Document ID: SEC-2017-1388-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Miami International Securities Exchange, LLC
Posted Date: 2017-08-16T04:00Z

[Federal Register Volume 82, Number 157 (Wednesday, August 16, 2017)]
[Notices]
[Pages 38964-38972]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17277]

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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.
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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 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 That filing was withdrawn and replaced with the current 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/rule-filings, 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

[[Page 38965]]

least 1,000 contracts and that is identified as being part of a 
qualified contingent trade, as defined in Rule 516, Interpretations and 
Policies .01, coupled with a contra-side complex order or orders for 
the same strategy totaling an equal number of contracts. A cC2C Order 
is comprised of one Priority Customer complex order to buy and one 
Priority Customer complex order to sell the same complex strategy at 
the same initiating price (which must be better than (inside) the 
icMBBO \6\ price or the best net price of a complex order for the 
strategy) and for the same quantity. cPRIME Orders are processed and 
executed in the Exchange's PRIME mechanism, the same mechanism that the 
Exchange uses to process and execute simple PRIME orders, pursuant to 
Exchange Rule 515A. cQCC and cC2C Orders are processed and executed in 
the same mechanism that the Exchange uses to cross simple QCC orders 
and Customer Cross orders, pursuant to Exchange Rule 515.
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    \3\ A ``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. Mini-options 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 class-by-class basis and 
communicated to Members via Regulatory Circular, are eligible for 
processing. See Exchange Rule 518(a)(5).
    \4\ For 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).
    \5\ See 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).
    \6\ The Implied Complex MIAX Best Bid or Offer (``icMBBO'') is a 
calculation that uses the best price from the Simple Order Book for 
each component of a complex strategy including displayed and non-
displayed trading interest. For stock-option orders, the icMBBO for 
a complex strategy will be calculated using the best price (whether 
displayed or non-displayed) on the Simple Order Book in the 
individual option component(s), and the NBBO in the stock component. 
See Exchange Rule 518(a)(11).
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cPRIME Orders
    Rule 518(b)(7) defines a cPRIME Order as a type of complex order 
that is submitted for participation in a cPRIME Auction. Trading of 
cPRIME Orders is governed by Rule 515A, Interpretations and Policies 
.12. A cPRIME Auction is the price-improvement mechanism of the 
Exchange's System \7\ pursuant to which a Member (``Initiating 
Member'') electronically submits a complex order that it represents as 
agent (an ``Agency Order'') into a cPRIME Auction. The Initiating 
Member, in submitting an Agency Order, must be willing to either (i) 
cross the Agency Order at a single price (a ``single-price 
submission'') against principal or solicited interest, or (ii) 
automatically match (``auto-match''), against principal or solicited 
interest, the price and size of responses to a Request for Response 
(``RFR'') that is broadcast to MIAX Options participants up to an 
optional designated limit price.
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    \7\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
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    The Exchange utilizes the same mechanism for the processing and 
execution of both PRIME and cPRIME Orders. Accordingly, the Exchange 
has modified Rule 515A so that it also permits the execution of cPRIME 
Orders, through changes to Rule 515A(a) and the adoption of 
Interpretations and Policies .12 (PRIME for Complex Orders).\8\ 
Interpretations and Policies .12 includes certain processing and 
execution requirements for cPRIME Orders that differ from the 
processing and execution requirements under Rule 515A(a) for simple 
PRIME Orders.\9\
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    \8\ See supra note 5.
    \9\ Id.
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    The Exchange now proposes to adopt new Section 1(a)(vi), MIAX 
Complex Price Improvement Mechanism (``cPRIME'') Fees, on the Fee 
Schedule to establish transaction fees and credits for executions in a 
cPRIME Auction, which transaction fees and credits are similar to 
transaction fees and credits that the Exchange currently assesses for 
executions in a PRIME Auction:

----------------------------------------------------------------------------------------------------------------
                                             cPRIME order fee       Responder to cPRIME       cPRIME break-up
                                         ------------------------       auction fee               credit
                                                                 -----------------------------------------------
                                              Per         Per         Per         Per         Per         Per
      Types of market participants         contract    contract    contract    contract    contract    contract
                                            fee for     fee for     fee for     fee for   credit for  credit for
                                            agency      contra-      penny     non-penny     penny     non-penny
                                             order    side order    classes     classes     classes     classes
----------------------------------------------------------------------------------------------------------------
Priority Customer.......................       $0.00       $0.00       $0.50       $0.99       $0.25       $0.60
Public Customer that is Not a Priority          0.30        0.05        0.50        0.99        0.25        0.60
 Customer...............................
MIAX Market Maker.......................        0.30        0.05        0.50        0.99        0.25        0.60
Non-MIAX Market Maker...................        0.30        0.05        0.50        0.99        0.25        0.60
Non-Member Broker-Dealer................        0.30        0.05        0.50        0.99        0.25        0.60
Firm....................................        0.30        0.05        0.50        0.99        0.25        0.60
----------------------------------------------------------------------------------------------------------------

