Notice2021-15809
Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule for the Complex PRIME Agency Order Credit
Primary source
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Published
July 26, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 140 (Monday, July 26, 2021)</title>
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[Federal Register Volume 86, Number 140 (Monday, July 26, 2021)]
[Notices]
[Pages 40104-40108]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-15809]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92448; File No. SR-MIAX-2021-34]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule for the Complex PRIME
Agency Order Credit
July 20, 2021.
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 July 12, 2021, 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 the MIAX Options Fee
Schedule (the ``Fee Schedule'').
The text of the proposed rule change is available on the Exchange's
website at <a href="http://www.miaxoptions.com/rule-filings">http://www.miaxoptions.com/rule-filings</a>, 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) modify the
Priority Customer Rebate Program (``PCRP'') \3\ as it pertains to per
contract credits for complex PRIME (``cPRIME'') \4\ Agency Orders for
Priority Customers; and (ii) to remove the per contract credit cap for
cPRIME Agency Orders for Priority Customers and the associated waiver
of same which was in effect until June 30, 2021. The Exchange initially
filed this proposal on July 1, 2021 (SR-MIAX-2021-33) and withdrew such
filing on July 12, 2021. The Exchange proposes to implement the fee
change effective July 12, 2021.
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\3\ Under the PCRP, MIAX Options 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 Priority Customer Rebate
Program table. See Fee Schedule, Section (1)(a)iii.
\4\ ``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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Background
Exchange Rule 518(b)(7) defines a cPRIME Order as a type of complex
order \5\ that is submitted for participation in a cPRIME Auction and
trading of cPRIME Orders is governed by Rule 515A, Interpretation and
[[Page 40105]]
Policies .12.\6\ 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.\7\ PRIME is a process by which a Member \8\ 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 \9\ or an AOC eQuote.\10\ A cPRIME Auction is the
price-improvement mechanism of the Exchange's System pursuant to which
an Initiating Member electronically submits a complex 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
against principal or solicited interest, or (ii) automatically match
against principal or solicited interest, the price and size of a RFR
that is broadcast to MIAX participants up to an optional designated
limit price. Such responses are defined as cPRIME AOC Responses or
cPRIME eQuotes. The PRIME mechanism is used for orders on the
Exchange's Simple Order Book.\11\ The cPRIME mechanism is used for
Complex Orders \12\ on the Exchange's Strategy Book,\13\ with the
cPRIME mechanism operating in the same manner for processing and
execution of cPRIME Orders that is used for PRIME Orders on the Simple
Order Book.
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\5\ 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. A complex order can also be a ``stock-option'' order,
which is an order to buy or sell a stated number of units of an
underlying security coupled with the purchase or sale of options
contract(s) on the opposite side of the market, subject to certain
contingencies set forth in the proposed rules governing complex
orders. For a complete definition of a ``complex order,'' see
Exchange Rule 518(a)(5). See also Securities Exchange Act Release
No. 78620 (August 18, 2016), 81 FR 58770 (August 25, 2016) (SR-MIAX-
2016-26).
\6\ 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).
\7\ Id.
\8\ 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.
\9\ An Auction-or-Cancel or ``AOC'' order is a limit order used
to provide liquidity during a specific Exchange process (such as the
Opening Imbalance process described in Rule 503) with a time in
force that corresponds with that event. AOC orders are not displayed
to any market participant, are not included in the MBBO and
therefore are not eligible for trading outside of the event, may not
be routed, and may not trade at a price inferior to the away
markets. See Exchange Rule 516(b)(4).
\10\ An Auction or Cancel or ``AOC'' eQuote is a quote submitted
by a Market Maker to provide liquidity in a specific Exchange
process (such as the Opening Imbalance Process described in Rule
503) with a time in force that corresponds with the duration of that
event and will automatically expire at the end of that event. AOC
eQuotes are not displayed to any market participant, are not
included in the MBBO and therefore are not eligible for trading
outside of the event. An AOC eQuote does not automatically cancel or
replace the Market Maker's previous Standard quote or eQuote. See
Exchange Rule 517(a)(2)(ii).
