monthly AIS Port 

fee of $1,000.00 for the first matching 

engine on which an AIS has two ports, 

$250.00 each for the second through 

fifth matching engines on which an AIS 

has two ports, and $125.00 each for the 

sixth matching engine and any 

additional engines on which the AIS has 

the two ports. As mentioned above, the 

Exchange plans on migrating the AIS 

data feed to a multicast data format and 

thus will no longer needs to assess API 

Port fees to market participants that 

receive AIS. Therefore, the Exchange 

proposes to eliminate the AIS Port fees 

because the Exchange will no longer 

offer the AIS data feed in a format that 

necessitates the use of AIS Ports. 

Internal Distributors and External 

Distributors 

The Exchange proposes to charge 

monthly fees to Distributors of the AIS 

market data product that receive a feed 

of AIS data either directly from MIAX 

or indirectly through another entity and 

then distributes it either internally 

(within that entity) or externally 

(outside that entity). The monthly 

Distributor Fee charged depends on 

whether the Distributor is an ‘‘Internal 

Distributor’’ 6 or an ‘‘External 

Distributor’’.7 The Exchange will assess 

Internal Distributor’s a monthly fee of 

$1,000.00 and External Distributor’s a 

monthly fee of $1,500.00 for the AIS 

market data product. The Exchange 

notes that all Distributors are required to 

execute a MIAX Distributor Agreement. 

The fees for AIS will be reduced for new 

Distributors for the first month during 

which they subscribe to AIS, based on 

the number of trading days that have 

been held during the month prior to the 

date on which they subscribe. Such new 

Distributors will be assessed a pro-rata 

percentage of the fees described above, 

which is the percentage of the number 

of trading days remaining in the affected 

calendar month as of the date on which 

they begin to receive the AIS feed, 

divided by the total number of trading 

days in the affected calendar month. 

The monthly fee for Internal 

Distributors and External Distributors of 

AIS will be waived if they also 

subscribe to the ToM market data 

product. The Exchange believes that 

waiving the fees for Internal Distributors 

and External Distributors of AIS will 

encourage additional market 

participants that currently subscribe to 

ToM to use the service to receive 

administrative information.8

Finally, the Exchange proposes to 

amend the Fee Schedule in several 

places to clarify that non-Member fees 

that apply to Third Party Vendors and 

Service Bureaus also apply to other nonMembers. The Exchange believes that 

this change may reduce the potential for 

confusion by market participants as to 

which type of non-Members the nonMember fees apply to. The Exchange 

also believes that clarification may 

encourage more non-Members, other 

than Third Party Vendors and Service 

Bureaus, to use the Exchange’s market 

data products. 

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 is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. 

The Exchange believes the proposed 

changes to eliminate several fees are 

reasonable in that they are designed to 

correspond with the migration of the 

data feed to a new format that no longer 

necessitates the fees being assessed. The 

Exchange anticipates the changes will 

result in a reasonable allocation of its 

costs and expenses among its Members 

and other persons using its facilities 

because the proposed fees would enable 

the Exchange to recover the costs 

associated with providing such 

infrastructure, and with offering access 

through the network connections and 

access and services, responding to 

customer requests, configuring MIAX 

systems, and administering the various 

services [sic] connectivity services. The 

Exchange believes the proposed fees are 

equitable and not unfairly 

discriminatory because the new fee 

levels result in a more reasonable and 

equitable allocation of fees amongst 

non-Members and Members for similar 

services. Access to the Exchange is 

provided on fair and non-discriminatory 

terms. Moreover, the decision as to 

whether or not to subscribe to AIS is 

entirely optional to all parties. Potential 

subscribers are not required to purchase 

the AIS market data feed. Subscribers 

can discontinue their use at any time 

and for any reason, including due to 

their assessment of the reasonableness 

of fees charged. The allocation of fees 

among subscribers is fair and reasonable 

because, if the market deems the 

proposed fees to be unfair or 

inequitable, firms can diminish or 

discontinue their use of this data. 

