Document ID: SEC-2019-1190-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Miami International Securities Exchange, LLC
Posted Date: 2019-08-20T04:00Z

[Federal Register Volume 84, Number 161 (Tuesday, August 20, 2019)]
[Notices]
[Pages 43226-43231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17858]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86663; File No. SR-MIAX-2019-34]

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

August 14, 2019.
    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4

[[Page 43227]]

thereunder,\2\ notice is hereby given that on July 31, 2019, 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'').
    While changes to the Fee Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated these changes to be 
operative on August 1, 2019.
    The text of the proposed rule change is available on the Exchange's 
website 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 the Fee Schedule to (i) increase the 
amount of the per contract credit assessable to Agency Orders (defined 
below) in a PRIME Auction (``PRIME Agency Order Credit'') for Members 
\3\ in Tiers 2, 3 and 4 of the Priority Customer Rebate Program 
(``PCRP'') \4\ and (ii) lower the separate, additional PRIME Agency 
Order Credit that is also available for Priority Customer \5\ PRIME 
Agency Orders executed over a monthly threshold of 0.60% of the Options 
Clearing Corporation (``OCC'') customer volume for Members who are in 
PCRP Tier 3 or higher.
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    \3\ 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.
    \4\ Under the PCRP, MIAX credits each Member the per contract 
amount resulting from each Priority Customer order transmitted by 
that Member which is executed electronically on the Exchange in all 
multiply-listed option classes (excluding, 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 Exchange 
Rule 1400), provided the Member meets certain percentage thresholds 
in a month as described in the PCRP table. See Fee Schedule, Section 
(1)(a)iii.
    \5\ ``Priority Customer'' means a person or entity that (i) is 
not a broker or dealer in securities, and (ii) does not place more 
than 390 orders in listed options per day on average during a 
calendar month for its own beneficial accounts(s). A ``Priority 
Customer Order'' means an order for the account of a Priority 
Customer. See Exchange Rule 100.
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Background
    PRIME is a process by which a Member may electronically submit for 
execution an order it represents as agent (an ``Agency Order'') against 
principal interest and/or solicited interest. The Member that submits 
the Agency Order (``Initiating Member'') agrees to guarantee the 
execution of the Agency Order by submitting a contra-side order 
representing principal interest or solicited interest (``Contra-Side 
Order''). When the Exchange receives a properly designated Agency Order 
for Auction processing, a request for response (``RFR'') detailing the 
option, side, size and initiating price is broadcasted to MIAX 
participants up to an optional designated limit price. Members may 
submit responses to the RFR, which can be either an Auction or Cancel 
(``AOC'') order or an AOC eQuote. The PRIME mechanism is used for 
orders on the Exchange's Simple Order Book.\6\ The Exchange notes that 
for Complex Orders \7\ on the Strategy Book,\8\ the Exchange's cPRIME 
\9\ mechanism operates in the same manner for processing and execution 
of cPRIME Orders that is used for PRIME Orders on the Simple Order 
Book. The Exchange is not proposing to amend the PCRP rebates for 
cPRIME orders at this time.
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    \6\ The ``Simple Order Book'' is the Exchange's regular 
electronic book of orders and quotes. See Exchange Rule 518(a)(15).
    \7\ 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).
    \8\ The ``Strategy Book'' is the Exchange's electronic book of 
complex orders and complex quotes. See Exchange Rule 518(a)(17).
    \9\ ``cPRIME'' is the process by which a Member may 
electronically submit a ``cPRIME Order'' (as defined in Rule 
518(b)(7)) it represents as agent (a ``cPRIME Agency Order'') 
against principal or solicited interest for execution (a ``cPRIME 
Auction''), subject to the restrictions set forth in Exchange Rule 
515A, Interpretation and Policy .12. See Exchange Rule 515A.
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    The Priority Customer rebate payment is calculated from the first 
executed contract at the applicable threshold per contract credit with 
rebate payments made at the highest achieved volume tier for each 
contract traded in that month. 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 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). 
Volume for transactions in both simple and complex orders are 
aggregated to determine the appropriate volume tier threshold 
applicable to each transaction. Volume is recorded for and credits are 
delivered to the Member that submits the order to MIAX. MIAX aggregates 
the contracts resulting from Priority Customer orders transmitted and 
executed electronically on MIAX from Members and their Affiliates for 
purposes of the thresholds described in the PCRP table.
Proposed Rule Change
    Pursuant to the PCRP, the Exchanges assesses an Agency Order Credit 
for PRIME Agency Orders. The Exchange