This cPRIME Fee table (including the amounts therein) is identical to 
the PRIME Fee table (including the amounts therein), which is contained 
in Section 1(a)(v) of the Fee Schedule.
    The Exchange also proposes to adopt certain explanatory text 
relating to the cPRIME Fee table, just as the Exchange currently has 
relating to the PRIME Fee table. The text provides that all fees and 
credits are per contract per leg. Also, MIAX will assess the Responder 
to cPRIME Auction Fee to: (i) A cPRIME AOC Response that executes 
against a cPRIME Order, and (ii) a cPRIME Participating Quote or Order 
\10\ that executes against a cPRIME Order. MIAX will apply the cPRIME 
Break-up credit to the EEM that submitted the cPRIME Order for agency 
contracts that are submitted to the cPRIME Auction that trade with a 
cPRIME AOC Response or a cPRIME Participating Quote or Order that 
trades with the cPRIME Order. MIAX will assess the standard complex 
transaction fees to a cPRIME AOC Response if it executes against 
unrelated complex orders. Any Member \11\ or its Affiliate \12\ that 
qualifies for Priority Customer Rebate Program volume tiers 3 or higher 
and submits a cPRIME AOC Response that is received during the Response 
Time Interval and executed against the cPRIME Order, or a cPRIME 
Participating Quote or Order that is received during the Response Time 
Interval and executed against the cPRIME Order, will be assessed a 
Discounted cPRIME Response Fee of $0.46 per contract for standard 
complex order options in Penny Pilot classes. Any Member or its 
Affiliate that

[[Page 38966]]

qualifies for Priority Customer Rebate Program volume tiers 3 or higher 
and submits a cPRIME AOC Response that is received during the Response 
Time Interval and executed against the cPRIME Order, or a cPRIME 
Participating Quote or Order that is received during the Response Time 
Interval and executed against the cPRIME Order, will be assessed a 
Discounted cPRIME Response Fee of $0.95 per contract for standard 
complex order options in non-Penny Pilot classes.
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    \10\ The term ``cPRIME Participating Quote or Order'' means an 
unrelated MIAX Market Maker complex quote or unrelated MIAX Market 
Maker complex order that is received during the Response Time 
Interval and executed against a cPRIME Order. See Section 1(a)(i) of 
the Fee Schedule, as described below.
    \11\ The term ``Member'' means an individual or organization 
approved to exercise the trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
    \12\ For purposes of the MIAX Options Fee Schedule, the term 
``Affiliate'' means (i) an affiliate of a Member of at least 75% 
common ownership between the firms as reflected on each firm's Form 
BD, Schedule A, (``Affiliate''), or (ii) the Appointed Market Maker 
of an Appointed EEM (or, conversely, the Appointed EEM of an 
Appointed Market Maker). See Fee Schedule note 1.
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    The Exchange also proposes to amend Section 1(a)(iii), the Priority 
Customer Rebate Program (the ``PCRP''), of the Fee Schedule to 
establish a tiered per contract credit for cPRIME Agency Orders. The 
Exchange proposes to credit each Member $0.10 per contract per leg for 
each Priority Customer cPRIME Agency Order in each tier. The Exchange 
also proposes to adopt certain explanatory text relating to cPRIME 
Agency Orders in PCRP table, just as the Exchange currently has 
relating to other order types in the PCRP table. The text provides that 
all fees and rebates are per contract per leg. Also for each Priority 
Customer complex order submitted into the cPRIME Auction as a cPRIME 
Agency Order, MIAX shall credit each member at the separate per 
contract per leg rate for cPRIME Agency Orders. However, no rebates 
will be paid if the cPRIME Agency Order executes against a Contra-side 
Order which is also a Priority Customer. Finally, unless otherwise 
explicitly set forth therein, the remainder of the explanatory text 
relating to the PCRP set forth in that Section 1(a)(iii) shall apply to 
cPRIME Agency Orders. The Exchange notes that a Member or its Affiliate 
that qualifies for PCRP volume tiers 3 or higher receives an additional 
rebate of $0.02 per contract for each Priority Customer order executed 
in the PRIME Auction as a PRIME Agency Order over a threshold of 
1,500,000 contracts in a month.
    Finally, for clarification, just as is the case today for other 
types of complex orders, if the cPRIME order legs into the simple order 
book, the contracts that were entered directly into the simple order 
book will be subject to all standard transaction fees, marketing fees, 
rebates, and credits, as set forth in the Exchange's Fee Schedule and 
as applicable to simple orders. Also, the Exchange will assess only the 
cPRIME fees contained in Section 1(a)(vi) with respect to cPRIME 
Auctions--the Exchange will not also assess the complex order fees 
contained elsewhere in Section 1(a). For example, a MIAX Market Maker 
would only be charged $0.50 per contract per leg executed for 
responding to a cPRIME Auction, pursuant to Section 1(a)(vi); it would 
not also be charged the $0.10 Per Contract Surcharge for Removing 
Liquidity Against a Resting Priority Customer Complex Order on the 
Strategy Book fee contained in Section 1(a)(i). Also, if a cPRIME 
Agency Order legs into a simple Market Maker order on the simple order 
book, the Market Maker order would not be considered to be a Responder 
for fee purposes.
    As Section 1(a)(vi) will now contain the proposed cPRIME fees, the 
current simple QCC Fees table will be renumbered as Section 1(a)(vii). 
There are no substantive changes for simple QCC fees.
cQCC Orders
    The Exchange proposes to adopt new Section 1(a)(viii), cQCC Fees, 
to the Fee Schedule to establish transaction fees and rebates for cQCC 
Orders, which are identical to transaction fees and rebates that the 
Exchange currently charges for simple QCC Orders:

----------------------------------------------------------------------------------------------------------------
                                                                                    cQCC Order
                                                                 -----------------------------------------------
                  Types of market participants                     Per contract    Per contract    Per contract
                                                                      fee for         fee for       rebate for
                                                                     initiator      contra-side      initiator
----------------------------------------------------------------------------------------------------------------
Priority Customer...............................................           $0.00           $0.00           $0.10
Public Customer that is Not a Priority Customer.................            0.15            0.15            0.10
MIAX Market Maker...............................................            0.15            0.15            0.10
Non-MIAX Market Maker...........................................            0.15            0.15            0.10
Non-Member Broker-Dealer........................................            0.15            0.15            0.10
Firm............................................................            0.15            0.15            0.10
----------------------------------------------------------------------------------------------------------------