\11\ The ``Simple Order Book'' is the Exchange's regular
electronic book of orders and quotes. See Exchange Rule 518(a)(15).
\12\ See supra note 6. 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).
\13\ The ``Strategy Book'' is the Exchange's electronic book of
complex orders and complex quotes. See Exchange Rule 518(a)(17).
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Removal of Contract Cap
In conjunction with the implementation of cPRIME Orders on the
Exchange, the Exchange amended its Priority Customer Rebate Program to
establish a per contract credit rate for cPRIME Agency Orders for
Priority Customers.\14\ The Exchange limited the cPRIME Agency Order
Credit to be payable only to the first 1,000 contracts per leg for each
cPRIME Agency Order in all tiers under the PCRP in its filing on August
1, 2018.\15\ On February 28, 2020, the Exchange amended the Fee
Schedule to waive the 1,000 contract cap per leg for cPRIME Agency
Order rebates for all tiers under the PCRP from March 1, 2020, until
May 31, 2020.\16\ The Exchange subsequently extended the waiver from
June 1, 2020, until June 30, 2021, in a series of filings beginning
June 2020.\17\ The Exchange now proposes to remove footnote ``*'' in
Section (1)(a)(iii) of the Fee Schedule in its entirety to remove the
per contract credit cap of 1,000 contracts and to also eliminate the
waiver of the contract cap per leg for cPRIME Agency Order rebates for
all tiers under the PCRP.
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\14\ See Securities Exchange Act Release No. 81372 (August 10,
2017) 82 FR 38964 (August 16, 2017) (SR-MIAX-2017-40).
\15\ See Securities Exchange Act Release No.83797 (August 8,
2018), 83 FR 40373 (August 14, 2018) (SR-MIAX-2018-22).
\16\ See Securities Exchange Act Release No. 88349 (March 10,
2020), 85 FR 14995 (March 16, 2020) (SR-MIAX-2020-05).
\17\ See Securities Exchange Act Release Nos. 89035 (June 9,
2020), 85 FR 36249 (June 15, 2020) (SR-MIAX-2020-12) (Extending the
waiver period from June 1, 2020, until July 31, 2020); 89530 (August
12, 2020), 85 FR 50845 (August 18, 2020) (SR-MIAX-2020-26)
(Extending the waiver period from July 31, 2020, until August 31,
2020); 89771 (September 4, 2020), 85 FR 55873 (September 10, 2020)
(SR-MIAX-2020-28) (Extending the waiver period from August 31, 2020,
until December 31, 2020); 90818 (December 29, 2020), 86 FR 350
(January 5, 2021) (SR-MIAX-2020-40) (Extending the waiver period
from December 31, 2020, until March 31, 2021); and 91505 (April 8,
2021), 86 FR 19677 (April 14, 2021) (SR-MIAX-2021-07) (Extending the
waiver period from April 1, 2021, until June 30, 2021).
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cPRIME Agency Order per Contract Credit
In conjunction with the removal of the per credit cap of 1,000
contracts as described above, the Exchange now proposes to adopt a new
table under the PCRP for cPRIME Agency Orders for Priority Customers
where the max leg of the order is greater than 1,000 contracts. The
table will provide a tiered agency credit rate for cPRIME Agency Orders
for Priority Customers dependent upon the break-up percentage and the
largest leg of the order being greater than 1,000 contracts for Members
in PCRP Tiers 1-4, unless the Member is eligible to receive the
alternative cPRIME Agency Order Credit amount for cPRIME Agency Orders
in Tier 4 of the PRCP,\18\ in which case those orders will earn a
credit of $0.12.
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\18\ Under the PCRP, any Member or its Affiliate that qualifies
for Priority Customer Rebate Program tier 4 and executes Priority
Customer standard, non-paired complex volume at least equal to or
greater than three (3) times their Priority Customer cPRIME Agency
Order volume, on a monthly basis, will receive a credit of $0.12 per
contract for cPRIME Agency Orders instead of the credit otherwise
applicable to such orders in tier 4.
