Federal Register / Vol. 79, No. 245 / Monday, December 22, 2014 / Notices 76421 

28 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3MIAX initially filed a similar proposal for only 

SPY options on November 25, 2014, and indicated 

in its filing that it would implement the new fee 

on December 1, 2014. See File No. SR–MIAX–2014– 

59. On December 10, 2014, MIAX withdrew that 

filing and submitted this filing. 

4See MIAX Options Fee Schedule, Section (1)(b), 

entitled Marketing Fee for more detail regarding the 

marketing fee. 

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– 

OCC–2014–22 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–OCC–2014–22. 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 OCC and on OCC’s Web site at 

http://www.theocc.com/about/

publications/bylaws.jsp. 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–OCC–2014–22 and should 

be submitted on or before January 12, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29820 Filed 12–19–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73848; File No. SR–MIAX– 

2014–62] 

Self-Regulatory Organizations: Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change by Miami 

International Securities Exchange, LLC 

To Amend the MIAX Options Fee 

Schedule 

December 16, 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 December 10, 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.3 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the MIAX Options Fee Schedule 

(the ‘‘Fee Schedule’’). 

The text of the proposed rule change 

is available on the Exchange’s 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 its 

marketing fee. The marketing fee is 

assessed on certain transactions of all 

Market Makers.4 The funds collected via 

this marketing fee are then put into 

pools controlled by Primary Lead 

Market Makers (‘‘PLMMs’’) and LMMs. 

The PLMM or LMM controlling a 

certain pool of funds can then 

determine the Electronic Exchange 

Member(s) (‘‘EEM’’) to which the funds 

should be directed in order to encourage 

such EEM(s) to send orders to the 

Exchange. In accordance with Exchange 

Rule 514, an EEM can designate an 

order (‘‘Directed Order’’) to a specific 

LMM. 

Currently, Section 1(b) of the Fee 

Schedule, provides that the Exchange 

will assess a Marketing Fee to all Market 

Makers for contracts, including mini 

options, they execute in their assigned 

classes when the contra-party to the 

execution is a Priority Customer. MIAX 

will not assess a Marketing Fee to 

Market Makers for contracts executed as 

a PRIME Agency Order, Contra-side 

Order, or a PRIME AOC Response in the 

PRIME Auction; unless, it executes 

against an unrelated order. 

The Exchange proposes to amend the 

Marketing Fee in order to add an 

additional incentive for order flow 

providers to post additional Priority 

Customer orders on the Exchange’s 

Book. Specifically, the Exchange 

proposes to assess an additional $0.12 

per contract Posted Liquidity Marketing 

Fee to all Market Makers for any 

standard options overlying EEM, GLD, 

IWM, QQQ, and SPY that Market 

Makers execute in their assigned class 

(e.g., SPY) when the contra-party to the 

execution is a Priority Customer and the 

Priority Customer order was posted on 

the Book at the time of the execution. 

MIAX will not assess the additional 

Posted Liquidity Marketing Fee to 

Market Makers for contracts executed as 

a PRIME Agency Order, Contra-side 

Order, or a PRIME AOC Response in the 

PRIME Auction. MIAX will also not 


tkelley on DSK3SPTVN1PROD with NOTICES
76422 Federal Register / Vol. 79, No. 245 / Monday, December 22, 2014 / Notices 

5The Commission notes that MIAX’s proposal 

also covers standard options overlying EEM, GLD, 

IWM, and QQQ. 

6The Commission notes that the symbols MIAX 

lists in this sentence refer to the respective 

overlying options class. 

7See MIAX Fee Schedule, Section 1(b); CBOE, 

Fee Schedule, p. 4; NYSE Amex Options Fee 

Schedule, p. 6. 

8See NYSE Arca, Inc. Fees Schedule, page 4 

(section titled ‘‘Customer Monthly Posting Credit 

Tiers and Qualifications for Executions in Penny 

Pilot Issues’’). 