This cQCC Fees table (including the amounts therein) is identical to 
the QCC Fees table (including the amounts therein), which is contained 
in Section 1(a)(vii) of the Fee Schedule. The Exchange also proposes to 
adopt certain explanatory text relating to the cQCC Fees table, just as 
the Exchange currently has relating to the simple QCC Fees table. The 
text provides that all fees and rebates are per contract per leg. Also, 
rebates will be delivered to the Member firm that enters the order into 
the MIAX system, but will only be paid on the initiating side of the 
cQCC transaction. However, no rebates will be paid for cQCC 
transactions for which both the initiator and contra-side orders are 
Priority Customers. A cQCC transaction is comprised of an `initiating 
complex order' to buy (sell) where each component is at least 1,000 
contracts that is identified as being part of a qualified contingent 
trade, coupled with a contra-side complex order or orders to sell (buy) 
an equal number of contracts.
C2C and cC2C Orders
    The Exchange proposes to adopt new Section 1(a)(ix), C2C and cC2C 
Fees, to the Fee Schedule to clarify and establish transaction fees and 
rebates for C2C Orders and cC2C Orders.

------------------------------------------------------------------------
                                                           C2C and cC2C
                                                            order per
              Types of market participants                contract fee/
                                                              rebate
------------------------------------------------------------------------
Priority Customer......................................           $0.00
------------------------------------------------------------------------

    The Exchange notes that it currently offers trading in C2C 
Orders.\13\ Because C2C Orders are comprised entirely of Priority 
Customer orders, the Exchange assesses a $0.00 per contract transaction 
fee and a $0.00 rebate to such orders, pursuant to section 1(a)(ii) of 
the Fee Schedule. However, the Exchange desires to clarify and make 
explicit that C2C Orders are assessed a $0.00 per contract transaction 
fee and paid a $0.00 per contract rebate. The Exchange is also 
proposing to assess cC2C Orders a $0.00 per contract transaction fee 
and to pay a $0.00 per contract rebate.
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    \13\ See Exchange Rule 516(i).
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    The Exchange also proposes to adopt certain explanatory text 
relating to the C2C and cC2C Fees table. The text provides that all 
fees and rebates are per contract per leg. Also, a C2C Order is 
comprised of a Priority Customer Order to buy and a Priority Customer 
Order to sell at the same price and for the same quantity. A cC2C Order 
is comprised of

[[Page 38967]]