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Orders that have a max leg size of 1,000 contracts or less will
continue to receive the agency credit described in PCRP Tier 1-4,
unless the Member is eligible to receive the alternative cPRIME Agency
Order Credit amount for cPRIME Agency Orders in Tier 4 of the PCRP, in
which case the order will earn a per contract credit of $0.12.\19\ The
Exchange proposes to adopt new footnote ``*'' to state that for cPRIME
Agency Orders with a max leg size of 1,000 contracts or less, the
Exchange will assess the credits as described in the Priority Customer
Rebate Program table for Tiers 1-4 regardless of the Order Break-up
percentage. Additionally, the break-up credits described in section
(1)(a)(vi) of the Fee Schedule will continue to apply.
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\19\ Id.
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The table will provide a per contract agency credit based upon the
break-up percentage of the order. Specifically, orders with a break-up
% of 0-10% will earn a credit of $0.05 per contract; orders with a
break-up percentage
[[Page 40106]]
greater than 10% to, and including 20%, will earn a per contract credit
of $0.06; orders with a break-up percentage greater than 20% to, and
including 30%, will earn a per contract credit of $0.07; orders with a
break-up percentage greater than 30% to, and including 40%, will earn a
per contract credit of $0.08; orders with a break-up percentage greater
than 40% will earn a per contract credit of $0.10, unless the Member is
eligible to receive the alternative cPRIME Agency Order Credit amount
for cPRIME Agency Orders in Tier 4 of the PCRP, in which case the order
will earn a per contract credit of $0.12.\20\
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\20\ See supra note 18.
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For example, if the cPRIME Agency Order has two legs (one for 400
contracts and the other for 1,200 contracts) and trades 30% with an AOC
Response, the order would receive an agency credit of $0.07 per
contract for all legs of the order, as the max leg of the order was
greater than 1,000 contracts and 30% of the order was broken up. The
portion of the order that was broken up will also receive the agency
credit of $0.07 per contract.
The decision to offer tiered cPRIME agency credits and to remove
the credit cap is based on an analysis of current revenue and volume
levels and is designed to encourage Priority Customer order flow to the
Exchange.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \21\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \22\ 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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\21\ 15 U.S.C. 78f(b).
\22\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes its proposal provides for the equitable
allocation of reasonable dues and fees and is not unfairly
discriminatory for the following reasons. The Exchange operates in a
highly competitive market in which market participants can readily
direct order flow to competing venues if they deem fee levels at a
particular venue to be excessive or incentives to be insufficient. More
specifically, the Exchange is only one of 16 options venues to which
market participants may direct their order flow. Based on publicly
available information, no single options exchange has more than 16% of
the market share.\23\ Thus, in such a low-concentrated and highly
competitive market, no single options exchange possess significant
pricing power in the execution of option order flow.
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\23\ See <a href="https://www.cboe.com/us/options/market_share/">https://www.cboe.com/us/options/market_share/</a>.
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The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue use of certain categories of products,
in response to 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.\24\ 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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\24\ See Securities Exchange Act Release No. 85301 (March 13,
2019), 84 FR 10166 (March 19, 2019) (SR-MIAX-2019-09).
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Accordingly, competitive forces constrain the Exchange's
transaction fees, and market participants can readily trade on
competing venues if they deem pricing levels at those other venues to
be more favorable. In response to the competitive environment, the
Exchange offers specific rates and credits in its fees schedule, like
those of other options exchanges' fees schedules, which the Exchange
believes provides incentives to Members to increase order flow of
certain qualifying orders.
The Exchange believes that its proposal to remove the 1,000
contract cap limitation per leg of cPRIME Agency Orders and the
associated waiver of same, and the proposed per contract credit rebate
table will encourage Priority Customer order flow to auctions.
