Notice2025-18366
Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX Sapphire Fee Schedule To Establish Non-Transaction Fees Applicable to Floor Participants of the Exchange's Trading Floor
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
September 23, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 182 (Tuesday, September 23, 2025)</title>
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[Federal Register Volume 90, Number 182 (Tuesday, September 23, 2025)]
[Notices]
[Pages 45840-45850]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18366]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104002; File No. SR-SAPPHIRE-2025-37]
Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the MIAX Sapphire Fee Schedule To Establish Non-Transaction Fees
Applicable to Floor Participants of the Exchange's Trading Floor
September 18, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on September 11, 2025, MIAX Sapphire, LLC (``MIAX
Sapphire'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the 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 proposes to amend the MIAX Sapphire Options Exchange
Fee Schedule (``Fee Schedule'') to amend the MIAX Sapphire Options
Exchange Fee Schedule (the ``Fee Schedule'') to establish the following
non-transaction fees applicable to Floor Participants \3\ of the
Exchange's Trading Floor: \4\ (1) one-time application and initiation
fee; (2) participant fees; (3) Trading Permit \5\ fees; (4) desk and
badge fees; (5) remote services fees; (6) shipping and storage fee; and
(7) data center hosting fees.
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\3\ The term ``Floor Participant'' means Floor Brokers as
defined in Rule 2015 and Floor Market Makers as defined in Rule
2105(b). See Exchange Rule 100.
\4\ The term ``Trading Floor'' or ``Floor'' means the physical
trading floor of the Exchange located in Miami, Florida. The Trading
Floor shall consist of one ``Crowd Area'' or ``Pit'' where Floor
Participants will be located and option contracts will be traded.
The Crowd Area or Pit shall be marked with specific visible
boundaries on the Trading Floor, as determined by the Exchange. A
Floor Broker must represent all orders in an ``open outcry'' fashion
in the Crowd Area. See Exchange Rule 100.
\5\ The term ``Trading Permit'' means a permit issued by the
Exchange that confers the ability to transact on the Exchange. See
Exchange Rule 100.
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While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on September 12, 2025, when the Trading Floor is set to begin
operations.\6\
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\6\ See MIAX Sapphire Options Exchange--Trading Floor--Remaining
Test Date and Updated Launch Date--Sapphire Alert--Rescheduled
Launch Date and Updated Resources for the MIAX Sapphire Trading
Floor (dated July 3, 2025), available at <a href="https://www.miaxglobal.com/alert/2025/07/03/miax-sapphire-options-exchange-trading-floor-remaining-test-date-and">https://www.miaxglobal.com/alert/2025/07/03/miax-sapphire-options-exchange-trading-floor-remaining-test-date-and</a>.
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The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings">https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings</a>, and at MIAX Sapphire's principal office.
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
As previously announced, the Exchange anticipates that it will
commence Trading Floor operations on September 12, 2025.\7\ In
anticipation of the launch of the Trading Floor for equity options
trading, the Exchange proposes to amend the Fee Schedule to establish
new Section 9, Trading Floor Non-Transaction Fees, and the following
subsections, including proposed fee structures and amounts: (1) one-
time application and initiation fee; (2) participant fees; (3) Trading
Permit fees; (4) desk and badge fees; (5) remote services fees; (6)
shipping and storage fee; and (7) data center hosting fees.\8\
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\7\ Id.
\8\ The Exchange will (or already has) filed a separate rule
filing pursuant to Section 19(b)(3)(A) of the Exchange Act (15
U.S.C. 78s(b)(3)(A)) and Rule 19b-4(f)(2) (17 CFR 240.19b-4(f)(2))
thereunder to establish certain definitions applicable to
transactions on the Trading Floor, as well as fees and rebates that
will apply to orders entered by Floor Participants on the Trading
Floor. The Exchange cites to certain capitalized terms in that
filing. See SR-SAPPHIRE-2025-36 (not yet noticed by the Commission
at the time of this filing).
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Application and Initiation Fee (One-Time)
The Exchange proposes to amend the Fee Schedule to establish new
Section 9)a), Application and Initiation Fee (One-Time). In particular,
the Exchange proposes to assess a one-time fee of $2,000 for each Floor
Broker \9\ application and initiation and a one-time fee of $2,000 for
each Floor Market Maker \10\ application and initiation. The Exchange
proposes to provide that it will assess the one-time application and
initiation fee on the earlier of (i) the date the applicant is
certified in the membership system, (ii) provided access to the Trading
Floor and/or Trading Floor data center, or (iii) once an application
for Trading Floor membership is finally denied.
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\9\ A Floor Broker is an individual who is registered with the
Exchange for the purpose, while on the Trading Floor, of accepting
and handling options orders. A Floor Broker must be registered as a
Floor Participant prior to registering as a Floor Broker. A Floor
Broker may take into his own account, and subsequently liquidate,
any position that results from an error made while attempting to
execute, as Floor Broker, an order. See Exchange Rule 2015.
\10\ A Floor Market Maker is a Floor Participant of the Exchange
located on the Trading Floor who has received permission from the
Exchange to trade in options for his own account. See Exchange Rule
2105(b).
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The Exchange proposes to provide in the Fee Schedule that the one-
time Application and Initiation Fee will be waived for the Initial
Waiver Period.\11\ The purpose of waiving this fee is to provide an
incentive for market participants interested in becoming Floor
Participants to submit early applications and become Floor Participants
in time for the launch of the Trading Floor, which may result in
increased potential order flow and liquidity as MIAX Sapphire begins
Trading Floor operations. Waiving certain fees is how exchanges have
historically attracted membership and
[[Page 45841]]
competed for order flow soon after launching operations.\12\ Even
though the Exchange proposes to waive these particular fees during the
Initial Waiver Period, the Exchange believes that it is appropriate to
provide market participants with the overall structure of the fees by
outlining the structure and amounts in the Fee Schedule so that there
is general awareness that the Exchange intends to assess such fees upon
expiration of the defined term of the Initial Waiver Period. MIAX
Sapphire's proposed one-time application and initiation fees are lower
than the initiation fees for floor participants that are assessed by at
least one other equity options exchange that offers a trading
floor.\13\
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\11\ The term ``Initial Waiver Period'' means, for each
applicable fee, the period of time from the initial effectiveness of
the fee for the remainder of the partial month once the Trading
Floor begins to operate, plus an additional five (5) full calendar
months after the completion of the partial month, if applicable, of
the launch of Trading Floor operations. See the Definitions section
of the Fee Schedule.
\12\ See, e.g., Securities Exchange Act Release Nos. 100752
(August 16, 2024), 89 FR 67986 (August 22, 2024) (SR-SAPPHIRE-2024-
20) (waiving one-time membership application fees, among others, for
the Exchange's electronic equity options trading platform for an
initial waiver period in order to attract membership and order flow
upon launching operations); 85393 (March 21, 2019), 84 FR 11599
(March 27, 2019) (SR-EMERALD-2019-15) (waiving one-time membership
application fees, trading permit fees, and testing and certification
fees, among others, for an initial waiver period in order to attract
membership and order flow upon launching operations); and 97893
(July 13, 2023), 88 FR 46285 (July 19, 2023) (SR-MEMX-2023-13)
(waiving membership fees for an initial waiver period of
approximately six months upon launch of MEMX's options exchange).
\13\ See BOX Exchange LLC (``BOX'') Fee Schedule, Section I.A.,
Initiation Fee (assessing a one-time initiation fee of $2,500 for
all participant initiations for electronic and floor trading).