9See International Securities Exchange, LLC, 

Schedule of Fees, p. 6 (providing reduced fee rates 

for order flow in Select Symbols); NASDAQ OMX 

PHLX, Pricing Schedule, Section I (providing a 

rebate for adding liquidity in SPY); NYSE Arca, Inc. 

Fees Schedule, page 4 (section titled ‘‘Customer 

Monthly Posting Credit Tiers and Qualifications for 

Executions in Penny Pilot Issues’’). 

10The Commission notes that the symbols MIAX 

lists in this sentence refer to the respective 

overlying options class. 

11The Exchange notes that mini options are 

currently listed on SPY, AAPL, GLD, GOOGL, and 

AMZN. If the Exchange were to extend the new 

Marketing Fee to mini options, since there are no 

mini options on EEM, IWM, and QQQ, the 

Exchange would not be able to assess an additional 

marketing fee for mini options in such symbols, but 

instead would be limited to assessing the additional 

fee on SPY and GLD. 

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

13 15 U.S.C. 78f(b)(4). 

14See CBOE, Fee Schedule, p. 4; NYSE Amex 

Options Fee Schedule, p. 6. 

assess the additional Posted Liquidity 

Marketing Fee to Market Makers for 

contracts executed pursuant to a 

Liquidity Refresh Pause, route timer, or 

during the Opening Process. The Post 

[sic] Liquidity Marketing Fee will be in 

addition to the current Marketing Fee of 

$0.25 per contract for standard options 

overlying SPY 5 that Market Makers 

execute in their assigned class (e.g., 

SPY) when the contra-party to the 

execution is a Priority Customer. The 

new proposed Post [sic] Liquidity 

Marketing Fee will otherwise operate in 

a similar manner as the standard 

Marketing Fee, with the additional 

$0.12 per contract going into the broader 

Marketing Fee ‘‘pool’’ for the Directed 

LMM or the PLMM in EEM, GLD, IWM, 

QQQ or SPY, respectively.6

The purpose of the additional 

marketing fee is to further encourage 

Members to post additional Priority 

Customer orders on the Exchange’s 

Book in these high volume symbols. 

Increased Priority Customer orders on 

the Exchange’s Book will provide for 

greater liquidity, which benefits all 

market participants on the Exchange. 

The practice of incentivizing increased 

retail customer order flow in order to 

attract professional liquidity providers 

(Market-Makers) is, and has been, 

commonly practiced in the options 

markets. As such, marketing fee 

programs,7 and customer posting 

incentive programs,8 are based on 

attracting public customer order flow. 

The practice of providing additional 

incentives to increase order flow in high 

volume symbols is, and has been, 

commonly practiced in the options 

markets.9 The proposed marketing fee 

similarly intends to attract Priority 

Customer order flow, which will 

increase liquidity, thereby providing 

greater trading opportunities and tighter 

spreads for other market participants 

and causing a corresponding increase in 

order flow from such other market 

participants in EEM, GLD, IWM, QQQ, 

and SPY.10 Increasing the number of 

orders sent to the Exchange will in turn 

provide tighter and more liquid markets, 

and therefore attract more business 

overall. 

At this time, the Exchange does not 

propose a Post [sic] Liquidity Marketing 

Fee for mini options. Mini options in 

[sic] are not traded in significant volume 

across the industry and, as such, MIAX, 

in consultation with its market makers, 

does not seek to incentivize order 

routers to send such orders to MIAX by 

extending the new marketing fee to 

posted Priority Customer orders in mini 

options on SPY and GLD.11 In addition, 

because of the lack of significant volume 

and limited demand in the industry to 

trade mini options, the Exchange 

believes that having a marketing fee for 

mini options that is in some cases lower 

than the fees for standard contracts, is 

appropriate, not unreasonable, not 

unfairly discriminatory and not 

burdensome on competition between 

participants, or between the Exchange 

and other exchanges in the listed 

options marketplace. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its fee schedule is 

consistent with Section 6(b) of the Act 12

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 13 in 

particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. 

