Notice2021-20446
Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule With Respect to Open-Close Report Data
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Published
September 22, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 181 (Wednesday, September 22, 2021)</title>
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[Federal Register Volume 86, Number 181 (Wednesday, September 22, 2021)]
[Notices]
[Pages 52709-52712]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-20446]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93021; File No. SR-MIAX-2021-39]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule With Respect to Open-
Close Report Data
September 16, 2021.
Pursuant to 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 September 2, 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'') to provide historical Open-Close Report
data for free by amending the fees for the Open-Close Report to: (i)
Respond to ad hoc requests for end-of-day data free of charge; and (ii)
provide mid-month subscribers data for the entire month in which they
subscribe.
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 recently adopted a new data product for options known
as the Open-Close Report,\3\ which the Exchange made available for
purchase to Exchange Members \4\ and non-Members on June 1, 2021.\5\
The Open-Close Report is described under Exchange Rule 531(b)(1). The
Exchange now proposes to provide historical Open-Close Report data for
free by amending the fees for the Open-Close Report to: (i) Respond to
ad hoc requests for end-of-day data free of charge; and (ii) provide
mid-month subscribers data for the entire month in which they
subscribe.
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\3\ See Securities Exchange Act Release No. 91965 (May 21,
2021), 86 FR 28665 (May 27, 2021) (SR-MIAX-2021-18) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to
Adopt a New Historical Market Data Product To Be Known as the Open-
Close Report).
\4\ The term ``Member'' means an individual or organization that
is registered with the Exchange pursuant to Chapter II of these
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See Exchange Rule 100.
\5\ See Securities Exchange Act Release No. 92135 (June 9,
2021), 86 FR 31751 (June 15, 2021) (SR-MIAX-2021-23) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the MIAX Pearl [sic] Options Fee Schedule To Adopt Fees for
the Open-Close Report).
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General
By way of background, the Exchange offers two versions of the Open-
Close Report, an end-of-day summary and intra-day report.\6\ The end-
of-day version is a volume summary of trading activity on the Exchange
at the option level by origin (Priority Customer, Non-Priority
Customer, Firm, Broker-Dealer, and Market Maker),\7\ side of the market
(buy or sell), contract volume, and transaction type (opening or
closing). The customer and professional customer volume is further
broken down into trade size buckets (less than 100 contracts, 100-199
contracts, greater than 199 contracts). The Open-Close Data is
proprietary Exchange trade data and does not include trade data from
any other exchange. It is also a historical data product and not a
real-time data feed.
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\6\ The intraday Open-Close Report provides similar information
to that of Open-Close Data but will be produced and updated every 10
minutes during the trading day. Data is captured in ``snapshots''
taken every 10 minutes throughout the trading day and is available
to subscribers within five minutes of the conclusion of each 10-
minute period.
\7\ See Exchange Rule 100.
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Members and non-Members may purchase the Open-Close Report on a
monthly basis. The Exchange currently assess a monthly fee of $600 per
month for subscribing to the end-of-day summary Open-Close Report and
$2,000 per month for subscribing to the intra-day Open-Close Report.
For mid-month subscriptions, new subscribers are currently charged for
the full calendar month for which they subscribe and will be provided
Open-Close Report data for each trading day of the calendar month from
the day on which they subscribed.
End-of-Day Ad Hoc Request (Historical Data)
The Exchange now proposes to provide Members and Non-Members who
request on an ad hoc basis historical end-of-day Open-Close Report data
free of charge.\8\ An ad hoc request may be for any number of months
beginning with June 2021, the month in which the Exchange first made
the Open-Close Report available. For
[[Page 52710]]
example, as of the date of this filing, a market participant may
request end-of-day Open-Close Report data for the month of June 2021 or
July 2021, or may request such data for both June and July 2021 and
would not be charged a fee for such request(s). The Exchange notes that
other exchanges that provide similar data products allow for ad hoc
requests of their end-of-day data for a fee \9\ and, like the Exchange
proposes herein, allow for ad hoc requests back to a certain month.\10\
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\8\ The Exchange does not propose to allow for ad hoc requests
for intra-day Open-Close Report data.
