Document ID: SEC-2014-1035-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Miami International Securities Exchange LLC
Posted Date: 2014-06-23T04:00Z

[Federal Register Volume 79, Number 120 (Monday, June 23, 2014)]
[Notices]
[Pages 35605-35607]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14542]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72410; File No. SR-MIAX-2014-27]

Self-Regulatory Organizations: Notice of Filing and Immediate 
Effectiveness of a Proposed Rule Change by Miami International 
Securities Exchange LLC To Establish a Billing Dispute Practice

June 17, 2014.
    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 June 9, 2014, Miami International Securities 
Exchange LLC (``MIAX'' or ``Exchange'') filed with the Securities and 
Exchange Commission (``Commission'') a proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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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 various Exchange Rules 
related to fees and the cover page of the MIAX Options Fee Schedule.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.miaxoptions.com/filter/wotitle/rule_filing, at 
MIAX's principal office, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of 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 Rules 200(e), 208, and 1203. The

[[Page 35606]]

Exchange also proposes to amend the Fee Schedule to add language 
regarding fee disputes.
    First, the Exchange proposes to amend Rule 200(e) to eliminate the 
description of when the Trading Permit fee is due and payable each 
month. Currently, Rule 200(e) states that the Trading Permit fee is due 
and payable in full on or before the first day on which the Trading 
Permit is effective. However, as the Exchange's Fee Schedule indicates, 
the monthly Trading Permit fees are calculated for certain Members \3\ 
based upon the greatest number of assigned classes on any given day 
within a particular calendar month. The Exchange proposes to amend Rule 
200(e) to eliminate the statement indicating that the entire Trading 
Permit fee shall be due and payable on or before the first day on which 
the Trading Permit is effective because the Exchange does not actually 
calculate and invoice the Trading Permit fee until the month is 
completed.
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    \3\ The amount of the monthly Trading Permit fee for a Lead 
Market Maker (``LMM'') or a Registered Market Maker (``RMM'') is 
calculated based on the number of their assigned classes. The amount 
of the monthly Trading Permit fee for an Electronic Exchange Member 
(``EEM'') is a flat rate and not dependent upon the number of 
classes traded or any other such measure. Nevertheless, the 
Exchange, for consistency purposes, invoices Trading Permit fees in 
arrears for all Members.
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    Second, the Exchange proposes to amend Rule 208 to provide that the 
monthly Exchange invoices are to be paid in full on a timely basis. 
Rule 208 describes the MIAX Billing System and the requirement to 
designate a Clearing Member for the payment of Exchange invoices. Rule 
208 currently requires the designated Clearing Member to pay on a 
timely basis ``any amount that is not disputed'' by the Member rather 
than the full amount of the Exchange invoice. The Exchange proposes to 
amend Rule 208 to provide that the designated Clearing Member shall pay 
to the Exchange on a timely basis the full amount of each monthly 
Exchange invoice because, as discussed in detail below, the Exchange 
proposes to handle fee disputes in Proposed Rule 1203(e). In accordance 
with the Proposed Rule 1203(e), the Exchange expects all invoices to be 
paid in full including any disputed amount. If the dispute is resolved 
in the Member's favor, any disputed amount will be subsequently 
credited to the Clearing Member on behalf of that Member's account. The 
Exchange believes that this change will avoid confusion because it will 
be consistent with Proposed Rule 1203(e). In addition, the Exchange 
proposes replacing the term ``designated'' in the first sentence of 
Rule 208 with the term ``assessed'' to more accurately reflect the 
action being taken by the Exchange.
    The Exchange proposes to create Rule 1203(e) to establish a billing 
practice to prevent Members from contesting their bills long after they 
have been sent an invoice. In accordance with Proposed Rule 1203(e), 
all disputes concerning fees, dues or charges assessed by the Exchange 
must be submitted to the Exchange in writing and must be accompanied by 
supporting documentation. All disputes related to fees, dues or other 
charges must be submitted to the Exchange no later than sixty (60) days 
after the date of the monthly invoice. All Exchange invoices are due in 
full on a timely basis and payable in accordance with Rule 208. Any 
disputed amount resolved in the Member's favor will be subsequently 