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Participant Fees
The Exchange proposes to amend the Fee Schedule to establish new
Section 9)b), Participant Fees. In particular, the Exchange proposes to
assess a monthly participant fee of $1,250 per firm for Floor Brokers
and a monthly participant fee of $1,250 per firm for Floor Market
Makers. The Exchange proposes to provide in the Fee Schedule that it
will assess the monthly participant fees to Floor Participants that
maintain a physical presence on the Trading Floor. As proposed,
participant fees do not entitle participants to transact orders on the
Trading Floor.
The Exchange proposes to provide in the Fee Schedule that the
monthly participant fees will be waived for the Initial Waiver Period.
The purpose of waiving this fee is to provide an incentive for market
participants to become Floor Participants. Waiving certain fees is how
exchanges have historically attracted membership and competed for order
flow soon after launching operations.\14\ Even though the Exchange
proposes to waive these particular fees during the Initial Waiver
Period, the Exchange believes that it is appropriate to provide market
participants with the overall structure of the fees by outlining the
structure and amounts in the Fee Schedule so that there is general
awareness that the Exchange intends to assess such fees upon expiration
of the defined term of the Initial Waiver Period. MIAX Sapphire's
proposed participant fees are lower than the participant fees assessed
by at least one other equity options exchange that offers a trading
floor.\15\
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\14\ See supra note 12.
\15\ See BOX Fee Schedule, Section I.B., Participant Fee
(assessing a participant fee of $1,500 per month). BOX does not
assess the participant fee to electronic market makers of BOX. Id.
Like BOX, market participants that only utilize the Exchange's
electronic trading platform will not be assessed the proposed
participant fee.
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Trading Permit Fees
The Exchange proposes to amend the Fee Schedule to establish new
Section 9)c), Trading Permit Fees. In particular, the Exchange proposes
to assess a monthly Trading Permit fee of $5,000 per firm for Floor
Brokers and a monthly Trading Permit fee of $5,350 for each Floor
Market Maker. A Trading Permit confers the right to trade on the
Trading Floor. In addition to Floor Brokers and Floor Participants,
other individuals may also work on the Trading Floor as employees or
associates of Floor Brokers and Floor Market Makers. For example,
Clerks \16\ must be registered with the Exchange but are not required
to purchase a Trading Permit to work for a Floor Broker or Floor Market
Maker on the Trading Floor.
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\16\ The term ``Clerk'' means any registered on-Floor person
employed by or associated with a Floor Broker or Floor Market Maker
and who is not eligible to effect transactions on the Trading Floor
as a Floor Market Maker or Floor Broker. See Exchange Rule 2055(a).
While on the Trading Floor, Clerks shall display prominently at all
times the badge(s) supplied to them by the Exchange. See Exchange
Rule 2055(b).
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The Exchange proposes to provide in the Fee Schedule that the
monthly Trading Permit fee for Floor Brokers will be charged on a per
firm basis and entitles the firm to receive an unlimited number of
Trading Permits for its Floor Brokers. Each Floor Broker will receive
one Trading Permit, badge, and desk. The monthly Trading Permit fee for
Floor Brokers will be charged on a per firm basis. For example, if
``Firm A'' has three registered Floor Brokers on the Trading Floor,
each of those Floor Brokers will receive a Trading Permit, desk and
badge and ``Firm A'' will be charged $5,000 for the month in Trading
Permit fees. If, in addition to the three Floor Brokers in the above
example, ``Firm A'' also employs three Clerks (one for each Floor
Broker) who are validly registered with the Exchange and overseen by
``Firm A,'' \17\ then ``Firm A'' will be charged $5,000 in Trading
Permit fees for its Floor Brokers, plus $1,350 in desk and badge fees
for the three Clerks on the Trading Floor (($350 + $100)) multiplied by
three) for a total of $6,350 for these described fees. ``Firm A'' will
not be assessed Trading Permit fees for the Clerks. The desk and badge
fees are described in further detail below.
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\17\ See Exchange Rule 2055(d).
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The Exchange proposes that the monthly Trading Permit fee entitles
each Floor Market Maker to receive one Trading Permit, badge and desk.
The monthly Trading Permit fee for Floor Market Makers will be charged
on a per Floor Market Maker basis. For example, if ``Firm B'' has three
registered Floor Market Makers on the Trading Floor, each of those
Floor Market Makers will be charged the Trading Permit fee and receive
a desk and badge, and ``Firm B'' will be charged $16,050 for the month
($5,350 multiplied by three). In this example, the three ``Firm B''
Floor Market Makers receive a desk and badge as part of their monthly
Trading Permit fee. If, in addition to the three Floor Market Makers in
the above example, ``Firm B'' also employs three Clerks on the Trading
Floor (one for each Floor Market Maker) who are validly registered with
the Exchange, then ``Firm B'' will be charged $16,050 in Trading Permit
fees for its Floor Market Makers, plus $1,350 in desk and badge fees
for the three Clerks on the Trading Floor (($350 + $100)) multiplied by
three), for a total of $17,400 for these described fees. ``Firm B''
will not be assessed Trading Permit fees for the Clerks. The Exchange
describes desk and badge fees in further detail below.
The Exchange determined to charge Floor Brokers on a per firm basis
but not Floor Market Makers because the Trading Floor is not an
unlimited space. Each on-Floor person is required to have a desk, which
physically takes up space. The Exchange determined to charge Floor
Brokers on a per firm basis and allocate more space for Floor Brokers
to encourage Floor Brokers to bring Qualified Floor Order (``QFOs'')
\18\ and Complex Qualified Floor Order (``cQFOs'') \19\ volume to the
Trading Floor. The Exchange believes this will encourage the role
performed by Floor Brokers in facilitating the execution of orders on
the Trading Floor, a function that the Exchange wishes to support for
the benefit of all market participants. The Exchange believes this fee
structure
[[Page 45842]]
will incentivize Floor Broker liquidity while balancing and recognizing
the importance of Floor Market Makers to make markets on the Exchange's
Trading Floor and interact with the orders brought to the Trading Floor
for execution by Floor Brokers. More liquidity should benefit all Floor
Participants by providing more trading opportunities, offering a more
competitive venue for order execution, thus improving market quality
for all market participants.
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\18\ See Exchange Rule 2040.
\19\ See id.
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The Exchange proposes to provide in the Fee Schedule that the
monthly Trading Permit fees will be waived if the Floor Broker (per
firm) or Floor Market Maker executes at least 100 contracts average
daily volume (``ADV'') in QFOs or cQFOs, as the case may be, in each
relevant month throughout September, October, November and December
2025, as well as January and February 2026. The purpose of this
conditional fee waiver is to provide a low enough volume threshold that
most, if not all, Floor Participants should be able to achieve in order
to have their Trading Permit fees waived, while also promoting order
flow and liquidity as the Trading Floor begins to operate.
Waiving certain fees is how exchanges have historically attracted
membership and competed for order flow soon after launching
operations.\20\ The Exchange also believes that incentivizing order
flow to reduce certain membership fees, like trading permit fees, is
historically how other exchanges have competed.\21\ Even though the
Exchange proposes to waive these particular fees if a Floor Broker or
Floor Market Maker achieves a certain ADV in the relevant month, the
Exchange believes that it is appropriate to provide market participants
with the overall structure of the fees by outlining the structure and
amounts in the Fee Schedule so that there is general awareness that the
Exchange intends to assess such fees if the threshold is not met, as
well as in the future. MIAX Sapphire's proposed Trading Permit fees for
Floor Brokers are lower than the trading permit fees assessed to floor
brokers of at least one other equity options exchange that offers a
trading floor,\22\ and are equal to the trading permit fees assessed to
floor brokers of at least one other equity options exchange that offers
a trading floor.\23\ MIAX Sapphire's proposed Trading Permit fees for
Floor Market Makers are lower than the trading permit fees for floor
market makers of at least one other equity options exchange that offers
a trading floor.\24\
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\20\ See supra note 12.