\9\ See Price List--U.S. Derivatives Data for Nasdaq PHLX, LLC
(``PHLX''), The Nasdaq Stock Market, LLC (``Nasdaq''), Nasdaq ISE,
LLC (``ISE''), and Nasdaq GEMX, LLC (``GEMX''), available at <a href="http://www.nasdaqtrader.com/Trader.aspx?id=DPPriceListOptions#web">http://www.nasdaqtrader.com/Trader.aspx?id=DPPriceListOptions#web</a>.
Particularly, PHLX offers ``Nasdaq PHLX Options Trade Outline
(PHOTO)'' and assesses $400 for historical end-of-day data; Nasdaq
offers the ``Nasdaq Options Trade Outline (NOTO)'' and assesses $250
for historical end-of-day data; ISE offers the ``Nasdaq ISE Open/
Close Trade Profile'' and assesses $600 per month for historical
end-of-day data and $27,500 for complete history; and GEMX offers
the ``Nasdaq GEMX Open/Close Trade Profile'' and assesses $400 for
historical end-of-day data.
Cboe EDGX Exchange, Inc. (``EDGX'') and Cboe BZX Exchange, Inc.
(``BZX'') both assess $400 for historical end-of-day data per
request per month. See the EDGX fee schedule available at <a href="http://markets.cboe.com/us/options/membership/fee_schedule/edgx/">http://markets.cboe.com/us/options/membership/fee_schedule/edgx/</a> and the
BZX fee schedule available at <a href="http://markets.cboe.com/us/options/membership/fee_schedule/bzx/">http://markets.cboe.com/us/options/membership/fee_schedule/bzx/</a>. Both EDGX and BZX allow for ad-hoc
requests to be for any number of months beginning with January 2018
for which the data is available.
\10\ Both EDGX and BZX allow for ad-hoc requests to be for any
number of months beginning with January 2018 for which the data is
available. See the EDGX fee schedule available at <a href="http://markets.cboe.com/us/options/membership/fee_schedule/edgx/">http://markets.cboe.com/us/options/membership/fee_schedule/edgx/</a> and the
BZX fee schedule available at <a href="http://markets.cboe.com/us/options/membership/fee_schedule/bzx/">http://markets.cboe.com/us/options/membership/fee_schedule/bzx/</a>.
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The Exchange also proposes to make the historical monthly data
available fifteen (15) days after the end of the month for which it is
requested. The Exchange proposes this delay because it is making
historical end-of-day Open-Close Report data free of charge and seeks
to not encourage subscribers to request historical end-of-day Open-
Close Report data over a paid subscription.
Mid-Month Subscriptions
The Exchange also proposes to amend the data range of Open-Close
Report data it provides to mid-month subscribers. As noted above, the
Exchange currently charges new mid-month subscribers for the full
calendar month for which they subscribe, but only provides Open-Close
Report data for each trading day of the calendar month from the day on
which they subscribed. The Exchange now proposes to provide new mid-
month subscribers data for each trading day of the calendar month prior
to the day on which they subscribe. In other words, those that
subscribe mid-month will be provided Open-Close Data retroactively for
each trading day of the month in which they subscribed and
prospectively for each trading day for the remainder of that calendar
month pursuant to either the end-of-day or intra-day subscription they
chose. This is identical to how the Exchange provides data to mid-month
subscribers of the Exchange's Liquidity Taker Event report.\11\
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\11\ See the Exchange's fee schedule available at <a href="https://www.miaxoptions.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Options_Fee_Schedule_08122021.pdf">https://www.miaxoptions.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Options_Fee_Schedule_08122021.pdf</a> [sic] (providing that
``[n]ew subscribers will be charged for the full calendar month for
which they subscribe and will be provided Liquidity Taker Event
Report data for each trading day of the calendar month prior to the
day on which they subscribed.'').
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Implementation Date
The Exchange intends to provide historical Open-Close Report data
for free pursuant this proposal immediately.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\13\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
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 to protect investors and the public
interest, and that it is not designed to permit unfair discrimination
among customers, brokers, or dealers. The Exchange also believes that
its proposed changes to its Fee Schedule concerning fees for the Open-
Close Report is consistent with Section 6(b) of the Act \14\ in
general, and furthers the objectives of Section 6(b)(4) of the Act \15\
in particular, in that it is an equitable allocation of dues, fees and
other charges among its members and other recipients of Exchange data.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4).