credited to the Clearing Member's account at the Clearing Corporation. 
The Exchange provides Members with both daily and monthly fee reports 
and thus believes Members should be aware of any potential billing 
errors within sixty calendar days of issuance of an invoice. Requiring 
that Members dispute an invoice within this time period will encourage 
them to promptly review their invoices so that any disputed charges can 
be addressed in a timely manner while the information and data 
underlying those charges (e.g., applicable fees and order information) 
is still easily and readily available. This practice will avoid issues 
that may arise when Members do not dispute an invoice in a timely 
manner, and will conserve Exchange resources that would have to be 
expended to resolve untimely billing disputes. The Exchange notes that 
this type of provision is common among other exchanges.\4\ In addition, 
the Exchange proposes to state that all billing disputes must be 
submitted to the Exchange in writing,\5\ and must be accompanied by 
supporting documentation. The Exchange believes that this requirement, 
which is also similar to requirements of other exchanges,\6\ will 
further streamline the billing dispute process. In addition, in order 
for Members to be fully aware of this rule regarding fee disputes, the 
Exchange proposes to place a statement on the cover of the MIAX Options 
Fee Schedule and at the bottom of each invoice regarding the handling 
of billing disputes.
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    \4\ See e.g., Securities Exchange Act Release Nos. 62661 (August 
6, 2010), 75 FR 49544 (August 13, 2010) (SR-Phlx-2010-110); 71297 
(January 14, 2014), 79 FR 3442 (January 21, 2014) (SR-ISE-2014-02).
    \5\ The Exchange invoice specifies contact information for 
billing inquiries.
    \6\ See supra note 4.
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2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) \7\ of the Act in general, and furthers the 
objectives of Section 6(b)(4) \8\ of the Act in particular, in that it 
is designed to provide for an equitable allocation of reasonable dues, 
fees and other charges among Exchange Members and other persons using 
its facilities. In addition, the Exchange believes the proposed rule 
change also furthers the objectives of Section 6(b)(5) of the Act \9\ 
in particular, in that it is designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and, in 
general, to protect investors and the public interest, and it is not 
designed to permit unfair discrimination among customers, brokers, or 
dealers. The Exchange's proposal relates to how fees are invoiced and 
collected and will protect investors and the public interest by 
eliminating potential confusion that could be caused by the existing 
language used to describe the Exchange's billing practices. The 
Exchange's proposal provides for the equitable allocation of fees, dues 
and other charges because it applies equally to all Members and any 
persons using the facilities or services of the Exchange.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
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    Additionally, the Exchange believes the requirement that all 
invoices be paid in full and billing disputes be submitted within 60 
days after the date of the invoice is reasonable because the Exchange 
provides ample tools to properly and swiftly monitor and account for 
various charges incurred in a given month. Also, the proposal is 
equitable because it equally applies to all Members. The Exchange's 
administrative costs will be lowered as a result of this policy. The 
proposed provision regarding fee disputes promotes the protection of 
investors and the public interest by providing a clear and concise 
mechanism in the Exchange Rules for Members to dispute fees and the 
Exchange to review such disputes in a timely manner. In addition, the 
proposed 60 day limitation is fair and equitable since it will be 
implemented prospectively on all Members, only applying to invoices 
issued after the proposed rule change becomes operative.

[[Page 35607]]

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule changes to 
revise Exchange Rules related to fees and to add a new provision 
regarding fee disputes should reduce possible confusion regarding the 
procedures for establishing, invoicing and collecting fees, dues and 
other charges. Since the Exchange proposes no substantive changes 
regarding fees applicable to Members, the proposal does not impose any 
burden on competition.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) \11\ 
thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-MIAX-2014-27 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-MIAX-2014-27. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-MIAX-2014-27 and should be 
submitted on or before July 14, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-14542 Filed 6-20-14; 8:45 am]
BILLING CODE 8011-01-P