\21\ See, e.g., BOX Fee Schedule, Section I.D., Trading Floor
Participant Fees (providing that any Floor Broker that executes a
trade on 50% or more of the trading days in a given month will
receive a $5,000 trading floor credit).
\22\ See Cboe Fee Schedule, Floor Trading Permit Sliding Scales
section, page 7 (assessing floor broker monthly trading permit fees
of $7,500 for one permit; $5,700 per permit for the second and third
permits; $4,500 per permit for the fourth and fifth permits; and
$3,200 per permit for every permit utilized greater than five).
\23\ See BOX Fee Schedule, Section I.D., Trading Floor
Participant Fees (assessing floor brokers a fee of $5,000 per month
and providing that these fees apply in addition to the initiation
fee and monthly participant fee). BOX assesses floor broker trading
permit fees on a per-firm basis. Id.
\24\ See Nasdaq PHLX LLC (``PHLX'') Options Rules, Options 7
Pricing Schedule, Section 8.A. (assessing a fee of $6,000 per permit
per month to each PHLX member for each permit assigned to a floor
lead market maker or floor market maker). PHLX defines the term
``member'' as ``. . . a permit holder which has not been terminated
in accordance with the By-Laws and these Rules of the Exchange. A
member is a natural person and must be a person associated with a
member organization. Any references in the rules of the Exchange to
the rights or obligations of an associated person or person
associated with a member organization also includes a member''
(emphasis added). See PHLX General Equity and Options Rules, General
1, Section 1(16). Accordingly, the Exchange believes PHLX assesses
its trading floor permit fees on an individual basis to all floor
lead market makers and floor market makers, which is similar to the
Exchange's proposed permit fee structure for the Exchange's Floor
Market Makers. The Exchange notes that PHLX does not assess a
participant fee for floor participants; however, PHLX assesses each
clerk, floor broker, market maker and lead market maker a floor
facility fee of $330 per month. See PHLX Options Rules, Options 7
Pricing Schedule, Section 9.A.
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Desk and Badge Fees
The Exchange proposes to amend the Fee Schedule to establish new
Section 9)d), Desk and Badge Fees. In particular, the Exchange proposes
that all registered on-Floor persons (i.e., Clerks) employed by or
associated with a Floor Market Maker or Floor Broker must have a desk
and badge and will be charged the following fees: $350 per desk per
month; and $100 per badge per month. The purpose of these fees is to
assess firms for the space they utilize. The Exchange believes
assessing desk and badge fees will incentivize Floor Participants to
use their desk and on-Floor personnel space efficiently. Floor Brokers
utilize their desk space to communicate with customers, take orders,
and coordinate covering the Trading Floor to announce such orders into
the Crowd Area. Badges are issued and used by the Exchange to identify
all registered on-Floor personnel. This helps the Exchange promote
safety and security on the Trading Floor by ensuring that only validly
registered Floor Brokers, Floor Market Makers and their employees or
associates (i.e., Clerks) are actually on the Trading Floor at all
times.
The Exchange proposes to provide in the Fee Schedule that the
monthly desk and badge fees will be waived for the Initial Waiver
Period. The purpose of these fee waivers is to encourage prospective
Floor Participants to complete all necessary on-boarding requirements
as close as possible to the launch of the Trading Floor (or sooner),
which includes selecting desk space, registering all on-Floor personnel
and acquiring badges (a more fulsome description of the on-boarding
process is described in the statutory basis section). Waiving certain
fees is how exchanges have historically attracted membership and
competed for order flow soon after launching operations.\25\ Even
though the Exchange proposes to waive these particular fees during the
Initial Waiver Period, the Exchange believes that it is appropriate to
provide market participants with the overall structure of the fees by
outlining the structure and amounts in the Fee Schedule so that there
is general awareness that the Exchange intends to assess such fees upon
expiration of the defined term of the Initial Waiver Period. MIAX
Sapphire's proposed desk and badge fees are similar to the desk and
badge fees assessed to floor personnel by other equity options
exchanges that offer a trading floor.\26\
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\25\ See supra note 12.
\26\ See BOX Fee Schedule, Section I.D. (assessing a badge fee
of $100 per month and a desk fee of $350 per month for all
registered on-floor persons employed by or associated with a floor
market maker or floor broker); NYSE Arca Options Fee and Charges
Schedule, Floor and Equipment section (assessing a fee of $80 per
month, per linear foot for floor booths; assessing fees ranging from
$200 per month to $1,600 per month depending on the number of podium
utilized by floor market makers; and assessing a fee of $125 per
month for all registered floor personnel that do not pay a trading
permit fee). See also Cboe Fee Schedule, Floor Facility Fees
section, page 9 (assessing booth rental fees ranging from $400 to
$100 per booth per month, depending on the quantity utilized, as
well as in-crowd booth space of $750 per month). Cboe also assesses
a fee of $130 per month for floor manager badges and a fee of $100
for each replacement badge. Id.
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Remote Services Fees
The Exchange proposes to amend the Fee Schedule to establish new
Section 9)e), Remote Services Fees. In particular, the Exchange
proposes that Floor Participants that request MIAX Sapphire technical
support for (i) the Trading Floor data center, (ii) the Trading Floor,
or (iii) offices on the Trading Floor, will be assessed a fee of $250
per hour for such technical support, plus the cost of materials
necessary for MIAX Sapphire to complete such technical support. MIAX
Sapphire proposes to require a minimum of one (1) hour for remote
[[Page 45843]]
service requests with 24 hours required notice during the period
covering Monday through Friday, from 4:30 p.m. to 6:30 p.m. Eastern
Time. The Exchange proposes that for expedited service, MIAX Sapphire
will assess a fee of $500 per hour for such technical support, plus the
cost of materials necessary for MIAX Sapphire to complete such
technical support. Expedited service will also have a minimum of one
(1) hour for technical support requests and will apply during the
period covering Monday through Friday, from 7:30 a.m. to 5:30 p.m.
Eastern Time, as well as Exchange holidays and weekends. Expedited
service is be performed on a best efforts basis. The proposed $250
remote services fee is equal to the technical support request fee that
the Exchange charges Members \27\ of its electronic market for remote
assistance at the Exchange's data centers for electronic trading.\28\
MIAX Sapphire's proposed remote services fees are similar to remote and
technical service request fees assessed by at least one other equity
options exchange that offers a trading floor.\29\ The purpose of the
proposed expedited service fee is to encourage Floor Participants to
minimize ``rush'' jobs and encourage efficient use of the Exchange's
employees' time and resources.
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\27\ The term ``Member'' means an individual or organization
that is registered with the Exchange pursuant to Chapter II of
Exchange 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 the Definitions
section of the Fee Schedule and Exchange Rule 100.
\28\ See Fee Schedule, Section 5)f).
\29\ See NYSE Arca Connectivity Fee Schedule, page 18 (assessing
a fee of $100 per half hour for hot hands service in the data
centers and an expedite fee of $4,000 per request for installation/
completion of a user's co-location service).
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Shipping and Storage Fee
The Exchange proposes to amend the Fee Schedule to establish new
Section 9)f), Shipping and Storage Fee. The Exchange will offer Floor
Participants the ability to ship equipment and hardware to the Trading
Floor and Trading Floor data center, which MIAX Sapphire personnel will
receive and store upon receiving the minimum required notice.\30\ The
Exchange proposes that Floor Participants will be assessed a fee of
$100 per shipment, which includes one week of storage by MIAX Sapphire.