In adopting Regulation NMS, the 

Commission granted self-regulatory 

organizations and broker-dealers 

increased authority and flexibility to 

offer new and unique market data to the 

public. It was believed that this 

authority would expand the amount of 

data available to consumers, and also 

spur innovation and competition for the 

provision of market data: 

[E]fficiency is promoted when brokerdealers who do not need the data beyond the 

prices, sizes, market center identifications of 

the NBBO and consolidated last sale 

information are not required to receive (and 

pay for) such data when broker-dealers may 

choose to receive (and pay for) additional 

market data based on their own internal 

analysis of the need for such data.11

By removing ‘‘unnecessary regulatory 

restrictions’’ on the ability of exchanges 

to sell their own data, Regulation NMS 

advanced the goals of the Act and the 

principles reflected in its legislative 

history. If the free market should 

determine whether proprietary data is 

sold to broker-dealers at all, it follows 

that the price at which such data is sold 

should be set by the market as well. 

In July, 2010, Congress adopted H.R. 

4173, the Dodd-Frank Wall Street 

Reform and Consumer Protection Act of 


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12NetCoalition, at 15 (quoting H.R. Rep. No. 94– 

229, at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 

321, 323). 

2010 (‘‘Dodd-Frank Act’’), which 

amended Section 19 of the Act. Among 

other things, Section 916 of the DoddFrank Act amended paragraph (A) of 

Section 19(b)(3) of the Act by inserting 

the phrase ‘‘on any person, whether or 

not the person is a member of the selfregulatory organization’’ after ‘‘due, fee 

or other charge imposed by the selfregulatory organization.’’ As a result, all 

SRO rule proposals establishing or 

changing dues, fees or other charges are 

immediately effective upon filing 

regardless of whether such dues, fees or 

other charges are imposed on members 

of the SRO, non-members, or both. 

Section 916 further amended paragraph 

(C) of Section 19(b)(3) of the Act to read, 

in pertinent part, ‘‘At any time within 

the 60-day period beginning on the date 

of filing of such a proposed rule change 

in accordance with the provisions of 

paragraph (1) [of Section 19(b)], the 

Commission summarily may 

temporarily suspend the change in the 

rules of the self-regulatory organization 

made thereby, 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 this title. If the Commission 

takes such action, the Commission shall 

institute proceedings under paragraph 

(2)(B) [of Section 19(b)] to determine 

whether the proposed rule should be 

approved or disapproved.’’ 

The Exchange believes that these 

amendments to Section 19 of the Act 

reflect Congress’s intent to allow the 

Commission to rely upon the forces of 

competition to ensure that fees for 

market data are reasonable and 

equitably allocated. Although Section 

19(b) had formerly authorized 

immediate effectiveness for a ‘‘due, fee 

or other charge imposed by the selfregulatory organization,’’ the 

Commission adopted a policy and 

subsequently a rule stating that fees for 

data and other products available to 

persons that are not members of the selfregulatory organization must be 

approved by the Commission after first 

being published for comment. At the 

time, the Commission supported the 

adoption of the policy and the rule by 

pointing out that unlike members, 

whose representation in self-regulatory 

organization governance was mandated 

by the Act, non-members should be 

given the opportunity to comment on 

fees before being required to pay them, 

and that the Commission should 

specifically approve all such fees. The 

Exchange believes that the amendment 

to Section 19 reflects Congress’s 

conclusion that the evolution of selfregulatory organization governance and 

competitive market structure have 

rendered the Commission’s prior policy 

on non-member fees obsolete. 

Specifically, many exchanges have 

evolved from member-owned, not-forprofit corporations into for-profit, 

investor-owned corporations (or 

subsidiaries of investor-owned 

corporations). Accordingly, exchanges 

no longer have narrow incentives to 

manage their affairs for the exclusive 

benefit of their members, but rather 

have incentives to maximize the appeal 

of their products to all customers, 

whether members or non-members, so 

as to broaden distribution and grow 

revenues. Moreover, the Exchange 

believes that the change also reflects an 

endorsement of the Commission’s 

determinations that reliance on 

competitive markets is an appropriate 

means to ensure equitable and 

reasonable prices. Simply put, the 

change reflects a presumption that all 

fee changes should be permitted to take 

effect immediately, since the level of all 

fees are constrained by competitive 

forces. The Exchange therefore believes 

that the fees for AIS are properly 

assessed on non-member Distributors. 