The proposed changes are designed to 

incentivize order flow providers to post 

additional Priority Customer orders in 

EEM, GLD, IWM, QQQ, and SPY 

options on the Exchange’s Book. The 

proposed marketing fee rate is 

reasonable in that although it results in 

a marketing fee that is slightly higher 

than similar marketing fee programs, it 

is still in the range of marketing fee 

programs on other competing exchanges 

which charge lower marketing fees for 

Penny Pilot options classes versus nonPenny Pilot options classes.14 The 

proposed rebate program is fair, 

equitable, and not unreasonably 

discriminatory because it will apply 

equally to all Market Makers that 

execute against Priority Customer orders 

in EEM, GLD, IWM, QQQ, and SPY 

options posted on the Exchange’s Book. 

All similarly situated Market Makers 

that execute against Priority Customer 

orders in EEM, GLD, IWM, QQQ, and 

SPY options that are posted to the 

Exchange’s Book are subject to the same 

marketing fee, and access to the 

Exchange is offered on terms that are 

not unfairly discriminatory. In addition, 

the proposal is equitable and not 

unfairly discriminatory because, while 

only posted Priority Customer order 

flow qualifies for the additional 

marketing fee, an increase in Priority 

Customer orders posted to the 

Exchange’s Book will bring greater 

volume and liquidity as market 

participants compete to trade with the 

additional Priority Customer order flow, 

which benefit all market participants by 

providing more trading opportunities 

and tighter spreads. Market participants 

want to trade with Priority Customer 

order flow. To the extent the posting of 

Priority Customer orders on the 

Exchange’s Book is increased by the 

proposal, market participants will 

increasingly compete for the 

opportunity to trade on the Exchange 

including sending more orders and 

providing narrower and larger sized 

quotations in the effort to trade with 

such Priority Customer order flow. The 

resulting increased volume and 

liquidity will benefit non-Market 

Makers that do not pay the proposed fee 

and do not qualify for the marketing fee 

program at all, by providing more 

trading opportunities and tighter 

spreads as market participants 

increasingly compete by sending more 

orders and providing narrower and 

larger sized quotations in the effort to 

trade with such Priority Customer order 

flow. In addition, the proposed change 

is equitable and not unfairly 

discriminatory because it is designed to 

allow LMMs to encourage greater order 

flow to be sent to the Exchange. The 

Exchange believes it is equitable to 

assess marketing fees on Market Makers 

and not non-Market Makers because the 

benefits of the marketing fee program 

flow to PLMM and Directed LMMs that 

can use the marketing fee funds to 

attract additional flow to the exchange, 

which benefits Market Makers. A LMM 

could be able to amass a greater pool of 

funds with which to use to incent order 

flow providers to send order flow to the 

Exchange. This increased order flow 

would benefit all market participants on 

the Exchange as well. 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 245 / Monday, December 22, 2014 / Notices 76423 

15See CBOE, Fee Schedule, p. 4; NYSE Amex 

Options Fee Schedule, p. 6; International Securities 

Exchange, LLC, Schedule of Fees, p. 6 (providing 

reduced fee rates for order flow in Select Symbols); 

NASDAQ OMX PHLX, Pricing Schedule, Section I 

(providing a rebate for adding liquidity in SPY); 

NYSE Arca, Inc. Fees Schedule, page 4 (section 

titled ‘‘Customer Monthly Posting Credit Tiers and 

Qualifications for Executions in Penny Pilot 

Issues’’). 16 15 U.S.C. 78s(b)(3)(A)(ii). 