Increased Priority Customer order flow benefits all market participants
because it continues to attract liquidity to the Exchange by providing
more trading opportunities. This attracts Market Makers and other
liquidity providers, thus, facilitating price improvement in the
auction process, signaling additional corresponding increase in order
flow from other market participants, and, as a result, increasing
liquidity on the Exchange.
The Exchange believes that its proposal to adopt a tiered approach
to rebates for cPRIME Agency Orders for Priority Customers is
consistent with Section 6(b)(4) of the Act in that the proposal is
reasonable, equitable and not unfairly discriminatory. As noted above,
the Exchange operates in a highly competitive market. The Exchange is
only one of several options venues to which market participants may
direct their order flow, and it represents a small percentage of the
overall market. The Exchange believes that the proposed fees are
reasonable, equitable, and not unfairly discriminatory in that
competing options exchanges offer similar fees and credits in
connection with similar price improvement auctions.\25\
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\25\ See Cboe Fee Schedule, ``Break-Up Credits,'' available at
<a href="https://cdn.cboe.com/resources/members_hip/Cboe_FeeSchedule.pdf">https://cdn.cboe.com/resources/members_hip/Cboe_FeeSchedule.pdf</a>.
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cPRIME Agency Orders for Priority Customers that have a max leg
size of 1,000 contracts or less will continue to receive the agency
credit described in PCRP Tier 1-4, unless the Member is eligible to
receive the alternative cPRIME Agency Order Credit amount for cPRIME
Agency Orders in Tier 4 of the PCRP, in which case the order will earn
a per contract credit of $0.12.\26\ The Exchange believes that
establishing a 1,000 contract threshold is not new or novel as other
exchanges have different pricing and rates (i.e., caps) for volume over
1,000 contracts.\27\
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\26\ See supra note 18.
\27\ See Cboe Fees Schedule, p.2; see also NYSE American Fee
Schedule, p. 18, footnote 2 under Section I.G.
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The Exchange's proposal to adopt a new table to provide a tiered
credit rate for cPRIME Agency Orders for Priority Customers whose
largest leg size is greater than 1,000 contracts is consistent with
Section 6(b)(4) of the Act \28\ because it applies equally to all
participants of the PCRP. The Exchange believes that the proposed
rebate structure is fair, equitable and not unreasonably
discriminatory. The PCRP is reasonably designed because it will
continue to provide an incentive to providers of Priority Customer
order flow to send that Priority Customer order flow to the Exchange to
receive a credit in a manner that enables the Exchange to improve its
overall competitiveness and strengthen its market quality for all
participants. The
[[Page 40107]]
Exchange conducted an internal analysis of fees and rebates associated
with cPRIME Agency Orders and determined the proposed applicable rates
at each Order Break-up %. For pricing and competitive reasons the
Exchange determined that the agency credit for Order Break-ups from 0%-
40% would be tiered, and that Order Break-ups of greater than 40% would
receive a standard agency credit of $0.10, unless the Member is
eligible to receive the alternative cPRIME Agency Order Credit amount
for cPRIME Agency Orders in Tier 4 of the PCRP, in which case the order
will earn a per contract credit of $0.12.\29\
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\28\ 15 U.S.C. 78f(b)(4).
\29\ See supra note 18.
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In addition, The Exchange believes that its proposal is consistent
with Section 6(b)(5) of the Act \30\ because it perfects the mechanisms
of a free and open market and a national market system and protects
investors and the public interest because an increase in Priority
Customer order flow will bring greater volume and liquidity to the
Exchange, which benefits all market participants by providing more
trading opportunities and tighter spreads. To the extent Priority
Customer order flow is increased by this proposal, market participants
will increasingly compete for the opportunity to trade on the Exchange
including sending more orders and provided narrower and larger-sized
quotations in the effort to trade with such Priority Customer order
flow.