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. Particularly, the Open-Close Report further
broadens the availability of U.S. option market data to investors
consistent with the principles of Regulation NMS. The data product also
promotes increased transparency through the dissemination of the Open-
Close Report. Particularly, information regarding opening and closing
activity across different option series during the trading day may
indicate investor sentiment, which may allow market participants to
make better informed trading decisions throughout the day. Subscribers
to the data may also be able to enhance their ability to analyze option
trade and volume data and create and test trading models and analytical
strategies. The Exchange believes the Open-Close Report provides a
valuable tool that subscribers can use to gain comprehensive insight
into the trading activity in a particular series, but also emphasizes
such data is not necessary for trading. Moreover, other exchanges offer
a similar data product.\16\ This proposal simply and solely seeks to
provide historical Open-Close Report data to market participants for
free by amending the fees for the Open-Close Report to: (i) Respond to
ad hoc requests for end-of-day data free of charge; and (ii) provide
mid-month subscribers data for the entire month in which they
subscribe.
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\16\ See supra notes 9 and 10.
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The Exchange operates in a highly competitive environment. Indeed,
there are currently 16 registered options exchanges that trade options.
Based on publicly available information, no single options exchange has
more than 15% of the market share and currently the Exchange represents
only approximately 6.23% of the market share.\17\ The Commission has
repeatedly expressed its preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. Particularly, 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.'' \18\ Making similar data products available to
market participants fosters competition in the marketplace, and
constrains the ability of exchanges to charge supra-competitive fees.
In the
[[Page 52711]]
event that a market participant views one exchange's data product as
more or less attractive than the competition they can and do switch
between similar products. The proposed fees are a result of the
competitive environment, as the Exchange seeks to adopt fees to attract
purchasers of the recently introduced Open-Close Data product.
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\17\ See the Exchange's ``The market at a glance'', available at
<a href="https://www.miaxoptions.com/">https://www.miaxoptions.com/</a> (last visited September 1, 2021).
\18\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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The Exchange believes its proposal to provide Open-Close data in
response to ad hoc request for end-of-day data free of charge is
reasonable as the proposed rate is lower than the fees assessed by
other exchanges that provide data in response to ad hoc request for
their similar data products.\19\ In fact, the Exchange understands that
no other exchange provides such data free of charge.\20\ Indeed,
proposing fees that are excessively higher than established fees for
similar data products would simply serve to reduce demand for the
Exchange's data product, which as noted, is entirely optional. Like the
Exchange's Open-Close Report, other exchanges offer similar data
products that each provide insight into trading on those markets and
may likewise aid in assessing investor sentiment. Although each of
these similar Open-Close data products provide only proprietary trade
data and not trade data from other exchanges, it is possible investors
are still able to gauge overall investor sentiment across different
option series based on open and closing interest on any one
exchange.\21\ Similarly, market participants may be able to analyze
option trade and volume data, and create and test trading models and
analytical strategies using only Open-Close data relating to trading
activity on one or more of the other markets that provide similar data
products. As such, if a market participant views another exchange's
Open-Close data as more attractive than its proposed Open-Close Report,
then such market participant can merely choose not to subscribe to the
Exchange's Open-Close Report and instead purchase another exchange's
Open-Close data product, which offer similar data points, albeit based
on that other market's trading activity.
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\19\ See supra notes 9 and 10.
\20\ See supra note 9.
\21\ The exchange notes that its Open-Close Report data product
does not include data on any exclusive, singly-listed option series.
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The Exchange also believes its proposal to amend the fees for the
Open-Close Report to: (i) Provide historical end-of-day data free of
charge and (ii) provide mid-month subscribers data for the entire month
in which they subscribe, is reasonable as it would further support its
recent introduction of the Open-Close Report, which is designed to aid
investors by providing insight into trading on the Exchange. Providing
market data, such as the Open-Close Report, is also a means by which
exchanges compete to attract business. Subscribers that receive end-of-
day Open-Close data for free in response to an ad hoc request may use
such data to evaluate the usefulness of the Exchange's Open-Close
Report and decide, based on that data, whether to subscribe to the
Open-Close Report on a monthly basis. In addition, providing new mid-
month subscribers data for the entire calendar month would further
enhance the value of the Open-Close Report and encourage mid-month
subscriptions market participants that seek to subscribe to the Open-
Close Report not having to wait to the first of the next month to
subscribe and receive a full month of Open-Close Report Data for the
current monthly fee. To the extent that the Exchange is successful in
attracting subscribers for the Open-Close Report through this proposal,
it may earn trading revenues and further enhance the value of its data
products. The Exchange also believes it proposal to make historical
end-of-day Open-Close Report data on a delayed basis is a reasonable
means to not encourage subscribers to request historical end-of-day
Open-Close Report data over a paid subscription. If the market deems
the proposal to be unfair or inequitable, firms can diminish or
discontinue their use of the data and/or avail themselves of similar
products offered by other exchanges.\22\ The Exchange therefore
believes that its proposal reflects the competitive environment and
would be properly assessed on Member or non-Member users. The Exchange
also believes the proposal is equitable and not unfairly discriminatory
as it would apply equally to all users who choose to purchase or
receive such data.