The Exchange believes that specifying 

that PRIME Order executions, Liquidity 

Reference Pause, route timer, and 

Opening Process executions are not 

subject to the proposed marketing fee is 

reasonable, equitable and not unfairly 

discriminatory. The Exchange is seeking 

to encourage the posting of additional 

Priority Customer orders to the 

Exchange’s Book and these four 

excluded functionalities involve RFR 

messages that are related to encouraging 

additional trading interest from within 

the market participants on the 

Exchange. The Exchange believes that 

charging additional marketing fees from 

Market Makers in these situations may 

discourage participation in responding 

to RFR messages. The exclusion of 

PRIME Order executions, Liquidity 

Reference Pause, route timer, and 

Opening Process executions from the 

additional marketing fee will continue 

to encourage as many participants as 

possible to respond; which the 

Exchange believes will help the RFR 

message processes to continue to lead to 

greater opportunities for price 

improvement for all orders subject to 

PRIME, the Liquidity Refresh Pause, 

route timer, or Opening Process not just 

those entered on behalf of customers. In 

addition, the Exchange designed the 

new fee to encourage the posting of 

additional Priority Customer orders 

during regular trading hours; which is 

exclusive of the Opening Process. Thus, 

for these reasons, the Exchange believes 

that excluding PRIME Order executions, 

Liquidity Reference Pause, route timer, 

and Opening Process executions from 

the proposed marketing fees is 

reasonable, equitable and not unfairly 

discriminatory. 

The Exchange believes that its 

proposal to assess the additional 

marketing fee for transaction fees in 

EEM, GLD, IWM, QQQ, and SPY 

options, and not other options classes, 

is consistent with other options markets 

that provide additional incentives to 

increase order flow in high volume 

symbols including assessing different 

marketing fees for Penny Pilot options 

classes as compared to non-Penny Pilot 

options classes.15 The Exchange 

believes that establishing different 

pricing for EEM, GLD, IWM, QQQ, and 

SPY options and Penny Pilot options is 

reasonable, equitable, and not unfairly 

discriminatory because EEM, GLD, 

IWM, QQQ, and SPY options are more 

liquid options as compared to other 

Penny Pilot options and the Exchange 

wants to incentivize order flow 

providers to send such orders to MIAX 

in order to increase trading 

opportunities and overall volume 

executed on the Exchange. Finally, the 

Exchange believes that the proposal to 

assess to an additional marketing fee for 

standard transactions and not mini 

options is reasonable because of the lack 

of significant volume and limited 

demand in the industry to trade mini 

options. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. The proposal 

is designed to encourage an increase in 

Priority Customer orders in EEM, GLD, 

IWM, QQQ, and SPY options posted to 

the Exchange’s Book in order to bring 

greater volume and liquidity, which 

benefit all market participants by 

providing more trading opportunities 

and tighter spreads. To the extent the 

posting of Priority Customer orders in 

EEM, GLD, IWM, QQQ, and SPY 

options on the Exchange’s Book is 

increased by the proposal, market 

participants will increasingly compete 

for the opportunity to trade on the 

Exchange including sending more 

orders and providing narrower and 

larger sized quotations in the effort to 

trade with such Priority Customer order 

flow. The resulting increased volume 

and liquidity will benefit non-Market 

Makers that do not pay the proposed fee 

and do not qualify for the marketing fee 

program at all, by providing more 

trading opportunities and tighter 

spreads. To the extent that there is 

additional competitive burden on 

market participants that are not Priority 

Customers or Market Makers or trading 

in other symbols, the Exchange believes 

that this is appropriate because the 

proposal should incent Members to 

direct additional order flow to the 

Exchange and thus provide additional 

liquidity that enhances the quality of its 

markets and increases the volume of 

contracts traded here. To the extent that 

this purpose is achieved, all the 

Exchange’s market participants should 

benefit from the improved market 

liquidity. Enhanced market quality and 

increased transaction volume that 

results from the anticipated increase in 

order flow directed to the Exchange will 

benefit all market participants and 

improve competition on the Exchange. 

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 to remain competitive with other 

exchanges and to attract order flow to 

the Exchange. The Exchange believes 

that the proposed rule change reflects 

this competitive environment because it 

establishes a fee structure in a manner 

that encourages market participants to 

direct their order flow, to provide 

liquidity, and to attract additional 

transaction volume to the Exchange. 

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.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 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–2014–62 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 


tkelley on DSK3SPTVN1PROD with NOTICES
76424 Federal Register / Vol. 79, No. 245 / Monday, December 22, 2014 / Notices 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3MIAX initially filed a similar proposal for only 

SPY options on November 25, 2014, and indicated 

in its filing that it would implement the new fee 

on December 1, 2014. See File No. MIAX–2014–60. 