one Priority Customer complex order to buy and one Priority Customer 
complex order to sell at the same price and for the same quantity.
Exclusion From Certain Percentage Thresholds and Programs and Technical 
Corrections
    The Exchange notes that it currently excludes certain simple PRIME, 
QCC, and C2C order types from counting towards certain percentage 
thresholds and from participating in certain programs under its Fee 
Schedule. Accordingly, with the introduction of these new complex order 
types on the Exchange, i.e. cPRIME, cQCC, and cC2C Orders, the Exchange 
is similarly proposing to exclude these new order types from counting 
towards those certain percentage thresholds and from participating in 
certain programs under its Fee Schedule. The Exchange notes that C2C 
Orders are comprised entirely of Priority Customer orders, and thus, 
where applicable, are currently excluded contracts under Priority 
Customer-to-Priority Customer Orders. However, the Exchange desires to 
clarify that C2C Orders are, where applicable, excluded by explicitly 
identifying and adding such orders to the list of excluded contracts, 
as described below.
    First, in Section 1(a)(i) of the Fee Schedule, Market Maker 
Transaction Fees, Market Maker Sliding Scale, the Exchange currently 
excludes certain contracts executed from counting towards volume for 
purposes calculating the percentage threshold in each of the Market 
Maker tiers. The Fee Schedule currently provides that volume thresholds 
are based on the total national Market Maker volume of any options 
classes with traded volume on MIAX during the month in simple and 
complex orders (excluding QCC Orders, PRIME AOC Responses, and 
unrelated MIAX Market Maker quotes or unrelated MIAX Market Maker 
orders that are received during the Response Time Interval and executed 
against the PRIME Order (``PRIME Participating Quotes or Orders'')). 
With the introduction of these new complex order types, the Exchange 
now proposes to add the following order types to the list of excluded 
contracts: cQCC Orders, cPRIME AOC Responses, and unrelated MIAX Market 
Maker complex quotes or unrelated MIAX Market Maker complex orders that 
are received during the Response Time Interval and executed against a 
cPRIME Order (``cPRIME Participating Quote or Order''). Accordingly, as 
amended, the list of excluded contracts shall be QCC and cQCC Orders, 
PRIME and cPRIME AOC Responses, and unrelated MIAX Market Maker quotes 
or unrelated MIAX Market Maker orders that are received during the 
Response Time Interval and executed against the PRIME Order (``PRIME 
Participating Quotes or Orders'') and unrelated MIAX Market Maker 
complex quotes or unrelated MIAX Market Maker complex orders that are 
received during the Response Time Interval and executed against a 
cPRIME Order (``cPRIME Participating Quote or Order'').
    Second, in Section 1(a)(iii) of the Fee Schedule, PCRP, the 
Exchange currently excludes certain contracts executed from 
participation in the PCRP. The Fee Schedule currently excludes, in 
simple or complex as applicable, QCC Orders, mini-options, Priority 
Customer-to-Priority Customer Orders, PRIME AOC Responses, PRIME 
Contra-side 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. With the introduction of these new complex order types, the 
Exchange now proposes to add the following contract executions to the 
list of excluded contracts: cQCC Orders, C2C and cC2C Orders, cPRIME 
AOC Responses, cPRIME Contra-side Orders, and cPRIME Orders for which 
both the Agency and Contra-side Order are Priority Customers. 
Accordingly, as amended, the list of excluded contracts shall be, in 
simple or complex as applicable, QCC and cQCC Orders, mini-options, 
Priority Customer-to-Priority Customer Orders, C2C and cC2C Orders, 
PRIME and cPRIME AOC Responses, PRIME and cPRIME Contra-side Orders, 
PRIME and cPRIME 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. 
The Exchange notes that C2C Orders are comprised entirely of Priority 
Customer orders, and thus are currently excluded contracts. However, 
the Exchange desires to clarify that C2C Orders are excluded by 
explicitly identifying and adding such orders to the list of excluded 
contracts. The Exchange notes that Priority Customer-to-Priority 
Customer Orders are two opposite Priority Customer Orders that are 
paired and entered into a PRIME Auction, with the Member designating 
one such Priority Customer Order as the PRIME Agency Order, which such 
order becomes eligible for price improvement in the PRIME Auction.
    Further, the Exchange currently excludes certain contracts executed 
from counting towards volume for purposes of calculating the percentage 
threshold in each of the PCRP tiers. The Fee Schedule currently 
provides that the percentage thresholds are calculated based on the 
percentage of national customer volume in multiply-listed options 
classes listed on MIAX entered and executed over the course of the 
month (excluding QCC Orders, Priority Customer-to-Priority Customer 
Orders, PRIME AOC Responses, PRIME Contra-side Orders, PRIME Orders for 
which both the Agency and Contra-side Order are Priority Customers). 
With the introduction of these new complex order types, the Exchange 
now proposes to add the following order types to the list of excluded 
contracts: cQCC Orders, C2C and cC2C Orders, cPRIME AOC Responses, 
cPRIME Contra-side Orders, and cPRIME Orders for which both the Agency 
and Contra-side Order are Priority Customers. Accordingly, as amended, 
the list of excluded contracts shall be QCC and cQCC Orders, Priority 
Customer-to-Priority Customer Orders, C2C and cC2C Orders, PRIME and 
cPRIME AOC Responses, PRIME and cPRIME Contra-side Orders, and PRIME 
and cPRIME Orders for which both the Agency and Contra-side Order are 
Priority Customers. The Exchange notes that C2C Orders are comprised 
entirely of Priority Customer orders, and thus are currently excluded 
contracts under Priority Customer-to-Priority Customer Orders. However, 
the Exchange desires to clarify that C2C Orders are excluded by 
explicitly identifying and adding such orders to the list of excluded 
contracts.
    Further, pursuant to the PCRP, the Exchange currently credits each 
``Qualifying Member'' \14\ $0.03 per contract resulting from each 
Priority Customer order in simple or complex order executions which 
falls within the PCRP volume tier 1. However, the Exchange also 
currently excludes certain contracts executed from receiving the $0.03 
per contract credit. The Fee Schedule currently excludes QCC Orders, 
mini-options, Priority Customer-to-Priority Customer Orders,

[[Page 38968]]

PRIME Agency Orders, PRIME AOC Responses, PRIME Contra-side 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. 
With the introduction of these new complex order types, the Exchange 
now proposes to add the following contract executions to the list of 
excluded contracts: cQCC Orders, C2C and cC2C Orders, cPRIME Agency 
Orders, cPRIME AOC Responses, cPRIME Contra-side Orders, and cPRIME 
Orders for which both the Agency and Contra-side Order are Priority 
Customers. Accordingly, as amended, the list of excluded contracts 
shall be QCC and cQCC Orders, mini-options, Priority Customer-to-
Priority Customer Orders, C2C and cC2C Orders, PRIME and cPRIME Agency 
Orders, PRIME and cPRIME AOC Responses, PRIME and cPRIME Contra-side 
Orders, PRIME and cPRIME 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. The Exchange notes that C2C Orders are comprised entirely of 
Priority Customer orders, and thus are currently excluded contracts 
under Priority Customer-to-Priority Customer Orders. However, the 
Exchange desires to clarify that C2C Orders are excluded by explicitly 
identifying and adding such orders to the list of excluded contracts.
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    \14\ ``Qualifying Member'' shall mean a Member or its Affiliate 
that qualifies for the Professional Rebate Program as described 
below and achieves a volume increase in excess of 0.065% for 
Professional orders transmitted by that Member which are executed 
electronically on the Exchange in all multiply-listed option classes 
for the account(s) of a Professional and which qualify for the 
Professional Rebate Program during a particular month relative to 
the applicable Baseline Percentage (as defined under the 
Professional Rebate Program).
---------------------------------------------------------------------------