For each shipment that exceeds one week of storage, MIAX Sapphire will
assess each Floor Participant a fee of $400, which will include storage
for the remainder of the month, instead of the $100 per shipment fee.
MIAX Sapphire will assess each Floor Participant a fee of $400 per
month for all subsequent months of storage thereafter. The purpose of
assessing the fee on a monthly basis after the initial week is to
streamline billing for certain Floor Participants that have informed
the Exchange that they intend to store replacement equipment and
hardware at the Trading Floor and/or the Trading Floor data center
indefinitely. The Shipping and Storage will not be pro-rated.
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\30\ The Exchange will provide a shipping and storage form to
Floor Participants to fill out, which will described, among other
things, the shipment terms, timing and required notice.
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Floor Participants must provide the minimum required notice and per
shipment details as stated in the request form to MIAX Sapphire Trade
Operations prior to MIAX Sapphire personnel receiving such shipment.
MIAX Sapphire's proposed shipping and storage fee is similar to the
shipping fee assessed by at least one other equity options exchanges
that offers a trading floor.\31\
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\31\ See NYSE Arca Connectivity Fee Schedule, page 18 (assessing
a fee of $100 per shipment of goods received at a data center).
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Data Center Hosting Fees
The Exchange proposes to amend the Fee Schedule to establish new
Section 9)g), Data Center Hosting Fees. Located in the same building as
the Trading Floor is a small data center provided by the Exchange
solely to help support the trading activities of Floor Brokers and
Floor Market Makers (the ``545Wyn Data Center'').\32\ The data center
hosting service does not provide dedicated or ``co-located'' access to
the MIAX Sapphire trading system infrastructure, nor does it provide
any access or other latency advantage for Floor Participants. Floor
Brokers and Floor Market Makers may purchase dedicated space in the
545Wyn Data Center to install their firms' hardware and software
necessary to support their Trading Floor activities.\33\ The 545Wyn
Data Center is intended to provide a secure environment to facilitate
communication between a firm's desk on the Trading Floor and their
back-office (located outside of Miami) that will ultimately enter the
QFO or cQFO that originated from the Trading Floor. The Exchange notes,
however, that firms are not required to purchase space in the 545Wyn
Data Center. A firm may use a separate service provider to route their
messages from the Trading Floor to their back-office.
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\32\ The 545Wyn Data Center will not provide direct access to
the MIAX Sapphire trading system infrastructure, which is located in
Equinix's NY4 data center in Secaucus, New Jersey. See MIAX Sapphire
Options Exchange User Manual, Version 1.1.0, Section 5.03, dated
July 9, 2025, available at <a href="https://www.miaxglobal.com/miax_sapphire_user_manual.pdf">https://www.miaxglobal.com/miax_sapphire_user_manual.pdf</a>.
\33\ When a Floor Broker is ready to enter a QFO or cQFO into
the MIAX Sapphire trading system for execution, the Floor Broker
will enter the trade in their system that accesses the Exchange's
trading system infrastructure in Equinix, just as the firm would for
any other electronic order. The MIAX Sapphire trading system will
either accept or reject the QFO or cQFO based on all required system
checks (i.e., priority check; no trade-throughs of the Exchange's
electronic book or away-exchanges' displaying better prices, etc.).
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In particular, the Exchange proposes to assess an initial one-time
fee of $500 per 9-rack \34\ unit bay and a monthly fee of $1,500 per 9-
rack unit bay to all Floor Brokers, Floor Market Makers and non-Members
that want to house servers and other network equipment in the 545Wyn
Data Center. The Exchange proposes to provide in the Fee Schedule that
the initial and monthly data center hosting fees will be waived for the
Initial Waiver Period. The purpose of waiving these fees is to
incentivize market participants interested in becoming Floor
Participants of the Exchange's Trading Floor to set up their servers
and network equipment in the 545Wyn Data Center prior to or near
launch. Waiving certain fees is how exchanges have historically
attracted membership and competed for order flow soon after launching
operations.\35\ Even though the Exchange proposes to waive these
particular fees during the Initial Waiver Period, the Exchange believes
that it is appropriate to provide market participants with the overall
structure of the fees by outlining the structure and amounts in the Fee
Schedule so that there is general awareness that the Exchange intends
to assess such fees upon expiration of the defined term of the Initial
Waiver Period. Other exchanges that operate trading floors offer data
center services and charge floor participants varying fees based on
cabinet or rack space utilized. Although the data center services
provided by those exchanges offer direct or ``co-located'' access to
their trading system infrastructure, the Exchange compared those data
center service fees to the data center hosting fees proposed herein and
believes its proposed fees are similar to the co-location fees assessed
by other equity
[[Page 45844]]
options exchanges that offer a trading floor.\36\
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\34\ A data center rack (also referred to as a ``cabinet'') is a
vertical framework used to house and organize servers, network
equipment and other IT hardware. See, generally, <a href="https://www.equinix.com/products/data-center-services/colocation/cages-cabinets">https://www.equinix.com/products/data-center-services/colocation/cages-cabinets</a> (last visited May 27, 2025).
\35\ See supra note 12.
\36\ See NYSE Arca and NYSE American Connectivity Fee Schedule,
last updated April 24, 2025, available at <a href="https://www.nyse.com/publicdocs/nyse/Wireless_Connectivity_Fees_and_Charges.pdf">https://www.nyse.com/publicdocs/nyse/Wireless_Connectivity_Fees_and_Charges.pdf</a>
(assessing an initial fee of $2,500 per 8-rack unit of a partial
cabinet and monthly fees of $1,500 or $2,700 for each 8-rack unit of
a partial cabinet based on 1 or 2 kilowatt usage, respectively). The
Exchange does not propose to separately charge for power usage at
this time. See also PHLX Rules, General 8 Connectivity, Section
1(d), Additional Charges/Services (assessing a cabinet caging fee of
$3,300 per month and a cabinet equipment storage fee of $550 per
month, as well as installation fees that are ``installation
specific'').
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* * * * *
On July 18, 2025, the Exchange issued an alert to announce the
proposed Trading Floor non-transaction fees.\37\
---------------------------------------------------------------------------
\37\ See MIAX Sapphire Options Exchange Alert--Updated Summary
of Proposed Trading Floor Non-transaction Fees dated July 18, 2025,
available at <a href="https://www.miaxglobal.com/alert/2025/07/18/miax-sapphire-options-exchange-updated-summary-proposed-trading-floor-non?nav=all">https://www.miaxglobal.com/alert/2025/07/18/miax-sapphire-options-exchange-updated-summary-proposed-trading-floor-non?nav=all</a>.
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2. Statutory Basis
The Exchange believes that the proposed fees are consistent with
Section 6(b) of the Act \38\ in general, and furthers the objectives of
Section 6(b)(4) of the Act \39\ in particular, in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among Floor Participants, non-Members and other persons using the
Trading Floor or any facility or system thereof, which the Exchange
operates or controls. The Exchange also believes the proposed fees
further the objectives of Section 6(b)(5) of the Act \40\ in that they
are designed to promote just and equitable principles of trade, remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general protect investors and the
public interest and are not designed to permit unfair discrimination
between customers, issuers, brokers and dealers.
---------------------------------------------------------------------------
\38\ 15 U.S.C. 78f(b).
\39\ 15 U.S.C. 78f(b)(4).
\40\ 15 U.S.C. 78f(b)(5).
