Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 1537 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release Nos. 72799 

(August 8, 2014), 79 FR 47698 (August 14, 2014) 

(SR–MIAX–2014–40); 72355 (June 10, 2014), 79 FR 

34368 (June 16, 2014) (SR–MIAX–2014–25); 71698 

(March 12, 2014), 79 FR 15185 (March 18, 2014) 

(SR–MIAX–2014–12); 71283 (January 10, 2014), 79 

FR 2914 (January 16, 2014) (SR–MIAX–2013–63); 

71009 (December 6, 2013), 78 FR 75629 (December 

12, 2013) (SR–MIAX–2013–56). 

4The term ‘‘Priority Customer’’ means a person 

or entity that (i) is not a broker or dealer in 

securities, and (ii) does not place more than 390 

orders in listed options per day on average during 

a calendar month for its own beneficial accounts(s). 

See MIAX Rule 100. 

5See Securities Exchange Release Nos. 71700 

(March 12, 2014), 79 FR 15188 (March 18, 2014) 

(SR–MIAX–2014–13); 72356 (June 10, 2014), 79 FR 

34384 (June 16, 2014) (SR–MIAX–2014–26); 72567 

(July 8, 2014), 79 FR 40818 (July 14, 2014) (SR– 

MIAX–2014–34); 73328 (October 9, 2014), 79 FR 

62230 (October 16, 2014) (SR–MIAX–2014–50). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00215 Filed 1–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74007; File No. SR–MIAX– 

2014–69] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend Its Fee Schedule 

January 6, 2015. 

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 24, 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 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 

current Priority Customer Rebate 

Program (the ‘‘Program’’) to modify the 

volume thresholds of tiers 3 and 4.3

Under the Program, the Exchange shall 

credit each Member the per contract 

amount set forth in the table below 

resulting from each Priority Customer 4

order transmitted by that Member which 

is executed on the Exchange in all 

multiply-listed option classes 

(excluding mini-options, Priority 

Customer-to-Priority Customer Orders, 

PRIME AOC Responses, PRIME Contraside Orders, PRIME Orders for which 

both the Agency and Contra-side Order 

are Priority Customers, and executions 

related to contracts that are routed to 

one or more exchanges in connection 

with the Options Order Protection and 

Locked/Crossed Market Plan referenced 

in MIAX Rule 1400), provided the 

Member meets certain volume 

thresholds in a month as described 

below. For each Priority Customer order 

transmitted by that Member which is 

executed electronically on the Exchange 

in MIAX Select Symbols, MIAX shall 

credit each member at the separate per 

contract rate for MIAX Select Symbols.5

The volume thresholds are calculated 

based on the customer average daily 

volume over the course of the month. 

Volume will be recorded for and credits 

will be delivered to the Member Firm 

that submits the order to the Exchange. 

Percentage thresholds of national customer volume in multiply-listed options classes listed on MIAX (monthly) 

Per 

contract 

credit 

0.00%–0.35% ........................................................................................................................................................................................... $0.00 

Above 0.35%–0.50% ............................................................................................................................................................................... 0.10 

Above 0.50%–1.50% ............................................................................................................................................................................... 0.15 

Above 1.50%–2.00% ............................................................................................................................................................................... 0.17 

Above 2.00% ........................................................................................................................................................................................... 0.18 

The Exchange will aggregate the 

contracts resulting from Priority 

Customer orders transmitted and 

executed electronically on the Exchange 

from affiliated Members for purposes of 

the thresholds above, provided there is 

at least 75% common ownership 

between the firms as reflected on each 

firm’s Form BD, Schedule A. In the 

event of a MIAX System outage or other 

interruption of electronic trading on 

MIAX, the Exchange will adjust the 

national customer volume in multiplylisted options for the duration of the 

outage. A Member may request to 

receive its credit under the Priority 

Customer Rebate Program as a separate 

direct payment. 

In addition, the rebate payments will 

be calculated from the first executed 

contract at the applicable threshold per 

contract credit with the rebate payments 

made at the highest achieved volume 

tier for each contract traded in that 

month. For example, if Member Firm 

XYZ, Inc. (‘‘XYZ’’) has enough Priority 

Customer contracts to achieve 2.75% of 

the national customer volume in 

multiply-listed option contracts during 

the month of October, XYZ will receive 

a credit of $0.18 for each Priority 

Customer contract executed in the 

month of October. 

The purpose of the Program is to 

encourage Members to direct greater 

Priority Customer trade volume to the 


tkelley on DSK3SPTVN1PROD with NOTICES
1538 Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 

6See MIAX Fee Schedule, Section 1(b). 

7See NYSE Arca, Inc. Fees Schedule, page 4 

(section titled ‘‘Customer Monthly Posting Credit 

Tiers and Qualifications for Executions in Penny 

Pilot Issues’’). 

8 Despite providing credits under the Program, 

the Exchange represents that it will continue to 

have adequate resources to fund its regulatory 

program and fulfill its responsibilities as a selfregulatory organization while the Program will be 

in effect. 

9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(4). 

Exchange. Increased Priority Customer 

volume will provide for greater 

liquidity, which benefits all market 

participants. 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,6 and customer posting 

incentive programs,7 are based on 

attracting public customer order flow. 

The Program 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. 

The specific volume thresholds of the 

Program’s tiers were set based upon 

business determinations and an analysis 

of current volume levels. The volume 

thresholds are intended to incentivize 

firms that route some Priority Customer 

orders to the Exchange to increase the 

number of orders that are sent to the 

Exchange to achieve the next threshold 

and to incent new participants to send 

Priority Customer orders as well. 