    Further, pursuant to the PCRP, the Exchange currently credits any 
Member or its Affiliate that qualifies for PCRP volume tiers 3 or 
higher an additional $0.02 per contract for each Priority Customer 
order executed in the PRIME Auction as a PRIME Agency Order over a 
threshold of 1,500,000 contracts in a month. The Exchange notes that 
the additional $0.02 per contract credit will not be applicable for 
cPRIME Agency orders, and cPRIME Agency orders do not count toward the 
threshold as described below. The Exchange also currently excludes 
certain contracts executed from counting towards the threshold of 
1,500,000 contracts in a month. The Fee Schedule currently excludes QCC 
Orders, mini-options, Priority Customer-to-Priority Customer Orders, 
PRIME AOC Responses, PRIME Contra-side 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. With the introduction 
of these new complex order types, the Exchange now proposes to add the 
following contract executions to the list of excluded contracts: cQCC 
Orders, C2C and cC2C Orders, cPRIME Agency Orders, cPRIME AOC 
Responses, cPRIME Contra-side Orders, and cPRIME Orders for which both 
the Agency and Contra-side Order are Priority Customers. Accordingly, 
as amended, the list of excluded contracts shall be QCC and cQCC 
Orders, mini-options, Priority Customer-to-Priority Customer Orders, 
C2C and cC2C Orders, cPRIME Agency Orders, PRIME and cPRIME AOC 
Responses, PRIME and cPRIME Contra-side Orders, PRIME and cPRIME 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. The Exchange notes 
that C2C Orders are comprised entirely of Priority Customer orders, and 
thus are currently excluded contracts under Priority Customer-to-
Priority Customer Orders. However, the Exchange desires to clarify that 
C2C Orders are excluded by explicitly identifying and adding such 
orders to the list of excluded contracts.
    Third, in Section 1(a)(iv) of the Fee Schedule, Professional Rebate 
Program (``PRP''), the Exchange currently excludes certain contracts 
executed from participation in the PRP. The Fee Schedule currently 
excludes, in simple or complex as applicable, mini-options, Non-
Priority Customer-to-Non-Priority Customer Orders, QCC Orders, PRIME 
Orders, PRIME AOC Responses, PRIME Contra-side Orders, 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 (collectively, for purposes of the 
Professional Rebate Program, ``Excluded Contracts''). With the 
introduction of these new complex order types, the Exchange now 
proposes to add the following contract executions to the list of 
Excluded Contracts: cQCC Orders, cPRIME Orders, cPRIME AOC Responses, 
and cPRIME Contra-side Orders. Accordingly, as amended, the list of 
Excluded Contracts shall be, in simple or complex as applicable, mini-
options, Non-Priority Customer-to-Non-Priority Customer Orders, QCC and 
cQCC Orders, PRIME and cPRIME Orders, PRIME and cPRIME AOC Responses, 
PRIME and cPRIME Contra-side Orders, 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.
    Fourth, in Section 1(b) of the Fee Schedule, Marketing Fee, the 
Exchange currently does not assess the Marketing Fee to Market Makers 
\15\ for contracts executed as a PRIME Agency Order, Contra-side Order, 
Qualified Contingent Cross Order, PRIME Participating Quote or Order or 
a PRIME AOC Response in the PRIME Auction, unless it executes against 
an unrelated order. With the introduction of these new complex order 
types, the Exchange now proposes to add the following executions to 
that list: (i) cPRIME Agency Orders, (ii) cQCC Orders, and (iii) cPRIME 
Participating Quotes or Orders or cPRIME AOC Responses that trade 
against a cPRIME Agency Order. The Exchange also proposes to make a 
number of non-substantive technical corrections to the list, as 
follows: The Exchange proposes to abbreviate ``Qualified Contingent 
Cross Order'' to ``QCC Order''; the Exchange proposes to add clarifying 
language and to combine the PRIME Participating Quote or Order and 
PRIME AOC Response so that it reads ``PRIME Participating Quote or 
Order or a PRIME AOC Response trades against a PRIME Agency Order''; 
and the Exchange proposes to delete the text ``Contra side Order'' and 
``in the PRIME Auction; unless, it executes against an unrelated 
order'', as such text is now redundant because it is more explicitly 
covered in the clarified text. Accordingly, as amended, the text will 
provide that MIAX will not assess a Marketing Fee to Market Makers for 
contracts executed: (i) as a PRIME or cPRIME Agency Order, or as a QCC 
or cQCC Order; (ii) when a PRIME Participating Quote or Order or a 
PRIME AOC Response trades against a PRIME Agency Order; or (iii) when a 
cPRIME Participating Quote or Order or a cPRIME AOC Response trades 
against a cPRIME Agency Order.
---------------------------------------------------------------------------

    \15\ The term ``Market Makers'' refers to Lead Market Makers 
(``LMMs''), Primary Lead Market Makers (``PLMMs''), and Registered 
Market Makers (``RMMs'') collectively. See Exchange Rule 100. A 
Directed Order Lead Market Maker (``DLMM'') and Directed Primary 
Lead Market Maker (``DPLMM'') is a party to a transaction being 
allocated to the LMM or PLMM and is the result of an order that has 
been directed to the LMM or PLMM. See Fee Schedule note 2.
---------------------------------------------------------------------------

    Fifth, the Exchange proposes to make a number of non-substantive, 
technical corrections to Section 1(a)(v) of the Fee

[[Page 38969]]