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Application and Initiation Fee (One-Time)
The Exchange believes the proposed one-time application and
initiation fees are reasonable, equitable and not unfairly
discriminatory because they are one-time fees that are reasonably
related to (and designed to recover) the Exchange's anticipated cost
associated with reviewing and approving applications for prospective
Floor Brokers and Floor Market Makers. This review and approval
consists primarily of the time and resources of Exchange personnel to
process the application and conduct the on-boarding process applicable
to Floor Participants. The Exchange's process to review and approve new
Floor Participants involves several steps and participation from
personnel in multiple Exchange departments, as follows: (i) reviewing
prospective Floor Participant information provided in various
membership forms, including, when necessary, consulting with the
Financial Industry Regulatory Authority (``FINRA'') pursuant to the
Exchange's regulatory services agreement; \41\ (ii) the on-boarding
process, where Exchange personnel contacts the firm for an introductory
meeting with the Exchange's Business Team to discuss goals, answer
questions and schedule the technical on-boarding meeting; (iii) the
technical on-boarding meeting, where the Exchange's on-boarding team
and Trading Operations Team guides the firm through the on-boarding
process with Exchange personnel available to discuss Trading Floor
functionality and operational issues; and (iv) follow-ups with the
Trading Operations Team to coordinate testing and Trading Floor desk
setup, as necessary, until the applicant becomes an active Floor
Participant.\42\
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\41\ See Securities Exchange Act Release No. 98746 (October 13,
2023), 88 FR 72116 (October 19, 2023) (File No. 10-240), Exhibit L
(describing the Exchange's proposed regulatory program, including
regulatory services agreement with FINRA).
\42\ See, generally, the Exchange's Membership and Technical
Onboarding process and forms, available at <a href="https://www.miaxglobal.com/markets/us-options/sapphire-options/membership">https://www.miaxglobal.com/markets/us-options/sapphire-options/membership</a>.
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Unlike the application and review process for the Exchange's
electronic Members, the application and review process for market
participants of the Trading Floor also requires the Exchange's on-
boarding team and Trading Operations team to review registrations for
all clerks that are employed by Floor Participants. Each Floor Broker
is required to disclose to the Exchange in detail, on an annual basis,
the specific nature of such additional functions (other than clerical
or ministerial) being performed by each clerk and each Floor Broker
must submit to the Exchange written supervisory procedures in relation
to such clerk's activities, which require review and approval by the
Exchange.\43\ The Exchange believes that the higher application and
initiation fee for Floor Participants as compared to electronic
Exchange Members is reasonable, equitably allocated and not unfairly
discriminatory because, in part, of the additional review work for all
on-Floor personnel, as well as physically helping each firm set up
their desks and office space on the Trading Floor.\44\
---------------------------------------------------------------------------
\43\ See Exchange Rule 2055(d).
\44\ See Fee Schedule, Section 3)a) (assessing one-time
membership application fees of $500 for EEMs and $1,000 for
electronic Market Makers).
---------------------------------------------------------------------------
As a self-regulatory organization, MIAX Sapphire's Membership Team
will review applicants to ensure that each applicant meets the
Exchange's qualification criteria prior to approval as a Floor
Participant. The Membership Team, in conjunction with the regulatory
department, reviews the registration and qualification of an
applicant's associated persons and clerks, the applicant's financial
health, the validity of its clearing relationship, and its disciplinary
history. The Membership Team also provides ongoing support to Floor
Participants with respect to membership changes, registration, and
other questions that commonly arise from Floor Participants regarding
such matters. The Exchange believes that it is reasonable to charge the
one-time application and initiation fees to Floor Brokers and Floor
Market Makers in order to cover anticipated costs of administering its
Trading Floor membership program. The Exchange believes that the
proposed one-time application and initiation fees for Floor Brokers and
Floor Market Makers are reasonable because the proposed fees are lower
than the one-time application fees assessed by at least one other
equity options exchange that offers a trading floor.\45\
---------------------------------------------------------------------------
\45\ See supra note 13.
---------------------------------------------------------------------------
The Exchange believes the proposed one-time application and
initiation fees are equitably allocated and not unfairly discriminatory
because the Exchange proposes to assess the same fee for each
application by Floor Brokers and Floor Market Makers. The Exchange
notes that at least one other equity options exchange that operates a
trading floor assesses the same fee, regardless of the type of floor
member (i.e., floor broker or floor market maker).\46\
---------------------------------------------------------------------------
\46\ See supra note 13.
---------------------------------------------------------------------------
The Exchange believes it is reasonable to waive the one-time
application and initiation fees for Floor Brokers and Floor Market
Makers for the Initial Waiver Period to provide an incentive for market
participants to apply for Trading Floor membership in connection with
the launch of the MIAX Sapphire Trading Floor. The Exchange believes
waiving the one-time application and initiation fees are reasonable,
equitable and not unfairly discriminatory because the waiver will apply
uniformly to all prospective Floor Brokers and Floor Market Makers. The
Exchange also believes that the fee
[[Page 45845]]
waiver may provide an incentive for market participants interested in
becoming Floor Brokers and Floor Market Makers to submit early
applications, which may result in increased potential order flow and
liquidity as MIAX Sapphire begins Trading Floor operations.
At launch of the Trading Floor and for a limited time, the Exchange
anticipates having a smaller number of Floor Brokers and Floor Market
Makers as compared to other equity options exchanges that operate
trading floors, which are more established.\47\ The Exchange also notes
that it will not seek to recoup any of the actual costs associated with
reviewing Trading Floor applications that will take place from the
launch of Trading Floor operations through the expiration of the
Initial Waiver Period, which will likely be in excess of five months.
By the completion of the Initial Waiver Period, the Exchange
anticipates the majority of Floor Participants will have already
completed their applications and on-boarding as new Floor Participants,
all of whom will not pay the one-time application and initiation
fees.\48\ This means that the Exchange will likely not collect the
majority of Floor Participant application and initiation fees. The
Exchange believes it will assume approximately 100% of the anticipated
costs associated with processing Floor Participant applications for the
majority of Floor Participants approved by the Exchange (similar to
MIAX, MIAX Pearl, and MIAX Emerald for their electronic member
applications).\49\ Accordingly, the Exchange believes that it is
reasonable, equitable, and not unfairly discriminatory to waive the
one-time application and initiation fees during the Initial Waiver
Period to attract Floor Participants. The proposed one-time application
and initiation fees are not designed to be a profit center for the
Exchange. Once the Exchange has on-boarded its anticipated Floor
Participants prior to the expiration of the Initial Waiver Period, the
proposed one-time application and initiation fees are designed to
recover some of the anticipated costs on a going-forward basis for new
Floor Participants.
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\47\ The Exchange notes that other exchanges do not break out
their membership lists by trading floor participants and electronic
participants; however, these exchanges have more members than MIAX
Sapphire, which only began operations in August 2024. See, e.g.,
Cboe Form 1 Amendment, Exhibit M, filed April 22, 2025, available at
<a href="https://www.sec.gov/Archives/edgar/vprr/2500/25000132.pdf">https://www.sec.gov/Archives/edgar/vprr/2500/25000132.pdf</a> (providing
an updated list of Cboe members and sponsored participants totaling
227, which includes firms counted multiple times for multiple
business lines). The Exchange, on the other hand, has 39 EEMs and
Market Makers (including firms counted multiple times for multiple
business lines). See MIAX Sapphire Options Exchange Member
Directory, modified March 2025, available at <a href="https://www.miaxglobal.com/miax_sapphire_exchange_members.pdf">https://www.miaxglobal.com/miax_sapphire_exchange_members.pdf</a> (last visited
May 27, 2025).
