Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 71 

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

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

impose a burden on competition among 

exchanges as they are done for 

regulatory purposes and are therefore 

irrelevant to competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 17 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.18 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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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– 

NASDAQ–2014–123 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549. 

All submissions should refer to File 

Number SR–NASDAQ–2014–123. 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– 

NASDAQ–2014–123 and should be 

submitted on or before January 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30702 Filed 12–31–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73942; File No. SR–MIAX– 

2014–66] 

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 

December 24, 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 December 

19, 2014, Miami International Securities 

Exchange LLC (‘‘MIAX’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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 those 

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 parts 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 increase the monthly 

fee for Internal Distributors and External 

Distributors of MIAX Top of Market 

(‘‘ToM’’) and Administrative 

Information Subscriber (‘‘AIS’’). 

Specifically, the Exchange proposes to: 

(i) Increase the fee charged to Internal 

Distributors of ToM and AIS from 

$1,000 to $1,250 per month; and (ii) 

increase the fee charged to External 

Distributors of ToM and AIS from 

$1,500 to $1,750 per month. 

The Exchange charges monthly fees to 

Distributors of the ToM and AIS market 

data products that receive a feed of data 

either directly from MIAX or indirectly 

through another entity and then 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
72 Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 

3An 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). 

4An 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). 

5The Exchange previously filed to adopt the ToM 

market data product, including a detailed 

description of ToM. See Securities Exchange Act 

Release No. 69007 (February 28, 2013), 78 FR 14617 

(March 6, 2013) (SR–MIAX–2013–05). 

6See NASDAQ OMX PHLX LLC Pricing 

Schedule, Section IX. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(4). 

9Securities Exchange Act Release No. 51808 

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

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’’ 3

or an ‘‘External Distributor.’’ 4 The 

Exchange notes that all Distributors are 

required to execute a MIAX Distributor 

Agreement. 

ToM provides Distributors with a 

direct data feed that includes the 

Exchange’s best bid and offer, with 

aggregate size, and last sale information 

based on displayable order and quoting 

interest on the Exchange, and the PostHalt Notification. The ToM data feed 

includes data that is identical to the 

data sent to the processor for the 

Options Price Regulatory Authority 

(‘‘OPRA’’). The ToM and OPRA data 

leave the MIAX system at the same time, 

as required under Section 5.2(c)(iii)(B) 

of the Limited Liability Company 

Agreement of the Options Price 

Reporting Authority LLC (the ‘‘OPRA 

Plan’’), which prohibits the 

dissemination of proprietary 

information on any more timely basis 

than the same information is furnished 

to the OPRA System for inclusion in 

OPRA’s consolidated dissemination of 

options information.5 The AIS data feed 

includes secondary administrative 

information and liquidity seeking event 

related information. The Exchange notes 

that the monthly fee for Internal 

Distributors and External Distributors of 

AIS is waived if they also subscribe to 

the ToM market data product. 

The Exchange proposes to increase 

the fee charged to Internal Distributors 

of ToM and AIS from $1,000 to $1,250 

per month and increase the fee charged 

to External Distributors of ToM and AIS 

from $1,500 to $1,750 per month in 

order to increase the Exchange’s nontransaction fee revenues. The proposed 

fees for the ToM data feed are in the 

range of similar fees found on another 

exchange; however the fees are slightly 

lower in order to increase the 

intermarket competition for these types 

of data service.6

The Exchange proposes to implement 

the new market data fees beginning 

January 1, 2015. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its fee schedule is 

consistent with Section 6(b) of the Act 7

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 8 in particular, 

in that it is an equitable allocation of 

reasonable fees and other charges among 

Exchange members. 

The Exchange believes the proposed 

fees are a reasonable allocation of its 

costs and expenses among its Members 

and other persons using its facilities 

since it is recovering 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. Access to 

the Exchange is provided on fair and 

non-discriminatory terms. The proposed 

fees for ToM are reasonable since they 

are in the range of similar fees charged 

by another exchange; however, the 

proposed fees are slightly lower in order 

to increase the intermarket competition 

for this type of data service. The 

Exchange believes the proposed fees are 

equitable and not unfairly 

discriminatory because the new fee 

level results in a reasonable and 

equitable allocation of fees amongst 

External Distributors and Internal 

Distributors for similar services. 

Moreover, the decision as to whether or 

not to subscribe to ToM or AIS is 

entirely optional to all parties. Potential 

subscribers are not required to purchase 

the ToM or AIS market data feed, and 

the Exchange is not required to make 

the ToM or AIS market data feeds 

available. 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.’’ 9

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 

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 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 73 

10NetCoaltion, at 15 (quoting H.R. Rep. No. 94– 

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

321, 323). 11NetCoalition at 24. 

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 ToM 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.’ ’’ 10

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 

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. 

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 

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’.’’ 11 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 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
74 Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 

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 

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 

ToM 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 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 75 

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

13 17 CFR 240.19b–4(f)(2). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 34–72941 (Nov. 

5, 2014), 79 FR 67213 (Nov. 12, 2014) (File No. SR– 

ICC–2014–14) (order approving rule change to clear 

other Western European sovereign CDS contracts) 

(the ‘‘Prior WES Order’’). 

4 Id. 

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 12 and 

paragraph (f)(2) of Rule 19b–4 

thereunder.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. 

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–2014–66 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–2014–66. 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 MIAX. 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– 

2014–66 and should be submitted on or 

before January 23, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30701 Filed 12–31–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73941; File No. SR–ICC– 

2014–21] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Notice of Filing of 

Proposed Rule Change To Provide for 

the Clearance of Additional Standard 

Western European Sovereign Single 

Names 

December 24, 2014. 

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 December 

16, 2014, ICE Clear Credit LLC (‘‘ICC’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared primarily by ICC. 

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 purpose of the proposed rule 

change is to adopt rules that will 

provide the basis for ICC to clear 

additional credit default swap (‘‘CDS’’) 

contracts. Specifically, ICC is proposing 

to amend Section 26I of its Rules to 

provide for the clearance of additional 

Standard Western European Sovereign 

CDS contracts (collectively, ‘‘SWES 

Contracts’’). ICC has been approved to 

clear four SWES Contracts: The 

Republic of Ireland, the Italian 

Republic, the Portuguese Republic, and 

the Kingdom of Spain.3 The proposed 

changes to the ICC Rules would provide 

for the clearance of additional SWES 

Contracts, specifically the Kingdom of 

Belgium and the Republic of Austria. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, ICC 

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. ICC has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of these statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

The purpose of the proposed rule 

change is to adopt rules that will 

provide the basis for ICC to clear 

additional credit default swap contracts. 

ICC has been approved to clear four 

SWES Contracts: The Republic of 

Ireland, the Italian Republic, the 

Portuguese Republic, and the Kingdom 

of Spain.4 ICC proposes amending 

Subchapter 26I of its Rules to provide 

for the clearance of two additional 

SWES Contracts, specifically the 

Kingdom of Belgium and the Republic 

of Austria. These two additional SWES 

Contracts will be offered on the 2003 

and 2014 ISDA Credit Derivatives 

Definitions. The addition of these SWES 

Contracts will benefit the market for 

credit default swaps on Western 

European by providing market 


asabaliauskas on DSK5VPTVN1PROD with NOTICES