Increasing the number of orders sent to 

the Exchange will in turn provide 

tighter and more liquid markets, and 

therefore attract more business overall. 

Similarly, the different credit rates at 

the different tier levels were based on an 

analysis of revenue and volume levels 

and are intended to provide increasing 

‘‘rewards’’ for increasing the volume of 

trades sent to the Exchange. The specific 

amounts of the tiers and rates were set 

in order to encourage suppliers of 

Priority Customer order flow to reach 

for higher tiers. 

The credits paid out as part of the 

program will be drawn from the general 

revenues of the Exchange.8 The 

Exchange calculates volume thresholds 

on a monthly basis. 

The proposed changes will become 

operative on 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 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 that the 

proposed Priority Customer Rebate 

Program is fair, equitable and not 

unreasonably discriminatory. The 

Program is reasonably designed because 

it will incent providers of Priority 

Customer order flow to send that 

Priority Customer order flow to the 

Exchange in order to receive a credit in 

a manner that enables the Exchange to 

improve its overall competitiveness and 

strengthen its market quality for all 

market participants. The Program is also 

reasonably designed because the 

proposed credits are within the range of 

credits assessed by other exchanges 

employing similar rebate programs. The 

proposed rebate program is fair and 

equitable and not unreasonably 

discriminatory because it will apply 

equally to all Priority Customer orders. 

All similarly situated Priority Customer 

orders are subject to the same rebate 

schedule, and access to the Exchange is 

offered on terms that are not unfairly 

discriminatory. In addition, the Program 

is equitable and not unfairly 

discriminatory because, while only 

Priority Customer order flow qualifies 

for the Program, an increase in Priority 

Customer order flow will bring greater 

volume and liquidity, which benefit all 

market participants by providing more 

trading opportunities and tighter 

spreads. Similarly, offering increasing 

credits for executing higher percentages 

of total national customer volume 

(increased credit rates at increased 

volume tiers) is equitable and not 

unfairly discriminatory because such 

increased rates and tiers encourage 

Members to direct increased amounts of 

Priority Customer contracts to the 

Exchange. Market participants want to 

trade with Priority Customer order flow. 

To the extent Priority Customer order 

flow 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 those 

Members who receive the lower tier 

levels, or do not qualify for the Program 

at all, by providing more trading 

opportunities and tighter spreads. 

Limiting the Program to multiplylisted options classes listed on MIAX is 

reasonable because those parties trading 

heavily in multiply-listed classes will 

receive a credit for such trading, and is 

equitable and not unfairly 

discriminatory because the Exchange 

does not trade any singly-listed 

products at this time. If at such time the 

Exchange develops proprietary 

products, the Exchange anticipates 

having to devote a lot of resources to 

develop them, and therefore would need 

to retain funds collected in order to 

recoup those expenditures. 

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 

Exchange believes that the proposed 

change would increase both intermarket 

and intramarket competition by 

incenting Members to direct their 

Priority Customer orders to the 

Exchange, which will enhance the 

quality of quoting and increase the 

volume of contracts traded here. To the 

extent that there is additional 

competitive burden on non-Priority 

Customers, the Exchange believes that 

this is appropriate because the rebate 

program 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 

reduces the Exchange’s fees in a manner 

that encourages market participants to 

direct their customer order flow, to 

provide liquidity, and to attract 

additional transaction volume to the 

Exchange. Given the robust competition 

for volume among options markets, 

many of which offer the same products, 

implementing a volume based customer 

rebate program to attract order flow like 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 1539 

11 15 U.S.C. 78s(b)(3)(A)(ii). 12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

the one being proposed in this filing is 

consistent with the above-mentioned 

goals of the Act. This is especially true 

for the smaller options markets, such as 

MIAX, which is competing for volume 

with much larger exchanges that 

dominate the options trading industry. 

MIAX has a nominal percentage of the 

average daily trading volume in options, 

so it is unlikely that the customer rebate 

program could cause any competitive 

harm to the options market or to market 

participants. Rather, the customer rebate 

program is a modest attempt by a small 

options market to attract order volume 

away from larger competitors by 

adopting an innovative pricing strategy. 

The Exchange notes that if the rebate 

program resulted in a modest percentage 

increase in the average daily trading 

volume in options executing on MIAX, 

while such percentage would represent 

a large volume increase for MIAX, it 

would represent a minimal reduction in 

volume of its larger competitors in the 

industry. The Exchange believes that the 

proposal will help further competition, 

because market participants will have 

yet another additional option in 

determining where to execute orders 

and post liquidity if they factor the 

benefits of a customer rebate program 

into the determination. 

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.11 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–2014–69 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–2014–69. 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–2014–69 and should 

be submitted on or before February 2, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00223 Filed 1–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74002; File No. SR–BX– 

2014–061] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change to Modify BX’s 

Rule Governing Modification of Orders 

in the Event of an Issuer Corporate 

Action Related to a Dividend, Payment 

or Distribution 

January 6, 2015. 

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 

23, 2014, NASDAQ OMX BX, Inc. (‘‘BX’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘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 the Substance 

of the Proposed Rule Change 

The text of the proposed rule 

change is available on the Exchange’s 

Web site at http://

nasdaqomxbx.cchwallstreet.com/, at the 

principal office of the Exchange, 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 

BX Rule 4761 addresses the treatment 

of quotes/orders in securities that are 

the subject of issuer corporate actions 


tkelley on DSK3SPTVN1PROD with NOTICES