\48\ As noted by the Exchange's affiliate when it filed to
introduce a one-time membership application fee, MIAX Emerald had 35
members that became members during the period of time that the one-
time membership application fee was waived, which are fees MIAX
Emerald will not be able to recoup. See Securities Exchange Act
Release No. 91030 (February 1, 2021), 86 FR 8465 (February 5, 2021)
(SR-EMERALD-2021-01) (``[MIAX Emerald] currently has 35 Members, all
of whom did not pay the one-time membership application fee, as it
was waived for the Waiver Period when these firms all became Members
of the Exchange. Further, the majority of firms that are Members of
the Exchange's affiliate options exchanges, MIAX and MIAX PEARL,
also became Members of those exchanges during similar Waiver Periods
for the MIAX and MIAX PEARL one-time membership application fees.
Accordingly, the Exchange (and MIAX and MIAX PEARL) have assumed
approximately 100% of the costs associated with processing
membership applications for the majority of Member firms approved by
the Exchange, MIAX, and MIAX PEARL.'').
\49\ See id.
---------------------------------------------------------------------------
Although the Exchange proposes to waive the one-time application
and initiation fees for the Initial Waiver Period, the Exchange
proposes to include the proposed fee structure and amounts in the Fee
Schedule in order to communicate its intent to charge the one-time
application and initiation fees to Floor Brokers and Floor Market
Makers upon the expiration of the defined term of the Initial Waiver
Period. As a new entrant to floor trading operations, the Exchange
chooses not to charge for new Floor Participants to join the Trading
Floor until the expiration of the Initial Waiver Period to encourage
market participants to trade on the Exchange and experience the quality
of the Exchange's technology and trading functionality. This practice
is not uncommon. New exchanges often do not charge fees or charge lower
fees for certain services such as memberships/trading permits to
attract order flow to an exchange, and later, once there is sufficient
depth and breadth of liquidity, amend their fees to reflect the true
value of those services, absorbing all costs to provide those services
in the meantime. Allowing new exchange entrants time to build and
sustain market share through various pricing incentives, before
establishing membership fees, encourages market entry and promotes
competition. It also enables new exchanges to mature their markets and
allow market participants to trade on the new exchanges without
membership fees serving as a potential barrier to attracting
memberships and order flow. The waiver is also a protection to new
Floor Participants. Prior to the expiration of the Initial Waiver
Period, if prospective Floor Participants are initiated to trade on the
Trading Floor but subsequently decide that they do not want to continue
trading on the MIAX Sapphire Trading Floor, they can cancel their
Trading Floor membership without having incurred the one-time
application and initiation fees.
Participant Fees
The Exchange believes the proposed monthly participant fees for
Floor Brokers and Floor Market Makers are reasonable, equitable and not
unfairly discriminatory because the proposed fees are lower than the
participant fees assessed by at least one other equity options exchange
that offers a trading floor.\50\ The Exchange believes the proposed
monthly participant fees are equitably allocated and not unfairly
discriminatory because the Exchange proposes to assess the same fee to
Floor Brokers and Floor Market Makers.
---------------------------------------------------------------------------
\50\ See supra note 15.
---------------------------------------------------------------------------
Although the Exchange proposes to waive the participant fees for
the Initial Waiver Period, the Exchange proposes to include the
proposed fee structure and amounts in the Fee Schedule in order to
communicate its intent to charge such fees to Floor Brokers and Floor
Market Makers upon the expiration of the defined term of the Initial
Waiver Period. As a new exchange entrant, the Exchange chooses not to
charge certain fees to new Floor Participants to join the Trading Floor
until the expiration of the Initial Waiver Period to encourage market
participants to trade on the Exchange and experience the quality of the
Exchange's technology and trading functionality. This practice is not
uncommon. New exchanges often do not charge fees or charge lower fees
for certain services to attract order flow to an exchange, and later,
once there is sufficient depth and breadth of liquidity, amend their
fees to reflect the true value of those services, absorbing all costs
to provide those services in the meantime. Allowing new exchange
entrants time to build and sustain market share through various pricing
incentives, before establishing membership fees, encourages market
entry and promotes competition. It also enables new exchanges to mature
their markets and allow market participants to trade on the new
exchanges without membership fees serving as a potential barrier to
attracting memberships and order flow. The waiver is also a protection
to new Floor Participants. Prior to the expiration of the Initial
Waiver Period, if prospective Floor Participants are initiated to trade
on the
[[Page 45846]]
Trading Floor but subsequently decide that they do not want to continue
trading on the MIAX Sapphire Trading Floor, they can cancel their
Trading Floor membership without having incurred any participant fees.
The Exchange believes waiving the monthly participant fee is
reasonable, equitable and not unfairly discriminatory because the
waiver will apply uniformly to all new Floor Brokers and Floor Market
Makers.
Trading Permit Fees
The Exchange believes its proposed monthly Trading Permit fees for
Floor Brokers are reasonable because they are lower than the trading
permit fees assessed to floor brokers of at least one other equity
options exchange that offers a trading floor,\51\ and are equal to the
trading permit fees assessed to floor brokers of at least one other
equity options exchange that offers a trading floor.\52\ MIAX
Sapphire's proposed Trading Permit fees for Floor Market Makers are
lower than the trading permit fees for floor market makers of at least
one other equity options exchange that offers a trading floor.\53\
---------------------------------------------------------------------------
\51\ See supra note 22.
\52\ See supra note 23.
\53\ See supra note 24.
---------------------------------------------------------------------------
Further, the Exchange believes that the proposal is reasonably
designed to allow the Exchange to compete with other options exchanges
that offer floor trading by incentivizing Floor Participants to
register as Floor Brokers and Floor Market Makers in a manner than
enables the Exchange to improve its overall competitiveness and
strengthen market quality for all market participants upon launch of
the Trading Floor.
The Exchange believes it is reasonable to assess Trading Permit
fees to each Floor Market Maker as compared to the proposed Trading
Permit fee structure for Floor Brokers (i.e., one fee per firm) because
the Trading Floor is not an unlimited space. Each on-Floor person is
required to have a desk, which physically takes up space. The Exchange
determined to charge Floor Brokers on a per firm basis and allocate
more space for Floor Brokers to encourage Floor Brokers to bring QFO
and cQFO volume to the Trading Floor. The Exchange believes this will
encourage the role performed by Floor Brokers in facilitating the
execution of orders on the Trading Floor, a function that the Exchange
wishes to support for the benefit of all market participants. The
Exchange believes this fee structure will incentivize Floor Broker
liquidity while balancing and recognizing the importance of Floor
Market Makers to make markets on the Exchange's Trading Floor and
interact with the orders brought to the Trading Floor for execution by
Floor Brokers. More liquidity should benefit all Floor Participants by
providing more trading opportunities, offering a more competitive venue
for order execution, thus improving market quality for all market
participants.
The Exchange also believes its proposal to provide an initial
Trading Permit fee waiver for Floor Market Makers and Floor Brokers
that execute a certain percentage of ADV is reasonable because the
volume requirement is low. The Exchange believes that the majority, if
not all, Floor Market Makers and Floor Brokers will achieve the
proposed ADV requirement and will have their Trading Permit fees waived
for the initial month the Trading Floor launches operations and the
five months thereafter. The Exchange believes this fee structure is
also designed to encourage liquidity on the Trading Floor while the
Trading Floor begins to operate, which may enhance competition by
encouraging additional order flow and liquidity, thereby benefiting all
Floor Participants.
The Exchange believes the proposed Trading Permit fees are
equitable and not unfairly discriminatory as the fees will apply
equally to all Floor Brokers and Floor Market Makers, respectively. The
Exchange proposes to assess one monthly Trading Permit fee to each firm
for all of the firm's registered Floor Brokers, instead of charging
each Floor Broker an individual Trading Permit fee. The Exchange also
proposes to assess each Floor Market Maker the same monthly Trading
Permit fee, regardless of the number of class appointments.