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\30\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that providing rebates for Priority Customers
that submit cPRIME Agency Orders is equitable and not unfairly
discriminatory because the proposed rebate schedule will apply equally
to all cPRIME Agency Orders for Priority Customers. The Exchange
believes that the application of the rebate is equitable and not
unfairly discriminatory because, as stated above, Priority Customer
order flow enhances liquidity on the Exchange, in turn providing more
trading opportunities and attracting other market participants, thus,
facilitating tighter spreads, increased order flow and trading
opportunities to the benefit of all market participants. Moreover, the
options industry has a long history of providing preferential pricing
to Priority Customer orders, and the Exchange's current fees schedule
currently does so in many places, as does the fee structure of at least
one other exchange.\31\
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\31\ See supra note 27.
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B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\32\ the Exchange
does not believe that the proposed rule change will impose any burden
on intra-market or intra-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act. Rather, as
discussed above, the Exchange believes that the proposed change would
encourage the submission of additional liquidity to price improvement
auctions, thereby promoting market depth, price discovery and
transparency and enhancing order execution and price improvement
opportunities for all Members. As a result, the Exchange believes that
the proposed change furthers the Commission's goal in adopting
Regulation NMS of fostering competition among orders, which promotes
``more efficient pricing of individual stocks for all types of orders,
large and small.'' \33\
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\32\ 15 U.S.C. 78f(b)(8).
\33\ See Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
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The Exchange does not believe that its proposal will impose any
burden on intra-market competition that is not necessary or appropriate
in furtherance of the purposes of the Act because the proposed changes
will apply uniformly to all eligible Priority Customer orders. The
proposed change is designed to attract additional order flow to the
Exchange. The Exchange believes that this proposal will continue to
encourage Members to submit cPRIME Agency Orders for Priority
Customers, which will increase liquidity and benefit all market
participants by providing more trading opportunities and tighter
spreads. The Exchange notes the fact that preferential pricing to
Priority Customers is a long-standing options industry practice. The
proposed rebate changes serve to enhance Priority Customer order flow
to the Exchange's Price Improvement Mechanism, which, as a result,
facilitates increased liquidity and execution opportunities to the
benefit of all market participants.
The Exchange also does not believe that its proposal will impose
any burden on inter-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act because, as noted
above, at least one other competing options exchange \34\ currently has
similar rebates in place in connection with similar price improvement
auctions. Additionally, and as previously discussed, the Exchange
operates in a highly competitive market. Members have numerous
alternative venues that they participate on and direct their order flow
to, including 15 other options exchanges, many of which offer
substantially similar price improvement auctions. Based on publicly
available information, no single options exchange has more than 16% of
the market share.\35\ Therefore, no exchange possesses significant
pricing power in the execution of option order flow. Participants can
readily choose to send their orders to other exchanges if they deem fee
levels at those other exchanges to be more favorable. Moreover, the
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. Specifically, 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.'' \36\ The fact that this market is
competitive has also long been recognized by the courts. In
NetCoalition v. Securities and Exchange Commission, the D.C. Circuit
states as follows: ``[n]o one disputes that competition for order flow
is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers' . . .'' \37\ Accordingly, the Exchange
does not believe its proposed fee change imposes any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
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\34\ See supra note 27.
\35\ See supra note 23.
\36\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\37\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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Accordingly, the Exchange believes that the proposed changes will
not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act because it will
continue to encourage order flow, which provides greater volume and
liquidity, benefiting all market participants by providing more
[[Page 40108]]
trading opportunities and tighter spreads.
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,\38\ and Rule 19b-4(f)(2) \39\ 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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\38\ 15 U.S.C. 78s(b)(3)(A)(ii).
\39\ 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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#780a0d141d551b1715151d160c0b380b1d1b561f170e"><span class="__cf_email__" data-cfemail="3d4f485158105e5250505853494e7d4e585e135a524b">[email protected]</span></a>. Please include
File Number SR-MIAX-2021-34 on the subject line.
Paper Comments
<bullet> 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-2021-34. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 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-2021-34, and should be submitted on
or before August 16, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\40\
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\40\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15809 Filed 7-23-21; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on July 26, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.