The decision of the United States 

Court of Appeals for the District of 

Columbia Circuit in NetCoaliton v. SEC, 

No. 09–1042 (D.C. Cir. 2010), although 

reviewing a Commission decision made 

prior to the effective date of the DoddFrank Act, upheld the Commission’s 

reliance upon competitive markets to set 

reasonable and equitably allocated fees 

for market data: 

In fact, the legislative history indicates that 

the Congress intended that the market system 

‘evolve through the interplay of competitive 

forces as unnecessary regulatory restrictions 

are removed’ and that the SEC wield its 

regulatory power ‘in those situations where 

competition may not be sufficient,’ such as 

in the creation of a ‘consolidated 

transactional reporting system.’ 12

The court’s conclusions about 

Congressional intent are therefore 

reinforced by the Dodd-Frank Act 

amendments, which create a 

presumption that exchange fees, 

including market data fees, may take 

effect immediately, without prior 

Commission approval, and that the 

Commission should take action to 

suspend a fee change and institute a 

proceeding to determine whether the fee 

change should be approved or 

disapproved only where the 

Commission has concerns that the 

change may not be consistent with the 

Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Notwithstanding its determination 

that the Commission may rely upon 

competition to establish fair and 

equitably allocated fees for market data, 

the NetCoalition Court found that the 

Commission had not, in that case, 

compiled a record that adequately 

supported its conclusion that the market 

for the data at issue in the case was 

competitive. The Exchange believes that 

a record may readily be established to 

demonstrate the competitive nature of 

the market in question. 

There is intense competition between 

trading platforms that provide 

transaction execution and routing 

services and proprietary data products. 

Transaction execution and proprietary 

data products are complementary in that 

market data is both an input and a 

byproduct of the execution service. In 

fact, market data and trade execution are 

a representative example of joint 

products with joint costs. The decision 

whether and on which platform to post 

an order will depend on the attributes 

of the platform where the order can be 

posted, including the execution fees, 

data quality and price and distribution 

of its data products. Without the 

prospect of a taking order seeing and 

reacting to a posted order on a particular 

platform, the posting of the order would 

accomplish little. 

Without trade executions, exchange 

data products cannot exist. Data 

products are valuable to many end 

subscribers only insofar as they provide 

information that end subscribers expect 

will assist them or their customers in 

making trading decisions. The costs of 

producing market data include not only 

the costs of the data distribution 

infrastructure, but also the costs of 

designing, maintaining, and operating 

the exchange’s transaction execution 

platform and the cost of regulating the 

exchange to ensure its fair operation and 

maintain investor confidence. The total 

return that a trading platform earns 

reflects the revenues it receives from 

both products and the joint costs it 

incurs. Moreover, an exchange’s 

customers view the costs of transaction 

executions and of data as a unified cost 

of doing business with the exchange. A 

broker-dealer will direct orders to a 

particular exchange only if the expected 

revenues from executing trades on the 

exchange exceed net transaction 

execution costs and the cost of data that 

the broker-dealer chooses to buy to 

support its trading decisions (or those of 

its customers). The choice of data 


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products is, in turn, a product of the 

value of the products in making 

profitable trading decisions. If the cost 

of the product exceeds its expected 

value, the broker-dealer will choose not 

to buy it. 

Moreover, as a broker-dealer chooses 

to direct fewer orders to a particular 

exchange, the value of the product to 

the broker-dealer decreases, for two 

reasons. First, the product will contain 

less information, because executions of 

the broker-dealer’s orders will not be 

reflected in it. Second, and perhaps 

more important, the product will be less 

valuable to that broker-dealer because it 

does not provide information about the 

venue to which it is directing its orders. 