Although the Exchange proposes to waive the Trading Permit fees if
a Floor Broker or Floor Market Maker reaches a certain ADV in the
relevant month, the Exchange proposes to establish an initial fee
structure to communicate the Exchange's intent to charge Trading Permit
fees after February 2026. As a new exchange entrant with a new Trading
Floor, the Exchange chooses to offer Trading Permits for free to Floor
Participants that execute a low amount of volume in order to encourage
Floor Participants to trade on the Trading Floor and experience, among
other things, the quality of the Exchange's technology and trading
functionality. This practice is not uncommon.\54\ New exchanges often
do not charge fees or charge lower fees for certain services such as
memberships and trading permits to attract order flow to an exchange,
and later amend their fees to reflect the true value of those services,
absorbing all costs to provide those services in the meantime. Allowing
new exchange entrants time to build and sustain market share through
various pricing incentives before increasing certain fees encourages
market entry and promotes competition. It also enables new exchanges to
mature their markets and allow market participants to trade on the new
exchanges without fees serving as a potential barrier to attracting
memberships and order flow.\55\ The Exchange notes at least one other
exchange that operates a trading floor provides an even lower volume
threshold in order for its floor brokers to receive a trading permit
fee credit that essentially makes their trading permit fees free for
the particular month.\56\
---------------------------------------------------------------------------
\54\ See supra note 21.
\55\ See e.g., Securities Exchange Act Release Nos. 94894 (May
11, 2022), 87 FR 29987 (May 17, 2022) (SR-BOX-2022-17) (stating,
``[t]he Exchange established this lower (when compared to other
options exchanges in the industry) Participant Fee in order to
encourage market participants to become Participants of BOX . .
.''); 90076 (October 2, 2020), 85 FR 63620 (October 8, 2020) (SR-
MEMX-2020-10) (``MEMX membership fee proposal'') (proposing to adopt
the initial fee schedule and stating that ``[u]nder the initial
proposed Fee Schedule, the Exchange proposes to make clear that it
does not charge any fees for membership, market data products,
physical connectivity or application sessions.''); 93927 (January 7,
2022), 87 FR 2191 (January 13, 2022) (SR-MEMX-2021-19) (proposing to
adopt membership fees); 95299 (July 15, 2022), 87 FR 43563 (July 21,
2022) (SR-MEMX-2022-17) (proposing to adopt fees for connectivity);
and No. 88211 (February 14, 2020), 85 FR 9847 (February 20, 2020)
(SR-NYSENAT-2020-05).
\56\ See supra note 21.
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Desk and Badge Fees
The Exchange believes that the proposed monthly desk fee is
reasonable as it is the same as a similar fee charged at another
exchange that operates a physical trading floor.\57\ Further, the
Exchange believes that the proposed desk fee is equitable and not
unfairly discriminatory because it applies uniformly to all on-Floor
personnel employed by or associated with a Floor Market Maker or Floor
Broker Participants. The desk fee provides for the equitable allocation
of reasonable fees among Floor Participants by requiring Floor
Participants that need more space to pay more by utilizing more desks,
instead of raising the fees for all Floor Participants, including those
that may not need additional desks and space.\58\ The new Trading
[[Page 45847]]
Floor, while offering a large space,\59\ is not unlimited. Because
Floor Market Maker desks are integrated in the Trading Floor, the more
physical space occupied by a single Floor Market Maker firm (e.g.
multiple desks) means less physical space for other Floor Market Makers
to participate in the Crowd Area. Thus, the Exchange believes the
proposed fees reflect this reality and will encourage efficient use of
space by all Floor Participants.
---------------------------------------------------------------------------
\57\ See supra note 26.
\58\ The Exchange notes that amount of space for each desk is
the same for all Floor Participants, regardless of whether they are
a Floor Market Maker or Floor Broker.
\59\ See MIAX Press Release--Miami International Holdings
Announces New MIAX Sapphire Options Trading Floor to be Located in
Wynwood District of Miami; 38,400 Square Foot Facility will Include
Office Space for MIAX Employees and Market Participants, dated
December 4, 2023, available at <a href="https://www.miaxglobal.com/sites/default/files/alert-files/MIAX_Press_Release_12042023.pdf">https://www.miaxglobal.com/sites/default/files/alert-files/MIAX_Press_Release_12042023.pdf</a>.
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The Exchange believes the proposed badge fee is reasonable,
equitably allocated and not unfairly discriminatory because the
Exchange will use badges to identify all registered on-Floor personnel.
This helps the Exchange promote safety and security on the Trading
Floor by ensuring that only validly registered Floor Brokers, Floor
Market Makers and their employees or associates (i.e., Clerks) are
actually on the Trading Floor at all times. Accordingly, the Exchange
believes that it is reasonable, equitably allocated and not unfairly
discriminatory to assess a modest badge fee for these purposes.
The Exchange believes the proposed desk and badge fees are
reasonable because they will be assessed to firms for the space they
utilize and incentivize Floor Participants to use their space
efficiently in how much desk space they utilize as well as number of
on-Floor persons that are employed by each Floor Broker and Floor
Market Maker. Floor Brokers utilize their desk space to communicate
with customers, take orders, and coordinate covering the Trading Floor
to announce such orders into the crowd area. The Exchange believes the
proposed fees are reasonable because they are designed to reflect the
differing business needs of each Floor Broker and Floor Market Maker
while offering each firm some flexibility in setting up their desk
space consistent with their particular business models/commercial
preferences.
The Exchange believes it is reasonable to waive the desk and badge
fees for the Initial Waiver Period to provide an incentive for market
participants to become Floor Participants in connection with the launch
of the MIAX Sapphire Trading Floor. The Exchange believes waiving the
desk and badge fees is reasonable, equitable and not unfairly
discriminatory because the waiver will apply uniformly to all on-Floor
personnel employed by or associated with new Floor Brokers and Floor
Market Makers.
Remote Services Fees
The Exchange believes that the proposed remote services fees are
reasonable, equitable and not unfairly discriminatory because they will
be assessed equally to all Floor Participants that request technical
support at the Trading Floor data center, on the Trading Floor, as well
as for offices on the Trading Floor, at the proposed hourly rates. The
Exchange believes the proposed expedited service fee is reasonable
because it is designed to encourage Floor Participants to minimize
``rush'' jobs and encourage efficient use of the Exchange's employees'
time and resources. The proposed remote services fees is equal to the
technical support request fee that the Exchange charges Members of its
electronic market for remote assistance at the Exchange's data centers
for electronic trading.\60\ MIAX Sapphire's proposed remote services
fees are similar to remote and technical service request fees assessed
by at least one other equity options exchange that offers a trading
floor.\61\
---------------------------------------------------------------------------
\60\ See supra note 28.
\61\ See supra note 29.
---------------------------------------------------------------------------
Shipping and Storage Fee
The Exchange believes the proposed shipping and storage fee is
reasonable because it is designed to recoup some of the personnel,
administrative and security costs incurred by the Exchange for
receiving and storing equipment that belongs to Floor Participants.
Prospective Floor Participants have already informed the Exchange that
they intend to ship certain equipment to be used on the Trading Floor
and for the Trading Floor data center directly to the Exchange and have
requested storage of that equipment. The Exchange was also informed by
prospective Floor Participants that they would like the Exchange to
store their backup equipment on an indefinite basis. Accordingly, the
Exchange believes the proposed fee is reasonable to recover the initial
and on-going costs of storing equipment for Floor Participants.