On December 10, 2014, MIAX withdrew that filing 

and submitted this filing. 

4See MIAX Options Fee Schedule, Section 

(1)(a)(ii). 

5The Commission notes that the symbols MIAX 

lists in this sentence refer to the respective 

overlying options class. 

6 Id. 

7The Exchange notes that in a companion filing, 

the Exchange recently filed to add an additional 

marketing fee of $0.12 per contract for Priority 

Customers in EEM, GLD, IWM, QQQ, and SPY 

options posted on the Exchange’s Book. See MIAX– 

2014–62. 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549. 

All submissions should refer to File 

Number SR–MIAX–2014–62. 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 such 

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– 

2014–62 and should be submitted on or 

before January 12, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29817 Filed 12–19–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73850 ; File No. SR–MIAX– 

2014–63] 

Self-Regulatory Organizations: Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change by Miami 

International Securities Exchange, LLC 

To Amend Its Fee Schedule 

December 16, 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 December 10, 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.3 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 its 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 its 

Fee Schedule to: (i) Adopt a transaction 

fee for options overlying EEM, GLD, 

IWM, QQQ, and SPY executed by nonMIAX Market Makers; and (ii) provide 

an additional incentive for achieving 

certain Priority Customer Rebate 

Program volume tiers. 

The Exchange proposes to adopt a 

$0.55 per contract transaction fee for 

non-MIAX Market Makers for options 

overlying EEM, GLD, IWM, QQQ, and 

SPY. The Exchange notes that the 

transaction fees for non-MIAX Market 

Makers in all other options classes will 

not change and thus will continue to be 

charged the same amount for non-Penny 

Pilot options classes and Penny Pilot 

options classes as they do today. 

The Exchange proposes to offer nonMIAX Market Makers the opportunity to 

reduce transaction fees by $0.02 per 

contract in standard options in EEM, 

GLD, IWM, QQQ, and SPY in the same 

manner as Penny Pilot options classes 

and non-Penny Pilot options classes.4

Specifically, any Member or its affiliates 

of at least 75% common ownership 

between the firms as reflected on each 

firm’s Form BD, Schedule A, that 

qualifies for Priority Customer Rebate 

Program volume tiers 3, 4, or 5 and is 

a non-MIAX Market Maker will be 

assessed $0.53 per contract for standard 

options in EEM, GLD, IWM, QQQ, and 

SPY. The Exchange believes that these 

incentives will encourage non-MIAX 

Market Makers to transact a greater 

number of orders on the Exchange. 

The purpose of the proposed fee 

change is to increase the transaction fee 

for non-MIAX Market Makers in EEM, 

GLD, IWM, QQQ, and SPY 5 so that the 

transaction fees for Market Makers in 

EEM, GLD, IWM, QQQ, and SPY 6

remain lower as compared to non-MIAX 

Market Makers.7 For example, assume 

both member and non-member market 

makers execute against a Priority 

Customer order in SPY posted on the 

Exchange’s book and executes enough 

monthly transaction volume to qualify 

for tier 1 of the Market Maker sliding 

scale: MIAX–MM1 fees = $0.54 [(0.17 

transaction fee) + (0.25 marketing fee) + 

(0.12 posted liquidity marketing fee)] 

and Away-MM2 fees = $0.55. Absent 

this proposal, Away-MM2 would be 

assessed $0.47 per contract which 

would be less than the $0.54 per 

contract of MIAX–MM1. The Exchange 

notes that maintaining this fee 

differential encourages market 

participants to become members and 

register as Market Makers versus 

otherwise sending orders to the 

Exchange as a non-MIAX Market Maker 

in order to avoid a higher transaction 

fee. 

At this time, the Exchange does not 

propose a change in the corresponding 

fees for mini options. Mini options are 

not traded in significant volume across 


tkelley on DSK3SPTVN1PROD with NOTICES