Notice2021-25759
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule
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
November 26, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 86 Issue 225 (Friday, November 26, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 225 (Friday, November 26, 2021)]
[Notices]
[Pages 67509-67511]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-25759]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93633; File No. SR-EMERALD-2021-41]
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule
November 19, 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 November 8, 2021, MIAX Emerald, LLC (``MIAX Emerald'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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 Emerald Fee
Schedule (the ``Fee Schedule'').
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxoptions.com/rule-filings/emerald">https://www.miaxoptions.com/rule-filings/emerald</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 (i) amend the Fee Schedule to amend the
exchange groupings of options exchanges within the routing fee table in
Section 1(b) of the Fee Schedule, Fees for Customer Orders Routed to
another Options Exchange; and (ii) make a minor, non-substantive edit
to correct a typographical error. The Exchange initially filed this
proposal on October 27, 2021 (SR-EMERALD-2021-35) and withdrew such
filing on November 8, 2021. The Exchange proposes to implement the fee
change effective November 8, 2021.
Currently, the Exchange assesses routing fees based upon (i) the
origin type of the order, (ii) whether or not it is an order for
standard option classes in the Penny Interval Program \3\ (``Penny
classes'') or an order for standard option classes which are not in the
Penny Interval Program (``Non-Penny classes'') (or other explicitly
identified classes), and (iii) to which away market it is being routed.
This assessment practice is identical to the routing fees assessment
practice currently utilized by the Exchange's affiliates, Miami
International Securities Exchange, LLC (``MIAX'') and MIAX PEARL, LLC
(``MIAX Pearl''). This is also similar to the methodology utilized by
the Cboe BZX Exchange, Inc. (``Cboe BZX Options''), a competing options
exchange, in assessing routing fees. Cboe BZX Options has exchange
groupings in its fee schedule, similar to those of the Exchange,
whereby several exchanges are grouped into the same category, dependent
upon the order's origin type and whether it is a Penny or Non-Penny
class.\4\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 88993 (June 2,
2020), 85 FR 35145 (June 8, 2020) (SR-EMERALD-2020-05) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Exchange Rule 510, Minimum Price Variations and Minimum
Trading Increments, To Conform the Rule to Section 3.1 of the Plan
for the Purpose of Developing and Implementing Procedures Designed
To Facilitate the Listing and Trading of Standardized Options).
\4\ See Cboe U.S. Options Fee Schedules, BZX Options, effective
August 2, 2021, ``Fee Codes and Associated Fees,'' at <a href="https://www.cboe.com/us/options/membership/fee_schedule/bzx/">https://www.cboe.com/us/options/membership/fee_schedule/bzx/</a>.
---------------------------------------------------------------------------
As a result of conducting a periodic review of the current
transaction fees and rebates charged by away markets, the Exchange has
determined to amend the exchange groupings of options exchanges within
the routing fee table to better reflect the associated costs of routing
customer orders to those options exchanges for execution.\5\ In
particular, the Exchange proposes to amend the exchange groupings in
the first row of the table identified as, ``Routed, Priority Customer,
Penny Program,'' to relocate Nasdaq BX Options from the first row of
the table to the second, also identified as, ``Routed, Priority
Customer, Penny Program.'' The impact of this proposed change will be
that the routing fee for Priority Customer orders in the Penny Program
that are routed to Nasdaq BX Options will increase from $0.15 to $0.65.
The purpose of the proposed rule change is to adjust the routing fee
for certain orders routed to Nasdaq BX Options to reflect the
associated costs for that routed execution.
---------------------------------------------------------------------------
\5\ Nasdaq BX established a Customer Taker fee of $0.46 in Penny
Classes and $0.65 in Non-Penny Classes. See Securities Exchange Act
Release No. 91473 (April 5, 2021), 86 FR 18562 (April 9, 2021) (SR-
BX-2021-009). Nasdaq BX recently increased the Customer Taker fee in
Non-Penny Classes from $0.65 to $0.79. See Securities Exchange Act
Release No. 93121 (September 24, 2021), 86 FR 54259 (September 30,
2021) (SR-BX-2021-040).
---------------------------------------------------------------------------
Next, the Exchange proposes to amend the exchange groupings in the
third row of the table, identified as ``Routed, Priority Customer, Non-
Penny Program,'' to relocate Nasdaq BX Options from the third row of
the table to the fourth, also identified as, ``Routed, Priority
Customer, Non-Penny Program.'' The impact of this proposed change will
be that the routing fee for Priority Customer orders in the Non-Penny
Program that are routed to Nasdaq BX Options will increase from $0.15
to $1.00. The purpose of the proposed rule change is to adjust the
routing fee for certain orders routed to Nasdaq BX Options to reflect
the associated costs for that routed execution.
