38962 Federal Register / Vol. 82, No. 157 / Wednesday, August 16, 2017 / Notices 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3PIXLTM is the Exchange’s price improvement 

mechanism known as Price Improvement XL or 

PIXL. A member or member organization may 

electronically submit for execution an order it 

represents as agent on behalf of a public customer, 

broker-dealer, or any other entity (‘‘PIXL Order’’) 

against principal interest or against any other order 

(except as provided in Rule 1080(n)(i)(E)) it 

represents as agent (‘‘Initiating Order’’), provided it 

submits the PIXL order for electronic execution into 

the PIXL Auction pursuant to Rule 1080. See 

Exchange Rule 1080(n). 

4Options overlying Standard and Poor’s 

Depositary Receipts/SPDRs (‘‘SPY’’) are based on 

the SPDR exchange-traded fund (‘‘ETF’’), which is 

designed to track the performance of the S&P 500 

Index. 

5Section B of the Pricing Schedule contains 

Customer Rebate Tiers which are calculated by 

totaling Customer volume in Multiply Listed 

Options (including SPY) that are electronicallydelivered and executed, except volume associated 

with electronic QCC Orders, as defined in Exchange 

Rule 1080(o). Rebates are paid on Customer Rebate 

Tiers according to certain categories. Members and 

member organizations under Common Ownership 

may aggregate their Customer volume for purposes 

of calculating the Customer Rebate Tiers and 

receiving rebates. Affiliated Entities may aggregate 

their Customer volume for purposes of calculating 

the Customer Rebate Tiers and receiving rebates. 

See Section B of the Pricing Schedule. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(4) and (5). 

8Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

9NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 

2010). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17273 Filed 8–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81370; File No. SR–Phlx– 

2017–64] 

Self-Regulatory Organizations; 

NASDAQ PHLX LLC; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

Exchange’s Pricing Schedule 

August 10, 2017. 

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 July 31, 

2017 NASDAQ PHLX LLC (‘‘Phlx’’ 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Exchange’s Pricing Schedule at Section 

I, entitled ‘‘Rebates and Fees for Adding 

and Removing Liquidity in SPY,’’ and 

Section IV, Part A entitled ‘‘PIXL 

Pricing’’ to amend pricing related to 

PIXL 3 executions. 

While these amendments are effective 

upon filing, the Exchange has 

designated the proposed amendments to 

be operative on August 1, 2017. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqphlx.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 

The purpose of the proposed rule 

change is to amend the Exchange’s 

Pricing Schedule at Section I, entitled 

‘‘Rebates and Fees for Adding and 

Removing Liquidity in SPY’’ and 

specifically, the section that pertains to 

PIXL Executions in Standard and Poor’s 

Depositary Receipts/SPDRs (‘‘SPY’’).4

The Exchange also proposes to amend 

PIXL Pricing in Section IV, Part A, 

entitled ‘‘PIXL Pricing’’ for all other 

Multiply-Listed options symbols. 

First, the Exchange proposes to 

increase the SPY Complex PIXL rebate 

it offers Phlx members or member 

organizations that qualify for Section B, 

Customer Rebate Tiers 5 2 through 6 or 

qualify for the Monthly Firm Fee Cap. 

Presently, the Exchange offers a rebate 

of $0.10 per contract for all SPY 

Complex PIXL Orders greater than 499 

contracts, provided the member or 

member organization executes an 

average of 2,500 contracts per day of 

SPY Complex PIXL Orders in a month. 

The Exchange proposes to increase that 

rebate to $0.12 per contract. In doing so, 

the Exchange desires to incentivize 

members or member organizations to 

transact a greater number of SPY 

Complex PIXL Orders while also 

incentivizing members or member 

organizations to submit Customer order 

flow on Phlx. 

Second, the Exchange proposes to 

increase the Complex PIXL (excluding 

SPY Options rebate it offers to Phlx 

members and member organizations that 

qualify for Section B, Customer Rebate 

Tiers 2 through 6 or qualify for the 

Monthly Firm Fee Cap. Presently, the 

Exchange offers a rebate of $0.10 per 

contract for all Complex PIXL Orders 

(excluding SPY Options) greater than 

499 contracts, provided the member or 

member organization executes an 

average of 2,500 contracts per day of 

Complex SPY PIXL Orders in a month. 