Schedule, MIAX Price Improvement Mechanism (``PRIME'') Fees. The 
Exchange proposes to clarify certain explanatory text relating to the 
PRIME Fees table. The first sentence of the text currently states that 
``MIAX will assess the Responder to PRIME Auction Fee to: (i) A PRIME 
AOC Response that executes against a PRIME Order, and (ii) a PRIME 
Participating Quote or Order.'' The Exchange proposes to revise the 
text so that, as amended, it states ``MIAX will assess the Responder to 
PRIME Auction Fee to: (i) A PRIME AOC Response that executes against a 
PRIME Order, and (ii) a PRIME Participating Quote or Order that 
executes against a PRIME Order.'' The second sentence of the text 
states ``MIAX will apply the PRIME Break-up credit to the EEM that 
submitted the PRIME Order for agency contracts that are submitted to 
the PRIME Auction that trade with a PRIME AOC Response or a PRIME 
Participating Quote or Order.'' The Exchange proposes to revise the 
text so that, as amended, it states ``MIAX will apply the PRIME Break-
up credit to the EEM that submitted the PRIME Order for agency 
contracts that are submitted to the PRIME Auction that trade with a 
PRIME AOC Response or a PRIME Participating Quote or Order that trades 
with the PRIME Order. The third sentence of the text states ``The 
applicable fee for PRIME Orders will be applied to any contracts for 
which a credit is provided.'' The Exchange proposes to delete this 
sentence in its entirety, as it is redundant and potentially ambiguous. 
The Exchange believes that deleting this sentence (which reiterates 
that Exchange charges the Responder to PRIME Auction Fee [sic] for all 
contracts on which the Exchange pays the PRIME Break-up Credit) will 
eliminate any potential confusion among Members and investors. The 
fifth sentence of the text states ``MIAX will assess the standard 
transaction fees to a PRIME AOC Response if they execute against 
unrelated orders.'' The Exchange proposes to revise the text so that, 
as amended, it states ``MIAX will assess the standard transaction fees 
to a PRIME AOC Response if it executes against unrelated orders.''
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act in general, and furthers the 
objectives of Section 6(b)(4) of the Act in particular, in that it is 
an equitable allocation of reasonable dues, fees, and other charges 
among its members and issuers and other persons using its facilities. 
The Exchange also believes the proposal furthers the objectives of 
Section 6(b)(5) of the Act in that it is designed to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general to protect investors and the public interest and is not 
designed to permit unfair discrimination between customers, issuers, 
brokers and dealers.
    The Exchange believes that the proposed fee structure for cPRIME 
Auction transaction fees and rebates is reasonable, equitable, and not 
unfairly discriminatory. The proposed fee structure is reasonably 
designed because it is intended to incentivize market participants to 
send complex order flow to the Exchange in order to participate in the 
price improvement mechanism in a manner that enables the Exchange to 
improve its overall competitiveness and strengthen its market quality 
for all market participants. cPRIME Auctions and the corresponding fees 
are also reasonably designed because the proposed fees and rebates are 
very similar to ones the Exchange assesses for simple PRIME 
transactions, and are within the range of fees and rebates assessed by 
other exchanges employing similar fee structures for complex orders 
submitted and executed in a price improvement mechanism.\16\ Other 
competing exchanges offer different fees and rebates for complex agency 
orders, contra-side orders, and responders to an auction in a manner 
similar to the proposal.\17\ Other competing exchanges also charge 
different rates for transactions in their complex price improvement 
mechanisms for customers versus their non-customers in a manner similar 
to the proposal.\18\
---------------------------------------------------------------------------

    \16\ See Nasdaq ISE, LLC Schedule of Fees, p. 9; BOX Options 
Exchange Fee Schedule, p. 8.
    \17\ Id.
    \18\ Id.
---------------------------------------------------------------------------

    The fee and rebate structure is reasonable, equitable, and not 
unfairly discriminatory because it will apply equally amongst all 
Priority Customer orders in each category of cPRIME Auction 
participation and it will also apply equally amongst all non-Priority 
Customer orders in each category of cPRIME Auction participation. All 
similarly situated orders for Priority Customers are subject to the 
same transaction fee and rebate schedule. All similarly situated orders 
for market participants that are not Priority Customers are subject to 
the same transaction fee and rebate schedule, and access to the 
Exchange is offered on terms that are not unfairly discriminatory.
    The Exchange believes that is equitable and not unfairly 
discriminatory that Priority Customers be charged lower fees in cPRIME 
Auctions than other market participants. The exchanges in general have 
historically aimed to improve markets for investors and develop various 
features within market structure for customer benefit. The Exchange 
assesses Priority Customers lower or no transactions fees because 
Priority Customer order flow enhances liquidity on the Exchange for the 
benefit of all market participants. Priority Customer liquidity 
benefits all market participants by providing more trading 
opportunities, which attracts Market Makers. An increase in the 
activity of these market participants in turn facilitates tighter 
spreads, which may cause an additional corresponding increase in order 
flow from other market participants.
    Moreover, the Exchange believes that assessing all other market 
participants that are not Priority Customers a higher transaction fee 
than Priority Customers for cPRIME Order transactions is reasonable, 
equitable, and not unfairly discriminatory because these types of 
market participants are more sophisticated and have higher levels of 
order flow activity and system usage. This level of trading activity 
draws on a greater amount of system resources than that of Priority 
Customers, and thus, generates greater ongoing operational costs. 
Further, the Exchange believes that charging all market participants 
that are not Priority Customers the same fee for all cPRIME 
transactions is not unfairly discriminatory as the fees will apply to 
all these market participants equally.
    The Exchange believes that it is reasonable for cPRIME Agency and 
Contra-side Orders to be assessed lower fees than those providing 
responses. Contra-side Orders guarantee the cPRIME Agency Order, and 
are subject to market risk during the time period that the cPRIME 
Agency Order is exposed to other market participants. The Exchange 
believes that the market participants entering the Contra-side Order 
acts as a critical role in the cPRIME Auction as their willingness to 
guarantee the cPRIME Agency Order is the keystone to the cPRIME Agency 
Order gaining the opportunity for price improvement.
    The Exchange believes that it is equitable and not unfairly 
discriminatory to assess fees to responders to the cPRIME Auction and 
credit another participant to provide