Data from the competing venue to 

which the broker-dealer is directing 

orders will become correspondingly 

more valuable. 

Thus, a super-competitive increase in 

the fees charged for either transactions 

or data has the potential to impair 

revenues from both products. ‘‘No one 

disputes that competition for order flow 

is ‘fierce’.’’ However, the existence of 

fierce competition for order flow 

implies a high degree of price sensitivity 

on the part of broker-dealers with order 

flow, since they may readily reduce 

costs by directing orders toward the 

lowest-cost trading venues. A brokerdealer that shifted its order flow from 

one platform to another in response to 

order execution price differentials 

would both reduce the value of that 

platform’s market data and reduce its 

own need to consume data from the 

disfavored platform. Similarly, if a 

platform increases its market data fees, 

the change will affect the overall cost of 

doing business with the platform, and 

affected broker-dealers will assess 

whether they can lower their trading 

costs by directing orders elsewhere and 

thereby lessening the need for the more 

expensive data. 

Analyzing the cost of market data 

distribution in isolation from the cost of 

all of the inputs supporting the creation 

of market data will inevitably 

underestimate the cost of the data. Thus, 

because it is impossible to create data 

without a fast, technologically robust, 

and well-regulated execution system, 

system costs and regulatory costs affect 

the price of market data. It would be 

equally misleading, however, to 

attribute all of the exchange’s costs to 

the market data portion of an exchange’s 

joint product. Rather, all of the 

exchange’s costs are incurred for the 

unified purposes of attracting order 

flow, executing and/or routing orders, 

and generating and selling data about 

market activity. The total return that an 

exchange earns reflects the revenues it 

receives from the joint products and the 

total costs of the joint products. 

Competition among trading platforms 

can be expected to constrain the 

aggregate return each platform earns 

from the sale of its joint products, but 

different platforms may choose from a 

range of possible, and equally 

reasonable, pricing strategies as the 

means of recovering total costs. For 

example, some platforms may choose to 

pay rebates to attract orders, charge 

relatively low prices for market 

information (or provide information free 

of charge) and charge relatively high 

prices for accessing posted liquidity. 

Other platforms may choose a strategy 

of paying lower rebates (or no rebates) 

to attract orders, setting relatively high 

prices for market information, and 

setting relatively low prices for 

accessing posted liquidity. In this 

environment, there is no economic basis 

for regulating maximum prices for one 

of the joint products in an industry in 

which suppliers face competitive 

constraints with regard to the joint 

offering. This would be akin to strictly 

regulating the price that an automobile 

manufacturer can charge for car sound 

systems despite the existence of a highly 

competitive market for cars and the 

availability of aftermarket alternatives to 

the manufacturer-supplied system. 

The market for market data products 

is competitive and inherently 

contestable because there is fierce 

competition for the inputs necessary to 

the creation of proprietary data and 

strict pricing discipline for the 

proprietary products themselves. 

Numerous exchanges compete with 

each other for listings, trades, and 

market data itself, providing virtually 

limitless opportunities for entrepreneurs 

who wish to produce and distribute 

their own market data. This proprietary 

data is produced by each individual 

exchange, as well as other entities, in a 

vigorously competitive market. 

Broker-dealers currently have 

numerous alternative venues for their 

order flow, including eleven existing 

options markets. Each SRO market 

competes to produce transaction reports 

via trade executions. Competitive 

markets for order flow, executions, and 

transaction reports provide pricing 

discipline for the inputs of proprietary 

data products. The large number of 

SROs that currently produce proprietary 

data or are currently capable of 

producing it provides further pricing 

discipline for proprietary data products. 

Each SRO is currently permitted to 

produce proprietary data products, and 

many in addition to MIAX currently do, 

including NASDAQ, CBOE, ISE, NYSE 

Amex, and NYSEArca. Additionally, 

order routers and market data vendors 

can facilitate single or multiple brokerdealers’ production of proprietary data 

products. The potential sources of 

proprietary products are virtually 

limitless. 