[[Page 43228]]

currently credits each Member $0.10 per contract for each Priority 
Customer order submitted into the PRIME Auction as a PRIME Agency Order 
in all Tiers. The Exchange proposes to increase the PRIME Agency Order 
Credit for Members who achieve the volume thresholds applicable to 
Tiers 2, 3 and 4 from $0.10 to $0.11 per contract.
    The Exchange also proposes to lower the additional PRIME Agency 
Order Credit for Priority Customer PRIME Agency Orders executed over a 
threshold of 0.60% of OCC customer volume for Members who are in PCRP 
Tier 3 or higher. Currently, any Member or its Affiliate \10\ that 
qualifies for PCRP volume Tiers 3 or higher will be credited 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 above 
0.60% of national customer volume in multiply-listed options classes 
listed on MIAX during the relevant month (excluding 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). Volume is recorded 
for and credits are delivered to the Member Firm that submits the order 
to MIAX. The current potential $0.02 per contract credit is in addition 
to the current credit of $0.10 per contract for all Tiers that applies 
to PRIME Agency Order transactions for Priority Customer orders.
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    \10\ For purposes of the 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). An ``Appointed Market Maker'' is a MIAX Market Maker (who 
does not otherwise have a corporate affiliation based upon common 
ownership with an EEM) that has been appointed by an EEM and an 
``Appointed EEM'' is an EEM (who does not otherwise have a corporate 
affiliation based upon common ownership with a MIAX Market Maker) 
that has been appointed by a MIAX Market Maker, pursuant to the 
following process. A MIAX Market Maker appoints an EEM and an EEM 
appoints a MIAX Market Maker, for the purposes of the Fee Schedule, 
by each completing and sending an executed Volume Aggregation 
Request Form by email to membership@miaxoptions.com no later than 2 
business days prior to the first business day of the month in which 
the designation is to become effective. Transmittal of a validly 
completed and executed form to the Exchange along with the 
Exchange's acknowledgement of the effective designation to each of 
the Market Maker and EEM will be viewed as acceptance of the 
appointment. The Exchange will only recognize one designation per 
Member. A Member may make a designation not more than once every 12 
months (from the date of its most recent designation), which 
designation shall remain in effect unless or until the Exchange 
receives written notice submitted 2 business days prior to the first 
business day of the month from either Member indicating that the 
appointment has been terminated. Designations will become operative 
on the first business day of the effective month and may not be 
terminated prior to the end of the month. Execution data and reports 
will be provided to both parties. See Fee Schedule, Section 
(1)(a)(i).
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    The Exchange now proposes to lower the additional PRIME Agency 
Order Credit for Priority Customer PRIME Agency Orders over a threshold 
of 0.60% of OCC customer volume for Members who are in PCRP Tier 3 or 
higher from $0.02 per contract to $0.01 per contract. The newly 
proposed additional $0.01 per contract credit, for Members that achieve 
PCRP Tier 3 or higher and the described threshold, will be added to the 
newly proposed PRIME Agency Order Credit of $0.11 per contract for 
Members in Tiers 3 or 4 for PRIME Agency Order transactions for 
Priority Customer orders.