[[Page 38970]]

incentive for participants to submit order flow to cPRIME Auctions. The 
Exchange believes that it is appropriate to provide incentives to 
market participants to direct orders to participate in cPRIME Auctions. 
Further, the Exchange believes that the transaction fees for responding 
to the cPRIME Auction will not deter market participants from providing 
price improvement.
    The Exchange believes that it is reasonable to assess lower 
transaction and credit rates to penny option classes than non-penny 
option classes. The Exchange believes that options which trade at these 
wider spreads merit offering greater inducement for market 
participants. In particular, within the cPRIME Auction, option classes 
that typically trade in minimum increments of $0.05 or $0.10 provide 
greater opportunity for market participants to offer price improvement. 
As such, the Exchange believes that the opportunity for additional 
price improvement provided by these wider spreads again merits offering 
greater incentive for market participants to increase the potential 
price improvement for customer orders in these transactions.
    The Exchange believes that the proposed PCRP rebates for Priority 
Customer orders submitted into cPRIME Auctions are fair, equitable, and 
not unreasonably discriminatory. The rebate program is reasonably 
designed because it will incentivize 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 proposed tiered rebate is fair, 
equitable, and not unreasonably discriminatory because it will apply 
equally to all Priority Customer orders submitted as a cPRIME Agency 
Order. 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 PCRP is 
equitable and not unfairly discriminatory because, while only Priority 
Customer order flow qualifies for the rebate 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. 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 Exchange believes that excluding cQCC Orders, C2C and cC2C 
Orders, cPRIME AOC Responses, cPRIME Contra-side Orders, and cPRIME 
Orders for which both the Agency and Contra-side Order are Priority 
Customers from the number of options contracts executed on the Exchange 
by any Member for purposes of the volume thresholds and the PCRP is 
reasonable, equitable, and not unfairly discriminatory because 
participating Members could otherwise collect the rebates offered and 
volume thresholds by executing excess volume in these types of 
transactions in which no transaction fees are charged on the Exchange. 
The Exchange believes that the rebate for Priority Customer agency 
orders in the cPRIME Auction is reasonably designed to incentivize 
additional customer order flow to the cPRIME Auction.
    The Exchange believes the proposed transaction fees for cQCC Orders 
are reasonable because the proposed amounts are identical to the fees 
assessed for QCC transactions and are in line with the amounts assessed 
at other Exchanges for similar transactions.\19\ Additionally, the 
proposed fees would be assessed to all non-Priority Customers alike.
---------------------------------------------------------------------------

    \19\ See BOX Options Exchange LLC (``BOX'') Fee Schedule, 
Section I(D) (BOX does not charge Public Customers but charges 
Professional Customers, Broker Dealers and Market Makers $0.20 per 
contract on both Agency and Contra Orders); see also Chicago Board 
Options Exchange (``CBOE'') Fee Schedule, ``QCC Rate Table,'' Page 5 
(CBOE charges non-Public Customers $0.17 per contract and does not 
charge Public Customers); see also NYSE Amex Options Fee Schedule, 
Section I.F (NYSE Amex charges Non-Customers $0.20 per contract, 
Specialists and e-Specialists $0.13 per contract, and does not 
charge Customer and Professional Customers).
---------------------------------------------------------------------------

    The Exchange believes the proposed rebate for the initiating order 
side of a cQCC transaction is reasonable because other competing 
exchanges also provide a rebate on the initiating order side.\20\ 
Additionally, the proposed rebate amount is within the range of the 
rebate amounts at the other competing exchanges.\21\ The Exchange 
believes the proposed rebate is equitable and not unfairly 
discriminatory because it applies to all Members that enter the 
initiating order (except for when both the initiator and contra-side 
orders are Priority Customers) and because it is intended to 
incentivize the sending of more cQCC Orders to the Exchange. The 
Exchange believes it is reasonable, equitable, and not unfairly 
discriminatory to not provide a rebate for the initiating order for 
cQCC transactions for which both the initiator and the contra-side 
orders are Priority Customers since Priority Customers are already 
incentivized by a reduced fee for submitting cQCC Orders. The Exchange 
believes that the proposed exclusion of cQCC Orders from the Market 
Maker Sliding Scale, the PCRP, and the PRP is reasonable because it 
enables cQCC Orders from all market participants to be subject to only 
the specific transaction fees as described above that are tailored 
specifically for encouraging market participants to transact cQCC 
Orders on the Exchange. The Exchange believes that the exclusion is 
equitable and not unfairly discriminatory because it ensures all market 
participants, other than Priority Customers, to be subject to the same 
transaction fee for cQCC Orders. While Priority Customers will benefit 
from a reduced transaction fee rate for cQCC Orders, excluding cQCC 
Orders from the PCRP enables a more equitable and not unfairly 
discriminatory outcome.
---------------------------------------------------------------------------

    \20\ See BOX Fee Schedule, Section I(D)(1); see also CBOE Fee 
Schedule, ``QCC Rate Table,'' Page 5; see also NYSE Amex Options Fee 
Schedule, Section I.F; see also Nasdaq ISE Fee Schedule, Section 
IV(A).
    \21\ See BOX Fee Schedule, Section I(D)(1) (a $0.15 per contract 
rebate will be applied to the Agency Order where at least one party 
to the QCC transaction is a Non-Public Customer); see also CBOE Fee 
Schedule, ``QCC Rate Table,'' Page 5 (a $0.10 per contract credit 
will be delivered to the TPH Firm that enters the order into CBOE 
Command but will only be paid on the initiating side of the QCC 
transaction); see also NYSE Amex Options Fee Schedule, Section I.F 
(a $0.07 credit is applied to Floor Brokers executing 300,000 or 
fewer contracts in a month and a $0.10 credit is applied to Floor 
Brokers executing more than 300,000 contracts in a month); see also 
Nasdaq ISE Fee Schedule, Section IV(A) (rebates range from $0.01 to 
$0.11 per contract).
---------------------------------------------------------------------------