Market data vendors provide another 

form of price discipline for proprietary 

data products because they control the 

primary means of access to end 

subscribers. Vendors impose price 

restraints based upon their business 

models. For example, vendors such as 

Bloomberg and Thomson Reuters that 

assess a surcharge on data they sell may 

refuse to offer proprietary products that 

end subscribers will not purchase in 

sufficient numbers. Internet portals, 

such as Google, impose a discipline by 

providing only data that will enable 

them to attract ‘‘eyeballs’’ that 

contribute to their advertising revenue. 

Retail broker-dealers, such as Schwab 

and Fidelity, offer their customers 

proprietary data only if it promotes 

trading and generates sufficient 

commission revenue. Although the 

business models may differ, these 

vendors’ pricing discipline is the same: 

They can simply refuse to purchase any 

proprietary data product that fails to 

provide sufficient value. The Exchange 

and other producers of proprietary data 

products must understand and respond 

to these varying business models and 

pricing disciplines in order to market 

proprietary data products successfully. 

In addition to the competition and 

price discipline described above, the 

market for proprietary data products is 

also highly contestable because market 

entry is rapid, inexpensive, and 

profitable. The history of electronic 

trading is replete with examples of 

entrants that swiftly grew into some of 

the largest electronic trading platforms 

and proprietary data producers: 

Archipelago, BATS Trading and Direct 

Edge. Regulation NMS, by deregulating 

the market for proprietary data, has 

increased the contestability of that 

market. While broker-dealers have 

previously published their proprietary 

data individually, Regulation NMS 

encourages market data vendors and 

broker-dealers to produce proprietary 

products cooperatively in a manner 

never before possible. Multiple market 

data vendors already have the capability 

to aggregate data and disseminate it on 

a profitable scale, including Bloomberg, 

and Thomson Reuters. 

The Court in NetCoalition concluded 

that the Commission had failed to 

demonstrate that the market for market 

data was competitive based on the 

reasoning of the Commission’s 

NetCoalition order because, in the 

Court’s view, the Commission had not 


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13 15 U.S.C. 78s(b)(3)(A)(ii). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

adequately demonstrated that the 

proprietary data at issue in the case is 

used to attract order flow. The Exchange 

believes, however, that evidence not 

then before the court clearly 

demonstrates that availability of data 

attracts order flow. Due to competition 

among platforms, the Exchange intends 

to improve its platform data offerings on 

a continuing basis, and to respond 

promptly to customers’ data needs. 

The intensity of competition for 

proprietary information is significant 

and the Exchange believes that this 

proposal itself clearly evidences such 

competition. The Exchange is offering 

AIS in order to keep pace with changes 

in the industry and evolving customer 

needs. It is entirely optional and is 

geared towards attracting new Member 

Applicants and customers. MIAX 

competitors continue to create new 

market data products and innovative 

pricing in this space. The Exchange 

expects to see firms challenge its pricing 

on the basis of the Exchange’s explicit 

fees being higher than the zero-priced 

fees from other competitors such as 

BATS. In all cases, the Exchange 

expects firms to make decisions on how 

much and what types of data to 

consume on the basis of the total cost of 

interacting with MIAX or other 

exchanges. Of course, the explicit data 

fees are only one factor in a total 

platform analysis. Some competitors 

have lower transactions fees and higher 

data fees, and others are vice versa. The 

market for this proprietary information 

is highly competitive and continually 

evolves as products develop and 

change. 

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.13 At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MIAX–2014–51 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MIAX–2014–51. 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 Web site (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 Web site 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; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–MIAX– 

2014–51 and should be submitted on or 

before November 6, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24540 Filed 10–15–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73327; File No. SR–CBOE– 

2014–072] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fees 

Schedule 

October 9, 2014. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on October 

1, 2014, Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Fees Schedule. The text of the proposed 

rule change is available on the 

Exchange’s Web site (http://

www.cboe.com/AboutCBOE/

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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


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