    The Exchange believes these proposed changes (which increase 
certain credit amounts from $0.10 per contract to $0.11 per contract, 
and decrease the additional credit amount from $0.02 per contract to 
$0.01 per contract) will encourage market participants to submit more 
Priority Customer PRIME Agency Orders and therefore increase Priority 
Customer order flow, resulting in increased liquidity which benefits 
all Exchange participants by providing more trading opportunities and 
tighter spreads.
    The Commission has repeatedly expressed its preference for 
competition over regulatory intervention in determining prices, 
products, and services in the securities markets. In Regulation NMS, 
the Commission highlighted the importance of market forces in 
determining prices and self-regulatory organization (``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.'' \11\ There are currently 16 registered options exchanges 
competing for order flow. Based on publicly-available information, and 
excluding index-based options, no single exchange has exceeded 
approximately 18% of the market share of executed volume of multiply-
listed equity and exchange-traded fund (``ETF'') options trades as of 
July 25, 2019, for the month of July 2019.\12\ Therefore, no exchange 
possesses significant pricing power in the execution of multiply-listed 
equity and ETF options order flow. More specifically, for all of June 
2019, the Exchange had a total market share of 3.73% of all equity 
options volume.\13\ The Exchange believes that the ever-shifting market 
shares among the exchanges from month to month demonstrates that market 
participants can shift order flow (as further described below), or 
discontinue or reduce use of certain categories of products, in 
response to transaction and non-transaction fee changes. For example, 
on March 1, 2019, the Exchange filed with the Commission an immediately 
effective filing to decrease certain credits assessable to Members 
pursuant to the PCRP.\14\ The Exchange experienced a decrease in total 
market share between the months of February and March of 2019. 
Accordingly, the Exchange believes that the March 1, 2019 fee change 
may have contributed to the decrease in the Exchange's market share 
and, as such, the Exchange believes competitive forces constrain 
options exchange transaction and non-transaction fees.
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    \11\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005).
    \12\ The OCC publishes options and futures volume in a variety 
of formats, including daily and monthly volume by exchange, 
available at: https://www.theocc.com/market-data/volume/default.jsp.
    \13\ See id.
    \14\ See Securities Exchange Act Release No. 85301 (March 13, 
2019), 84 FR 10166 (March 19, 2019) (SR-MIAX-2019-09).
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    The Exchange cannot predict with certainty whether any Priority 
Customers would avail themselves of the proposed fee change, but the 
Exchange believes that between two and four Members may achieve the 
applicable Tier volume thresholds to receive the proposed increased 
PRIME Agency Order Credit for Members in Tiers 2, 3 and 4 of the PCRP. 
Similarly, the Exchange cannot predict with certainty whether any 
Member will achieve the separate, additional PRIME Agency Order Credit 
that is also available for Priority Customer PRIME Agency Orders 
executed over a monthly threshold of 0.60% of OCC customer volume for 
Members in PCRP Tier 3 or higher, but the Exchange believes that no 
Member will be currently impacted as no Member currently reaches such 
threshold.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \15\