The Exchange proposes to increase that 

rebate to $0.12 per contract. In doing so, 

the Exchange desires to incentivize 

members and member organizations to 

transact a greater number of Complex 

PIXL Orders while also incentivizing 

members and member organizations to 

submit Customer order flow on Phlx to 

obtain the $0.12 rebate on all Complex 

PIXL Orders (excluding SPY Options). 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,6 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,7 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 8

Likewise, in NetCoalition v. Securities 

and Exchange Commission 9

(‘‘NetCoalition’’) the D.C. Circuit upheld 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
Federal Register / Vol. 82, No. 157 / Wednesday, August 16, 2017 / Notices 38963 

10See NetCoalition, at 534–535. 

11 Id. at 537. 

12 Id. at 539 (quoting Securities Exchange Act 

Release No. 59039 (December 2, 2008), 73 FR 

74770, 74782–83 (December 9, 2008) (SR– 

NYSEArca–2006–21)). 13 15 U.S.C. 78s(b)(3)(A)(ii). 

the Commission’s use of a market-based 

approach in evaluating the fairness of 

market data fees against a challenge 

claiming that Congress mandated a costbased approach.10 As the court 

emphasized, the Commission ‘‘intended 

in Regulation NMS that ‘market forces, 

rather than regulatory requirements’ 

play a role in determining the market 

data . . . to be made available to 

investors and at what cost.’’ 11

Further, ‘‘[n]o one disputes that 

competition for order flow is ‘fierce.’ 

. . . As the SEC explained, ‘[i]n the U.S. 

national market system, buyers and 

sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’. . . .’’ 12 Although the court 

and the SEC were discussing the cash 

equities markets, the Exchange believes 

that these views apply with equal force 

to the options markets. 

The Exchange believes that its 

proposal is reasonable to offer to Phlx 

members or member organizations that 

qualify for Section B, Customer Rebate 

Tiers 2 through 6 or qualify for the 

Monthly Firm Fee Cap an increased 

rebate of $0.12 per contract for all SPY 

Complex PIXL Orders greater than 499 

contracts, provided the member or 

member organization executes an 

average of 2,500 contracts per day of 

SPY Complex PIXL Orders in a month. 

The proposed rebate increase will 

incentivize members and member 

organizations to transact a greater 

number of SPY Complex PIXL Orders 

will also incentivize members and 

member organizations to submit 

Customer order flow on Phlx. All 

members and member organizations are 

eligible for this increased rebate. 

The Exchange also believes that its 

proposal is equitable and not unfairly 

discriminatory because all members and 

member organizations are eligible for 

the proposed rebate increase, provided 

they met the requisite qualifications. 

Members and member organizations 

would be uniformly paid the increased 

rebate. 

The Exchange also believes that its 

proposal is reasonable to offer to Phlx 

members or member organizations that 

qualify for Section B, Customer Rebate 

Tiers 2 through 6 or qualify for the 

Monthly Firm Fee Cap an increased 

rebate of $0.12 per contract for all 

Complex PIXL Orders (excluding SPY 

Options) greater than 499 contracts, 

provided the member or member 

organization executes an average of 

2,500 contracts per day of SPY Complex 

PIXL Orders in a month. The proposed 

increased rebate will incentivize 

members and member organizations to 

transact a greater number of Complex 

PIXL Orders and will also incentivize 

members and member organizations to 

submit Customer order flow on Phlx. 

All members and member organizations 

are eligible for this rebate, which 

applies to all Complex PIXL Orders 

excluding SPY Options. 

This proposal is equitable and not 

unfairly discriminatory because all 

members and member organizations are 

eligible for the proposed increased 

rebate, provided that they meet the 

requisite qualifications. 

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. In terms of 

inter-market competition, 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, or 

rebate opportunities available at other 

venues to be more favorable. In such an 

environment, the Exchange must 

continually adjust its fees to remain 

competitive with other exchanges and 

with alternative trading systems that 

have been exempted from compliance 

with the statutory standards applicable 

to exchanges. Because competitors are 

free to modify their own fees in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. 

The Exchange believes that increasing 

its rebates will promote inter-market 

competition by differentiating it from 

other options exchanges (e.g., MIAX) 

and making it a more attractive options 

trading venue. 

The Exchange also believes that its 

proposal does not impose an undue 

burden on intra-market competition to 

offer Phlx members and member 

organizations that qualify for Section B, 

Customer Rebate Tiers 2 through 6 or 

qualify for the Monthly Firm Fee Cap an 

increased rebate of $0.12 per contract 

for all SPY Complex PIXL Orders greater 

than 499 contracts, provided the 

member or member organization 

executes an average of 2,500 contracts 

per day of SPY Complex PIXL Orders in 

a month. All members and member 

organizations are eligible for the 

proposed rebate increase, provided they 

met the requisite qualifications. 

