Notice2021-23437
Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX Options Fee Schedule To Establish a Policy Relating to Billing Errors
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 28, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 206 (Thursday, October 28, 2021)</title>
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[Federal Register Volume 86, Number 206 (Thursday, October 28, 2021)]
[Notices]
[Pages 59833-59835]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-23437]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93404; File No. SR-MIAX-2021-51]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the MIAX Options Fee Schedule To
Establish a Policy Relating to Billing Errors
October 22, 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 October 14, 2021, Miami International Securities Exchange, LLC
(``MIAX Options'' or the ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'') a proposed rule change as
described in Items I and II 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 proposes to establish a policy relating to billing
errors.
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 Options'
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 purpose of the proposed rule change is to amend MIAX's Fee
[[Page 59834]]
Schedule to establish a policy relating to billing errors. More
specifically, the Exchange proposes to amend the footer on the Title
page of its Fee Schedule to adopt language that would provide that all
fees and rebates assessed prior to the three full calendar months
before the month in which the Exchange becomes aware of a billing error
shall be considered final. Particularly, the Exchange will resolve an
error by crediting or debiting Members \3\ and non-Members based on the
fees or rebates that should have been applied in the three full
calendar months preceding the month in which the Exchange became aware
of the error, which includes all impacted transactions that occurred
during those months.\4\ The Exchange will apply the three month look
back regardless of whether the error was discovered by the Exchange or
by a Member or non-Member that submitted a fee dispute to the
Exchange.\5\
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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\ For example, if the Exchange becomes aware of a transaction
fee billing error on October 1, 2021, the Exchange will resolve the
error by crediting or debiting Members and non-Members based on the
fees or rebates that should have been applied to any impacted
transactions during July, August and September 2021. The Exchange
notes that because it bills in arrears, the Exchange would be able
to correct the error in advance of issuing the October 2021 invoice
and therefore, transactions impacted through the date of discovery
(in this example, October 1, 2021) and thereafter, would be billed
correctly.
\5\ The Exchange notes that the current policy which states that
all fee disputes must be submitted no later than sixty (60) days
after receipt of a billing invoice will remain in place.
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The purpose of the proposed change is to encourage Members and non-
Members to promptly review their Exchange invoices so that any disputed
charges can be addressed in a timely manner. The Exchange notes that it
provides Members with both daily and monthly fee reports and thus
believes they should be aware of any potential billing errors within
three months. Further, any fees assessed on non-Members are sent as
monthly invoices, and thus these firms will likewise receive sufficient
notice of any potential billing errors. The requirement that Members
and non-Members submit disputes in writing and provide supporting
documentation in a timely manner while the information and data
underlying those charges (e.g., applicable fees and order information)
is still easily and readily available is not changing under this
proposal.
The proposed rule change to provide all fees and rebates assessed
prior to the three full calendar months before the month in which the
Exchange becomes aware of a billing error shall be considered final
provides both the Exchange and Members and non-Members finality and the
ability to close their books after a known period of time. The proposed
change encourages Members and non-Members to provide a timely review of
their billing invoices.
The Exchange notes that it routinely conducts audits of its Members
and non-Members to ensure that each is complying with the terms and
conditions of the subscriber agreement they have signed. The audit
process is independent of the billing process. The audit function is
administered by the Exchange's Member Services Group and the billing
function is administered by the Exchange's Trading Operations Group.
Each group is charged with distinct responsibilities that do not
overlap. The proposed billing fee finality provision is not intended to
circumvent the audit process in any manner and the adoption of the
three month look back period, beyond which billing errors would be
considered final, would not affect a Member or non-Member's ability to
take a position with respect to billing charges identified through the
audit process.
Further, the Exchange notes that the proposed change is similar to
a policy currently in place at another exchange.\6\
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\6\ See Securities Exchange Act Release No. 91836 (May 11,
2021), 86 FR 26765 (May 17, 2021) (SR-BOX-2021-08).
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2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(5) \8\ requirements that the rules of an exchange be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, 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. Additionally, the Exchange
believes the proposed rule change is consistent with the Section
6(b)(5) \9\ requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
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The Exchange believes that establishing a policy that all fees and
rebates are final after three months (i.e., resolving billing errors
only for the three full calendar months preceding the month in which
the Exchange became aware of the error), is reasonable as both the
Exchange and Members and non-Members have an interest in knowing when
its fee assessments are final and when reliance can be placed upon
those assessments. Indeed, without some deadline on billing errors, the
Exchange and Members and non-Members would never be able to close their
books with any confidence. Furthermore, as noted above, another
exchange similarly considers its fees final after a similar period of
time. The proposed change is also equitable, and not unfairly
discriminatory because it will apply equally to all Members (and non-
Members that pay Exchange fees) and apply in cases where either the
Member (or non-Member) discovers the error or the Exchange discovers
the error.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change would
establish a policy that provides clarity regarding billing errors that
would apply equally to all Members. Additionally, the proposed rule
change is similar to the rules of another exchange.\10\ The Exchange
does not believe such proposed changes would impair the ability of
Members or competing order execution venues to maintain their
competitive standing in the financial markets. Moreover, because the
proposed changes would apply equally to all Members, the proposal does
not impose any burden on competition.
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\10\ Supra note 6.
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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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the
[[Page 59835]]
Commission may designate, it has become effective pursuant to
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) \12\ thereunder.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative for 30 days after the date of its filing.
However, Rule 19b-4(f)(6)(iii) \14\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has asked the
Commission to waive the 30-day operative delay. The Exchange states
that waiver of the operative delay is consistent with the protection of
investors and the public interest because such a waiver would allow
Members and non-Members to immediately benefit from having a clearly
stated policy regarding fee finality for billing disputes and provide
certainty and finality to current and prospective billing errors. In
addition, the Exchange states that the proposed rule change is
comparable to other policies and practices that are already established
at another exchange.
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to modify its Fee Schedule to
immediately adopt a policy relating to billing errors that is designed
to provide clarity and certainty with respect to when Exchange fees and
rebates may be considered final. Further, the proposed rule change is
substantially similar to provisions currently in effect on other
national securities exchanges \15\ and therefore does not raise any new
or novel regulatory issues. Accordingly, the Commission waives the
operative delay and designates the proposed rule change operative upon
filing.\16\
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\15\ See, e.g., supra note 6.
\16\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<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#2b595e474e06484446464e455f586b584e48054c445d"><span class="__cf_email__" data-cfemail="f587809990d8969a9898909b8186b5869096db929a83">[email protected]</span></a>. Please include
File Number SR-MIAX-2021-51 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-2021-51. 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-2021-51 and should be submitted on
or before November 18, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-23437 Filed 10-27-21; 8:45 am]
BILLING CODE 8011-01-P
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