[[Page 43229]]

in general, and furthers the objectives of Section 6(b)(4) of the Act 
\16\ in particular, in that it is an equitable allocation of reasonable 
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.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes its proposal to increase the PRIME Agency 
Order Credit for Members in Tiers 2, 3 and 4 of the PCRP and to lower 
the separate, additional PRIME Agency Order Credit that is also 
available for Priority Customer Orders executed over a monthly 
threshold of 0.60% of OCC customer volume for Members who are in PCRP 
Tier 3 or higher provides for the equitable allocation of reasonable 
dues and fees and is not unfairly discriminatory for the following 
reasons. First, the Exchange operates in a highly competitive market. 
The Commission has repeatedly expressed its preference for competition 
over regulatory intervention in determining prices, products, and 
services in the securities markets. In Regulation NMS, 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.'' \17\ There are currently 16 registered options 
exchanges competing for order flow. Based on publicly-available 
information, and excluding index-based options, no single exchange has 
exceeded approximately 18% of the market share of executed volume of 
multiply-listed equity and ETF options trades as of July 25, 2019, for 
the month of July 2019.\18\ Therefore, no exchange possesses 
significant pricing power in the execution of multiply-listed equity 
and ETF options order flow. More specifically, for all of June 2019, 
the Exchange had a total market share of 3.73% for all equity options 
volume.\19\
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    \17\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005).
    \18\ See supra note 12.
    \19\ See id.
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    The Exchange believes that the ever-shifting market shares among 
the exchanges from month to month demonstrates that market participants 
can shift order flow, or discontinue or reduce use of certain 
categories of products, in response to transaction and/or non-
transaction fee changes.
    For example, on March 1, 2019, the Exchange filed with the 
Commission an immediately effective filing to decrease certain credits 
assessable to Members pursuant to the PCRP.\20\ The Exchange 
experienced a decrease in total market share between the months of 
February and March of 2019. Accordingly, the Exchange believes that the 
March 1, 2019 fee change may have contributed to the decrease in the 
Exchange's market share and, as such, the Exchange believes competitive 
forces constrain options exchange transaction and non-transaction fees 
and market participants can shift order flow based on fee changes 
instituted by the exchanges.
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    \20\ See supra note 14.
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    Second, the Exchange believes its proposal to increase the PRIME 
Agency Order Credit for Members in Tiers 2, 3 and 4 of the PCRP and to 
lower the additional PRIME Agency Order Credit for Priority Customer 
orders over a threshold of 0.60% of OCC customer volume for Members who 
are in PCRP Tier 3 or higher is an equitable allocation of reasonable 
dues and fees pursuant to Section 6(b)(4) of the Act \21\ because the 
proposed changes are designed to incentivize overall Priority Customer 
order flow. The Exchange believes that with the proposed changes, 
providers of Priority Customer order flow will be incentivized to send 
that Priority Customer order flow to the Exchange in order to obtain 
the highest volume threshold and receive credits in a manner that 
enables the Exchange to improve its overall competitiveness and 
strengthen its market quality for all market participants. The Exchange 
believes that increased Priority Customer order flow will attract 
liquidity providers, which in turn should make the MIAX marketplace an 
attractive venue where Market Makers may submit narrow quotations with 
greater size, deepening and enhancing the quality of the MIAX 
marketplace. This should provide more trading opportunities and tighter 
spreads for other market participants and result in a corresponding 
increase in order flow from such other market participants. 
Additionally, the Exchange believes that for competitive and business 
reasons, it is appropriate to lower the additional PRIME Agency Order 
Credit for Priority Customer PRIME Agency Orders over a threshold of 
0.60% of OCC customer volume for Members who are in PCRP Tier 3 or 
higher from $0.02 to $0.01. As the Exchange previously noted, no Member 
currently achieves this threshold and, as such, the Exchange believes 
that by lowering this additional credit while increasing the PRIME 
Agency Order Credit for Members in Tiers 2, 3 and 4 of the PCRP, will 
incentivize order flow to the Exchange, providing more liquidity, to 
the benefit of all market participants, because it will likely result 
in a net increase in credits paid to Members.
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    \21\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed rule changes would be an 
equitable allocation of reasonable dues and fees and would not permit 
unfair discrimination between market participants. The Exchange cannot 
predict with certainty whether any Priority Customers would avail 
themselves of the proposed fee change, but the Exchange believes that 
between two and four Members may achieve the applicable Tier volume 
thresholds to receive the proposed increased PRIME Agency Order Credit 
for Members in Tiers 2, 3 and 4 of the PCRP. Similarly, the Exchange 
cannot predict with certainty whether any Member will achieve the 
separate, additional PRIME Agency Order Credit that is also available 
for Priority Customer PRIME Agency Orders executed over a monthly 
threshold of 0.60% of OCC customer volume for Members in PCRP Tier 3 or 
higher, but the Exchange believes that no Member will be currently 
impacted as no Member currently reaches such threshold.
    The Exchange also believes its proposal is consistent with Section 
6(b)(5) of the Act \22\ and is designed to prevent fraudulent and 
manipulative acts and practices, promotes just and equitable principles 
of trade, fosters cooperation and coordination with persons engaged in 
regulating, clearing, setting, processing information with respect to, 
and facilitating transaction in securities, removes impediments to and 
perfects the mechanism of a free and open market and a national market 
system, and, in general, protects investors and the public interest; 
and is not designed to permit unfair discrimination. This is because 
the Exchange believes the proposed changes will incentivize Priority 
Customer order flow and an increase in Priority Customer order flow 
will bring greater volume and liquidity, which benefits all market 
participants by providing more trading opportunities and tighter

