Document ID: SEC-2015-0604-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Miami International Securities Exchange, LLC
Posted Date: 2015-04-08T04:00Z

[Federal Register Volume 80, Number 67 (Wednesday, April 8, 2015)]
[Notices]
[Pages 18894-18896]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-07961]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74633; File No. SR-MIAX-2015-25]

Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Its Fee Schedule

April 2, 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 March 31, 2015, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
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 the MIAX Options Fee Schedule (the 
``Fee Schedule'') to increase the fees for MEI Ports to Market Makers. 
Specifically, the Exchange proposes to: (i) Increase the MEI Port Fee 
for the first matching engine used, from $1,000 to $2,500 per month; 
(ii) increase the MEI Port Fee for each of matching engines 2 through 
5, from $500 to $1,200 per month; (iii) increase the MEI Port Fee for 
each of matching engines 6 and above, from $250 to $700 per month; and 
(iv) increase the fee for additional Limited Service MEI Ports from $10 
to $50 per month.
    Currently, MIAX assesses monthly MEI Port Fees on Market Makers 
based upon the number of MIAX matching engines \3\ used by the Market 
Maker. MEI Port users are allocated two Full Service MEI Ports \4\ and 
two Limited Service MEI Ports \5\ per matching engine to which they 
connect. The Exchange currently assesses a fee of $1,000 per month on 
Market Makers for the first matching engine they use; $500 per month 
for each of matching engines 2 through 5; and $250 per month for each 
of matching engines 6 and above. For

[[Page 18895]]

example, a Market Maker that wishes to make markets in just one symbol 
would require the two MEI Ports in a single matching engine; a Market 
Maker wishing to make markets in all symbols traded on MIAX would 
require the two MEI Ports in each of the Exchange's matching engines. 
The Exchange also currently charges $10 per month for each additional 
Limited Service MEI Port per matching engine for Market Makers in 
addition to the two Limited Service MEI Ports per matching engine that 
are allocated with the Full Service MEI Ports. The Full Service MEI 
Ports, Limited Service MEI Ports and the additional Limited Service MEI 
Ports all include access to MIAX's primary and secondary data centers 
and its disaster recovery center.
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    \3\ A ``matching engine'' is a part of the MIAX electronic 
system that processes options quotes and trades on a symbol-by-
symbol basis. Some matching engines will process option classes with 
multiple root symbols, and other matching engines will be dedicated 
to one single option root symbol (for example, options on SPY will 
be processed by one single matching engine that is dedicated only to 
SPY). A particular root symbol may only be assigned to a single 
designated matching engine. A particular root symbol may not be 
assigned to multiple matching engines.
    \4\ Full Service MEI Ports provide Market Makers with the 
ability to send Market Maker quotes, eQuotes, and quote purge 
messages to the MIAX System. Full Service MEI Ports are also capable 
of receiving administrative information. Market Makers are limited 
to two Full Service MEI Ports per matching engine.
    \5\ Limited Service MEI Ports provide Market Makers with the 
ability to send eQuotes and quote purge messages only, but not 
Market Maker Quotes, to the MIAX System. Limited Service MEI Ports 
are also capable of receiving administrative information. Market 
Makers initially receive two Limited Service MEI Ports per matching 
engine.
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    The Exchange notes that another competing exchange charges 
substantially more for the use of similar ports.\6\ The Exchange 
established the current lower rates in order to encourage additional 
market participants to become Members of the Exchange and register as 
Market Makers and use the service. Now that the Exchange has grown its 
market share and membership base, the Exchange proposes to modify its 
fees charged to Market Makers for use of MEI Ports in an effort to 
increase the Exchange's revenues from non-transaction fee sources and 
also more closely align the fees with the rates charged by another 
competing options exchange. Accordingly, the Exchange proposes to 
increase the fees charged to Market Makers for use of MEI Ports. 
Specifically, the Exchange proposes to: (i) Increase the MEI Port Fee 
for the first matching engine used, from $1,000 to $2,500 per month; 
(ii) increase the MEI Port Fee for each of matching engines 2 through 
5, from $500 to $1,200 per month; (iii) increase the MEI Port Fee for 
each of matching engines 6 and above, from $250 to $700 per month; and 
(iv) increase the fee for additional Limited Service MEI Ports from $10 
to $50 per month.
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    \6\ See NASDAQ OMX PHLX LLC (``PHLX'') Pricing Schedule, Section 
VII. PHLX assesses specialists and market makers Active SQF Port Fee 
of $2,500 per month for the first port, $4,000 per month for ports 
2-6, and $15,000 per month for ports 7 and over. Active SQF Port 
Fees are capped at $42,000 per month.
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    The Exchange proposes to implement the fee changes beginning April 
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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposal is reasonable and not 
unfairly discriminatory because Market Makers are free to add and 
remove MEI Ports and will only be charged for the amount of MEI Ports 
that they desire to use. The proposed fee is fair and equitable and not 
unreasonably discriminatory because it applies equally to all Market 
Makers regardless of type. All similarly situated Market Makers, with 
the same number of MEI Ports, will be subject to the same fee, and 
access to the Exchange is offered on terms that are not unfairly 
discriminatory. The Exchange believes that the proposed fees are 
reasonable in that the rates are within the range of that charged by 
another competing options exchange.

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, as amended. The 
Exchange believes that the proposal increases both intermarket and 
intramarket competition by increasing MEI Port fees for Market Makers 
on the Exchange in the range of comparable fees on another 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 in order to attract market 
participants to use its services. The Exchange believes that the 
proposal reflects this competitive environment because it increases the 
Exchange's fees in a manner that continues to encourage market 
participants to register as Market Makers on the Exchange, to provide 
liquidity, and to attract order flow. To the extent that this purpose 
is achieved, all the Exchange's market participants should benefit from 
the improved market liquidity.

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.\9\ 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-2015-25 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-MIAX-2015-25. 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.,

[[Page 18896]]

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-2015-25, and should be 
submitted on or before April 29, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-07961 Filed 4-7-15; 8:45 am]
 BILLING CODE 8011-01-P