Next, the Exchange proposes to amend the exchange groupings in the
sixth row of the table identified as, ``Routed, Public Customer that is
not a Priority Customer, Non-Penny Program,'' to relocate Nasdaq ISE
from
[[Page 67510]]
the exchange groupings in the sixth row of the table to the seventh row
of the table, also identified as ``Routed, Public Customer that is not
a Priority Customer, Non-Penny Program.'' The impact of this proposed
change will be that the Exchange routing fee for Public Customer orders
in the Non-Penny Program that are routed to Nasdaq ISE will increase
from $1.00 to $1.15. The purpose of the proposed rule change is to
adjust the routing fee for certain orders routed to Nasdaq ISE to
reflect the associated costs for that routed execution.
Additionally, the Exchange proposes to amend the exchange groupings
in the seventh row of the table, identified as ``Routed, Public
Customer that is not a Priority Customer, Non-Penny Program,'' to
relocate Nasdaq BX Options and MIAX Pearl to the eighth row of the
table, also identified as, ``Routed, Public Customer that is not a
Priority Customer, Non-Penny Program.'' The impact of this proposed
change will be that the routing fee for Public Customer orders that are
not Priority Customer orders in the Non-Penny Program that are routed
to Nasdaq BX Options or MIAX Pearl will increase from $1.15 to $1.25.
The purpose of the proposed rule change is to adjust the routing fee
for certain orders routed to Nasdaq BX Options or MIAX Pearl to reflect
the associated costs for that routed execution. The Exchange notes that
no options exchanges were removed from the routing fee table entirely,
with the only change being the change in categorization.
Accordingly, with the proposed change, the routing fee table will
be as follows:
------------------------------------------------------------------------
Description Fees
------------------------------------------------------------------------
Routed, Priority Customer, Penny Program, to: NYSE $0.15
American, BOX, Cboe, Cboe EDGX Options, MIAX, Nasdaq MRX,
Nasdaq PHLX (except SPY)..................................
Routed, Priority Customer, Penny Program, to: NYSE Arca 0.65
Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, Nasdaq
ISE, NOM, Nasdaq PHLX (SPY only), MIAX Pearl, Nasdaq BX
Options...................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE 0.15
American, BOX, Cboe, Cboe EDGX Options, MIAX, Nasdaq ISE,
Nasdaq MRX, Nasdaq PHLX...................................
Routed, Priority Customer, Non-Penny Program, to: NYSE Arca 1.00
Options, Cboe BZX Options, Cboe C2, MIAX Pearl, Nasdaq
GEMX, NOM, Nasdaq BX Options..............................
Routed, Public Customer that is not a Priority Customer, 0.65
Penny Program, to: NYSE American, NYSE Arca Options, Cboe
BZX Options, BOX, Cboe, Cboe C2, Cboe EDGX Options, Nasdaq
GEMX, Nasdaq ISE, Nasdaq MRX, MIAX, MIAX Pearl, NOM,
Nasdaq PHLX, Nasdaq BX Options............................
Routed, Public Customer that is not a Priority Customer, 1.00
Non-Penny Program, to: MIAX, NYSE American, Cboe, Nasdaq
PHLX, Cboe EDGX Options...................................
Routed, Public Customer that is not a Priority Customer, 1.15
Non-Penny Program, to: Cboe C2, BOX, NOM, Nasdaq ISE......
Routed, Public Customer that is not a Priority Customer, 1.25
Non-Penny Program, to: Cboe BZX Options, NYSE Arca
Options, Nasdaq GEMX, Nasdaq MRX, Nasdaq BX Options, MIAX
Pearl.....................................................
------------------------------------------------------------------------
In determining to amend its routing fees the Exchange took into
account transaction fees and rebates assessed by the away markets to
which the Exchange routes orders, as well as the Exchange's clearing
costs, administrative, regulatory, and technical costs associated with
routing orders to an away market. The Exchange uses unaffiliated
routing brokers to route orders to the away markets; the costs
associated with the use of these services are included in the routing
fees specified in the Fee Schedule. This routing fees structure is not
only similar to the Exchange's affiliates, MIAX and MIAX Pearl, but is
also comparable to the structure in place on at least one other
competing options exchange, such as Cboe BZX Options.\6\ The Exchange's
routing fee structure approximates the Exchange's costs associated with
routing orders to away markets. The per-contract transaction fee amount
associated with each grouping closely approximates the Exchange's all-
in cost (plus an additional, non-material amount) \7\ to execute that
corresponding contract at that corresponding exchange. The Exchange
notes that in determining whether to adjust certain groupings of
options exchanges in the routing fee table, the Exchange considered the
transaction fees and rebates assessed by away markets, and determined
to amend the grouping of exchanges that assess transaction fees for
routed orders within a similar range. This same logic and structure
applies to all of the groupings in the routing fee table. By utilizing
the same structure that is utilized by the Exchange's affiliates, MIAX
and MIAX Pearl, the Exchange's Members \8\ will be assessed routing
fees in a similar manner. The Exchange believes that this structure
will minimize any confusion as to the method of assessing routing fees
between the three exchanges. The Exchange notes that its affiliates,
MIAX and MIAX Pearl, will file to make the same proposed routing fee
changes contained herein.