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\22\ See supra notes 9 and 10.
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As noted above, a wide variety of market participants to subscribe
to the Open-Close Report, including but not limited to individual
customers, buy-side investors and investment banks. The Exchange
reiterates that the decision as to whether or not to subscribe to the
Open-Close Report is entirely optional for all potential subscribers.
Indeed, no market participant is required to subscribe to the Open-
Close Report, and the Exchange is not required to make the Open-Close
Report available to all investors. Rather, the Exchange is voluntarily
making additional Open-Close Report data available via ad hoc requests
for end-of-day data and to mid-month subscribers under this proposal at
the request of customers, and market participants may choose to receive
this data based on their own business needs. Potential subscribe to or
request the data at any time if they believe it to be valuable or may
decline to subscribe such data.
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. Rather, the
Exchange believes that the proposal will promote competition by
permitting the Exchange to enhance the value of a data product that is
similar to those offered by other competitor options exchanges.\23\ The
Exchange made Open-Close Data available in order to keep pace with
changes in the industry and evolving customer needs, and believes the
data product will continue to contribute to robust competition among
national securities exchanges. At least eight other U.S. options
exchanges offer a market data product that is substantially similar to
the Open-Close Report. As a result, the Exchange believes this proposed
rule change permits fair competition among national securities
exchanges.
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\23\ See supra note 9.
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Furthermore, the Exchange operates in a highly competitive
environment, and its ability to price the Open-Close Report is
constrained by competition among exchanges that offer similar data
products to their customers. As discussed, there are currently a number
of similar products available to market participants and investors. At
least eight other U.S. options exchanges offer a market data product
that is substantially similar to the Open-Close Report, which the
Exchange must consider in its pricing discipline in order to compete
for the market data.\24\ For example, proposing fees that are
excessively higher than established fees for similar data products
would simply serve to reduce demand for the Exchange's data product,
which as discussed, market participants are under no obligation to
utilize. In this competitive environment, potential purchasers are free
to choose which, if any, similar product to purchase to satisfy their
need for market information. As a result, the Exchange believes this
proposed rule change
[[Page 52712]]
permits fair competition among national securities exchanges.
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\24\ See, e.g., Cboe Options Fees Schedule, Livevol Fees, Open-
Close Data. See also Nasdaq ISE Options 7 Pricing Schedule, Section
10.A and Nasdaq PHLX Options 7 Pricing Schedule, Section 10, PHLX
Options Trade Outline (``PHOTO'').
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The Exchange also does not believe the proposal would cause any
unnecessary or in appropriate burden on intermarket competition as
other exchanges are free to introduce their own comparable data product
and lower their prices to better compete with the Exchange's offering.
The Exchange does not believe the proposed rule change would cause any
unnecessary or inappropriate burden on intramarket competition.
Particularly, the proposal would apply uniformly to any market
participant, in that it does not differentiate between subscribers to
the Open-Close Report. The proposal is modest and would allow any
interested Member or non-Member to subscribe to or request such data
based on their business needs.
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,\25\ and Rule 19b-4(f)(2) \26\ 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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\25\ 15 U.S.C. 78s(b)(3)(A)(ii).
\26\ 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#2351564f460e404c4e4e464d5750635046400d444c55"><span class="__cf_email__" data-cfemail="0b797e676e26686466666e657f784b786e68256c647d">[email protected]</span></a>. Please include
File Number SR-MIAX-2021-39 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-2021-39. 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-2021-39 and should be submitted on
or before October 13, 2021.
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\27\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20446 Filed 9-21-21; 8:45 am]
BILLING CODE 8011-01-P
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