    The Exchange believes that adding the C2C fee to the Fee Schedule 
is reasonable since it is clarifying the Exchange's existing practice 
and by adding such C2C Order fee to the Fee Schedule the Exchange 
believes that it will make it more transparent as to how the Exchange 
assesses such fee and avoid any confusion as to how such fee is 
assessed for simple (C2C) and complex (cC2C) orders. The Exchange 
believes that the proposed transaction fee for cC2C Orders is 
reasonable because the proposed amount is identical to the fee assessed 
for C2C transactions, which is currently $0.00. The proposed fees would 
be charged to all Priority Customers alike and the Exchange believes 
that assessing a $0.00 fee to Priority Customers is equitable and not 
unfairly discriminatory. By assessing a $0.00 fee to Priority Customer 
orders, the C2C and cC2C

[[Page 38971]]

transaction fees will not discourage the sending of Priority Customer 
orders.
    The Exchange believes that specifying that cPRIME Order and cQCC 
Order executions are not subject to marketing fees is reasonable, 
equitable and not unfairly discriminatory. The Exchange is seeking to 
encourage all participants, including Market Makers, to send cPRIME 
Orders and to respond to cPRIME Auction RFR messages and the Exchange 
believes that collecting marketing fees from Market Makers may 
discourage such participation. By encouraging as many participants as 
possible to respond, the Exchange believes that it will lead to greater 
opportunities for price improvement for all cPRIME Agency Orders, not 
just those entered on behalf of customers. For these reasons, the 
Exchange believes that excluding cPRIME Orders and responses from the 
marketing fees are reasonable, equitable, and not unfairly 
discriminatory. The Exchange believes that it is equitable and not 
unfairly discriminatory to continue to charge a marketing fee if an 
unrelated order executes in the cPRIME Auction, because that unrelated 
order is not subject to the specialized fee structure for cPRIME 
Auctions that is designed to incentivize participation. The market 
participant receives the benefit of a cPRIME Auction execution and 
would already expect to be charged a marketing fee that is no different 
than the fee the market participant was expecting to pay trading 
against unrelated orders outside the cPRIME Auction. The Exchange 
further believes that not assessing a Marketing Fee for contracts 
executed as a cQCC Order is equitable and not unfairly discriminatory 
because such order type originated from the same Member, thus obviating 
the purpose of the Marketing Fee.
    The Exchange believes that the proposed technical changes are 
consistent with Section 6(b)(5) of the Act because they are designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanisms of a free and open market and a national 
market system and, in general, to protect investors and the public 
interest. The Exchange believes it is appropriate to make the proposed 
technical corrections to its Fee Schedule so that Exchange Members have 
a clear and accurate understanding of the meaning of the Exchange's Fee 
Schedule.

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. The Exchange 
believes that the proposed change will enhance the competiveness of the 
Exchange relative to other exchanges that offer their own electronic 
crossing mechanisms and offer their own complex crossing order types. 
The Exchange believes that the proposed fees and rebates for 
participation in the cPRIME Auction, the cQCC fees, and the C2C and 
cC2C fees are not going to have an impact on intra-market competition 
based on the total cost for participants to transact in such order 
types versus the cost for participants to transact in the other order 
types available for trading on the Exchange. As noted above, the 
Exchange believes that the proposed pricing for the cPRIME Auction is 
comparable to that of other exchanges offering similar electronic price 
improvement mechanisms for complex orders,\22\ and the Exchange 
believes that, based on experience with electronic price improvement 
crossing mechanisms on other markets, market participants understand 
that the price-improving benefits offered by the cPRIME Auction justify 
the transaction costs associated with the cPRIME Auction. To the extent 
that there is a difference between non-cPRIME Auction transactions and 
cPRIME Auction transactions, the Exchange does not believe this 
difference will cause participants to refrain from responding to cPRIME 
Auctions. In addition, the Exchange does not believe that the proposed 
transaction fees and credits for these new complex crossing order types 
burden competition by creating a disparity of transaction fees between 
these order types and other order types. The Exchange expects to see 
robust competition within the cPRIME Auction to trade against the 
cPRIME Agency Order. The Exchange also expects to see robust 
competition in the trading of cQCC Orders and cC2C Orders, as the 
Exchange's pricing for those order types is competitive with the 
pricing of other competing Exchanges.
---------------------------------------------------------------------------

    \22\ See supra note 16.
---------------------------------------------------------------------------

    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues if they 
deem fee levels at a particular venue to be excessive. In such an 
environment, the Exchange must continually adjust its fees to remain 
competitive with other exchanges and to attract order flow to the 
Exchange. The Exchange believes that the proposed rule change reflects 
this competitive environment because it establishes a fee structure in 
a manner that encourages market participants to direct their order 
flow, to provide liquidity, and to attract additional transaction 
volume to the Exchange.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act,\23\ and Rule 19b-4(f)(2) \24\ thereunder. 
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.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \24\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2017-40 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-2017-40. 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

[[Page 38972]]

submission, all subsequent amendments, all written statements with 
respect to the proposed rule change that are filed with the Commission, 
and all written communications relating to the proposed rule change 
between the Commission and any person, other than those that may be 
withheld from the public in accordance with the provisions of 5 U.S.C. 
552, will be available for Web site viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE., Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of such filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-MIAX-2017-40, and should be 
submitted on or before September 6, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-17277 Filed 8-15-17; 8:45 am]
BILLING CODE 8011-01-P