---------------------------------------------------------------------------
\6\ See supra note 4. The Cboe BZX Options fee schedule has
exchange groupings, whereby several exchanges are grouped into the
same category, dependent on the order's Origin type and whether it
is a Penny or Non-Penny class. For example, Cboe BZX Options fee
code RR covers routed customer orders in Non-Penny classes to NYSE
Arca, Cboe C2, Nasdaq ISE, Nasdaq Gemini, MIAX Emerald, MIAX Pearl,
or NOM, with a single fee of $1.25 per contract.
\7\ This amount is to cover de minimis differences/changes to
away market fees (i.e., minor increases or decreases) that would not
necessitate a fee filing by the Exchange to re-categorize the away
exchange into a different grouping. Routing fees are not intended to
be a profit center for the Exchange and the Exchange's target
regarding routing fees and expenses is to be as close as possible to
net neutral.
\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
the Definitions section of the Fee Schedule and Exchange Rule 100.
---------------------------------------------------------------------------
Finally, the Exchange proposes to make a minor non-substantive
change to the title of the table in section 1(b) of the Fee Schedule,
to capitalize the ``a'' in the word ``another'' such that the title of
the table will be ``Fees for Customer Orders Routed to Another Options
Exchange.'' This proposed change harmonizes the title of the table to
that of the Exchange's affiliate, MIAX Pearl.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \9\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \10\ in particular, in
that it is an equitable allocation of reasonable dues, 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 \11\ in that it is
[[Page 67511]]
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.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes the proposed change to the exchange groupings
of options exchanges within the routing fee table furthers the
objectives of Section 6(b)(4) of the Act and is reasonable, equitable
and not unfairly discriminatory because the proposed change will
continue to apply in the same manner to all Members that are subject to
routing fees. The Exchange believes the proposed change to the routing
fee table exchange groupings furthers the objectives of Section 6(b)(5)
of the Act and is designed to promote just and equitable principles of
trade and is not unfairly discriminatory because the proposed change
seeks to recoup costs that are incurred by the Exchange when routing
customer orders to away markets on behalf of Members and does so in the
same manner to all Members that are subject to routing fees. The costs
to the Exchange to route orders to away markets for execution primarily
includes transaction fees and rebates assessed by the away markets to
which the Exchange routes orders, in addition to the Exchange's
clearing costs, administrative, regulatory and technical costs. The
Exchange believes that the proposed re-categorization of certain
exchange groupings would enable the Exchange to recover the costs it
incurs to route orders to Nasdaq BX Options, Nasdaq ISE, and MIAX
Pearl. The per-contract transaction fee amount associated with each
grouping approximates the Exchange's all-in cost (plus an additional,
non-material amount) to execute the corresponding contract at the
corresponding exchange.
The Exchange believes the proposed change to correct a
typographical error in the title of the table in section 1(b) of the
Fee Schedule, promotes just and equitable principles of trade and
removes impediments to and perfects the mechanism of a free and open
market and a national market system because the proposed change
promotes clarity and consistency within the Fee Schedules of MIAX
Emerald and its affiliate Exchange, MIAX Pearl. The Exchange believes
this change will provide greater clarity to Members and the public
regarding the Exchange's Fee Schedule and it is in the public interest
for the Fee Schedule to be accurate and consistent so as to eliminate
the potential for confusion.
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 Exchange believes its
proposed re-categorization of certain exchange groupings is intended to
enable the Exchange to recover the costs it incurs to route orders to
away markets, particularly Nasdaq BX Options and Nasdaq ISE. The
Exchange does not believe that this proposal imposes any unnecessary
burden on competition because it seeks to recoup costs incurred by the
Exchange when routing orders to away markets on behalf of Members and
at least one other options exchange has a similar routing fees
structure.\12\
---------------------------------------------------------------------------
\12\ See supra note 4.
---------------------------------------------------------------------------
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 is effective upon filing pursuant to
Section 19(b)(3)(A) \13\ of the Act and subparagraph (f)(2) of Rule
19b-4 \14\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such 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 under
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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#0b797e676e26686466666e657f784b786e68256c647d"><span class="__cf_email__" data-cfemail="0f7d7a636a226c6062626a617b7c4f7c6a6c21686079">[email protected]</span></a>. Please include
File Number SR-EMERALD-2021-41 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-EMERALD-2021-41. 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-EMERALD-2021-41 and should be submitted
on or before December 17, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25759 Filed 11-24-21; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on November 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.