Members and member organizations 

would be uniformly paid the increased 

rebate. 

For the same reasons, the Exchange 

does not believe that its proposal 

imposes an undue burden on intramarket competition to offer to Phlx 

members and member organizations that 

qualify for Section B, Customer Rebate 

Tiers 2 through 6 or qualify for the 

Monthly Firm Fee Cap an increased 

rebate of $0.12 per contract for all 

Complex PIXL Orders (excluding SPY 

Options) greater than 499 contracts, 

provided the member or member 

organization executes an average of 

2,500 contracts per day of SPY Complex 

PIXL Orders in a month. 

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 

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: (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: 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
38964 Federal Register / Vol. 82, No. 157 / Wednesday, August 16, 2017 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3A ‘‘complex order’’ is any order involving the 

concurrent purchase and/or sale of two or more 

different options in the same underlying security 

(the ‘‘legs’’ or ‘‘components’’ of the complex order), 

for the same account, in a ratio that is equal to or 

greater than one-to-three (.333) and less than or 

equal to three-to-one (3.00) and for the purposes of 

executing a particular investment strategy. Minioptions may only be part of a complex order that 

includes other mini-options. Only those complex 

orders in the classes designated by the Exchange 

and communicated to Members via Regulatory 

Circular with no more than the applicable number 

of legs, as determined by the Exchange on a classby-class basis and communicated to Members via 

Regulatory Circular, are eligible for processing. See 

Exchange Rule 518(a)(5). 

4For a complete description of the trading of 

complex orders on the Exchange, see Exchange Rule 

518. See also, Securities Exchange Act Release No. 

79072 (October 7, 2016), 81 FR 71131 (October 14, 

2016) (SR–MIAX–2016–26). 

5See Securities Exchange Act Release No. 81131 

(July 12, 2017), 82 FR 32900 (July 18, 2017) (SR– 

MIAX–2017–19). (Order Granting Approval of a 

Proposed Rule Change to Amend MIAX Options 

Rules 515, Execution of Orders and Quotes; 515A, 

MIAX Price Improvement Mechanism (‘‘PRIME’’) 

and PRIME Solicitation Mechanism; and 518, 

Complex Orders). 

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– 

Phlx–2017–64 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 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2017–64. 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–Phlx– 

2017–64 and should be submitted on or 

before September 6, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17278 Filed 8–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81372; File No. SR–MIAX– 

2017–40] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend Its Fee Schedule in 

Connection With the Adoption of 

Certain New Complex Order Types 

August 10, 2017. 

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 August 7, 2017, Miami International 

Securities Exchange LLC (‘‘MIAX 

Options’’ 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 ‘‘Fee Schedule’’) to adopt 

transaction fees and rebates for certain 

new complex order types that have 

become available for trading on the 

Exchange, as described below. The 

Exchange also proposes to clarify an 

existing transaction fee that applies to 

an existing order type, as well as make 

a number of technical corrections to its 

Fee Schedule. 

The Exchange initially filed the 

proposal on July 27, 2017 (SR–MIAX– 

2017–37). That filing was withdrawn 

and replaced with the current filing 

(SR–MIAX–2017–40). 

. [sic] 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.miaxoptions.com/rulefilings, 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 adopt transaction fees 

and rebates for certain new complex 

order types that have become available 

for trading on the Exchange, as 

described below. The Exchange also 

proposes to clarify an existing 

transaction fee that applies to an 

existing order type, as well as make a 

number of technical corrections to the 

Fee Schedule. 

The Exchange began trading complex 

orders 3 in October, 2016.4 As part of its 

effort to continue to build out its 

complex order market segment, the 

Exchange recently adopted rules to 

establish the following three new types 

of complex orders as well as adopted 

new provisions that relate to the 

processing of such complex order types: 

(i) Complex PRIME (‘‘cPRIME’’) Orders, 

(ii) Complex Qualified Contingent Cross 

(‘‘cQCC’’) Orders, and (iii) Complex 

Customer Cross (‘‘cC2C’’) Orders.5 A 

cPRIME Order is a complex order that 

is submitted for participation in a 

cPRIME Auction. A cQCC Order is 

comprised of an originating complex 

order to buy or sell where each leg is at 


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