[[Page 43230]]

spreads. 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. Further, based on the current 
Tier volume thresholds achieved by the Exchange's Members and the 
potential changes going forward as a result of the proposed fee change, 
the Exchange believes that the proposed increase to certain credit 
amounts from $0.10 per contract to $0.11 per contract and proposed 
decrease to the additional credit amount from $0.02 per contract to 
$0.01 per contract may not result in any Member receiving a lower 
credit amount per contract, and may result in two to four Members 
receiving a higher credit amount per contract.
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    \22\ 15 U.S.C. 78f(b)(1) and (b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\23\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Instead, as discussed above, the Exchange believes 
that the proposed changes would encourage the submission of additional 
liquidity to a public exchange, thereby promoting market depth, price 
discovery and transparency and enhancing order execution opportunities 
for all market participants. As a result, the Exchange believes that 
the proposed change furthers the Commission's goal in adopting 
Regulation NMS of fostering integrated competition among orders.
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    \23\ 15 U.S.C. 78f(b)(8).
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Intra-Market Competition
    The Exchange does not believe that other market participants at the 
Exchange would be placed at a relative disadvantage by the proposed 
changes to increase the PRIME Agency Order Credit for Members in Tiers 
2, 3 and 4 of the PCRP and to lower the additional PRIME Agency Order 
Credit for Priority Customer PRIME Agency Orders over a threshold of 
0.60% of OCC customer volume for Members who are in PCRP Tier 3 or 
higher. The proposed changes are designed to attract additional order 
flow to the Exchange. Accordingly, the Exchange believes that 
increasing the PRIME Agency Order Credit for Members in Tiers 2 through 
4 of the PCRP and lowering the additional PRIME Agency Order Credit for 
Priority Customer orders over a threshold of 0.60% of OCC customer 
volume for Members in PCRP Tier 3 or higher will not impose any burden 
on competition not necessary or appropriate in furtherance of the 
purposes of the Act because it will continue to encourage Priority 
Customer order flow and 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. Further, based on the current Tier volume thresholds achieved 
by the Exchange's Members and the potential changes going forward as a 
result of the proposed fee change, the Exchange believes that the 
proposed increase to certain credit amounts from $0.10 per contract to 
$0.11 per contract and proposed decrease to the additional credit 
amount from $0.02 per contract to $0.01 per contract may not result in 
any Member receiving a lower credit amount per contract, and may result 
in two to four Members receiving a higher credit amount per contract.
Inter-Market Competition
    The Exchange 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. There are currently 16 
registered options exchanges competing for order flow. Based on 
publicly-available information, and excluding index-based options, no 
single exchange has exceeded approximately 18% of the market share of 
executed volume of multiply-listed equity and ETF options trades as of 
July 25, 2019, for the month of July 2019.\24\ Therefore, no exchange 
possesses significant pricing power in the execution of multiply-listed 
equity and ETF options order flow. More specifically, for all of June 
2019, the Exchange had a total market share of 3.73% for all equity 
options volume.\25\ In such an environment, the Exchange must 
continually adjust its transaction and non-transaction fees to remain 
competitive with other exchanges and to attract order flow. The 
Exchange believes that the proposed rule changes reflect this 
competitive environment because they modify the Exchange's fees in a 
manner that encourages market participants to provide Priority Customer 
liquidity and to send order flow to the Exchange. To the extent this is 
achieved, all the Exchange's market participants should benefit from 
the improved market quality.
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    \24\ See supra note 12.
    \25\ See id.
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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,\26\ and Rule 19b-4(f)(2) \27\ 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.
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    \26\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \27\ 17 CFR 240.19b-4(f)(2).
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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-2019-34 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-2019-34. 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 website (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

[[Page 43231]]

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 website 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. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-MIAX-2019-34 and should be 
submitted on or before September 10, 2019.
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    \28\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-17858 Filed 8-19-19; 8:45 am]
BILLING CODE 8011-01-P