The Exchange also believes the proposed shipping and storage fee is
equitably allocated and not unfairly discriminatory because the
proposed fee will apply uniformly to all Floor Participants for each
conforming shipment that is sent to the Exchange for storage. The
proposed fee is also similar to the shipping fee assessed by at least
one other equity options exchanges that offers a trading floor.\62\
---------------------------------------------------------------------------
\62\ See supra note 31.
---------------------------------------------------------------------------
Data Center Hosting Fees
The Exchange believes the proposed one-time and monthly data center
hosting fees are reasonable because they are similar to the fees
assessed by other equity options exchanges that offer data center
services based on cabinet or rack space and operate a trading
floor.\63\ Floor Participants will have their own servers, network
equipment and other IT hardware equipment installed within the 545Wyn
Data Center, which will require an initial setup for a one-time fee, as
well as on-going space and power. The proposed monthly data center
hosting fees are intended to offset some of these costs on a flat,
monthly rate as compared to other exchanges that assess similar fees
plus fees for power utilized within their data centers. The Exchange
also believes the proposed data center hosting fees are equitably
allocated and not unfairly discriminatory because the proposed fees
will apply uniformly to all Floor Participants based on the number of
9-rack unit bays being utilized.
---------------------------------------------------------------------------
\63\ See supra note 36.
---------------------------------------------------------------------------
The Exchange believes it is reasonable to waive data center hosting
fees for the Initial Waiver Period to provide an incentive for market
participants to become Floor Participants in connection with the launch
of the MIAX Sapphire Trading Floor. The Exchange believes waiving the
data center hosting fees are reasonable, equitable and not unfairly
discriminatory because the waiver will apply uniformly to all Floor
Participants, regardless of the number of 9-rack unit bays being
utilized for their equipment.
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 that is not necessary or appropriate
in furtherance of the purposes of the Act.
Intra-Market Competition
One-Time Application and Initiation Fees
The Exchange believes the proposed one-time application and
initiation fees will not result in any burden on intra-market
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The proposed one-time application and initiation
fees for Floor Brokers and Floor Market Makers are lower than, or
comparable to, the
[[Page 45848]]
one-time application fees assessed by other equity options exchanges
that offer a trading floor.\64\ Further, the Exchange proposes to waive
the one-time application and initiation fees for the Initial Waiver
Period, which the Exchange believes will provide an incentive for
market participants interested in becoming Floor Participants to submit
early applications, resulting in increased potential order flow and
liquidity as the Trading Floor begins to operate, thereby promoting
competition.
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\64\ See supra note 13.
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Participant Fees
The Exchange believes the proposed participant fee will not result
in any burden on intra-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act because it is not
designed to address a competitive issue. The Exchange believes that
establishing a flat monthly participant fee that is the same for both
Floor Brokers and Floor Market Makers will not result in any burden on
intra-market competition. At least one other exchange that operates a
trading floor charges a similar type of monthly fee at a higher
rate.\65\ Further, the Exchange proposes to waive the participant fees
for the Initial Waiver Period, which the Exchange believes will provide
an incentive for market participants interested in becoming Floor
Participants to submit early applications, resulting in increased
potential order flow and liquidity as the Trading Floor begins to
operate, thereby promoting competition.
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\65\ See supra note 15.
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Trading Permit Fees
The Exchange believes the proposal to charge Floor Brokers on a per
firm basis but not Floor Market Makers does not impose any burden on
intra-market competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange believes its proposal does not impose any burden on
intra-market competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the Trading Floor is not
an unlimited space. Each on-Floor person is required to have a desk,
which physically takes up space. The Exchange determined to charge
Floor Brokers on a per firm basis and allocate more space for Floor
Brokers to encourage Floor Brokers to bring QFO and cQFO volume to the
Trading Floor. The Exchange believes this will encourage the role
performed by Floor Brokers in facilitating the execution of orders on
the Trading Floor, a function that the Exchange wishes to support for
the benefit of all market participants. The Exchange believes this fee
structure will incentivize Floor Broker liquidity while balancing and
recognizing the importance of Floor Market Makers to make markets on
the Exchange's Trading Floor and interact with the orders brought to
the Trading Floor for execution by Floor Brokers. More liquidity should
benefit all Floor Participants by providing more trading opportunities,
offering a more competitive venue for order execution, thus improving
market quality for all market participants.
The Exchange believes the proposal to waive the Trading Permit fees
if a Floor Broker or Floor Market Maker achieves a certain ADV in the
relevant month does not impose any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because the Exchange believes it set a reasonably low volume threshold
(i.e., 100 contracts ADV) for Floor Participants to achieve in order to
have their Trading Permit fees waived. The Exchange believes it set a
low enough volume threshold that the majority, if not all, Floor
Brokers and Floor Market Makers will be able to achieve, while also
implementing a fee structure designed to encourage liquidity on the
Trading Floor while the Trading Floor begins to operate. The Exchange
believes that this may enhance competition by encouraging additional
order flow and liquidity, thereby benefiting all Floor Participants.
The Exchange notes at least one other exchange that operates a trading
floor provides an even lower volume threshold in order for its floor
brokers to receive a trading permit fee credit that essentially makes
their trading permit fees free for the particular month.\66\
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\66\ See supra note 21.
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As a new exchange entrant with a new Trading Floor, the Exchange
chooses to offer Trading Permits for free to Floor Participants that
execute a low amount of volume in order to encourage Floor Participants
to trade on the Trading Floor and experience, among other things, the
quality of the Exchange's technology and trading functionality. This
practice is not uncommon.\67\ New exchanges often do not charge fees or
charge lower fees for certain services such as memberships and trading
permits to attract order flow to an exchange, and later amend their
fees to reflect the true value of those services, absorbing all costs
to provide those services in the meantime. Allowing new exchange
entrants time to build and sustain market share through various pricing
incentives before increasing certain fees encourages market entry and
promotes competition. It also enables new exchanges to mature their
markets and allow market participants to trade on the new exchanges
without fees serving as a potential barrier to attracting memberships
and order flow.\68\
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\67\ See supra note 12.
\68\ See supra note 55.
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Desk and Badge Fees
The Exchange believes the proposed desk and badge fees will not
result in any burden on intra-market competition that is not necessary
or appropriate in furtherance of the purposes of the Act. The proposed
desk fee is the same as a similar fee charged at another exchange with
a physical trading floor.\69\ Further, the proposed desk fee will apply
uniformly to all on-Floor personnel employed by or associated with a
Floor Market Maker or Floor Broker. The proposed desk fee will not
result in any burden on intra-market competition that is not necessary
or appropriate in furtherance of the purposes of the Act because the
new Trading Floor, while offering a large space, is not unlimited.
Because Floor Market Maker desks are integrated in the Trading Floor,
the more physical space occupied by a single Floor Market Maker firm
(e.g., multiple desks) means less physical space for other Floor Market
Makers to participate in the Crowd Area. Thus, the Exchange believes
the proposed fees reflect this reality and will encourage efficient use
of space by all Floor Participants.
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\69\ See supra note 26.
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The Exchange believes the proposed desk and badge fee structure,
including waiver of the such fees for the Initial Waiver Period, will
not result in any burden on intra-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because this will provide an incentive for prospective Floor
Participants to register and become Floor Participants of the Trading
Floor sooner. In turn, the Exchange believes this may encourage
potential order flow and additional liquidity providers as the Trading
Floor begins operations, which may benefit all market participants of
the Trading Floor.
Remote Services Fees
The Exchange believes that the proposed remote services fees will
not result in any burden on intra-market competition that is not
necessary or
[[Page 45849]]
appropriate in furtherance of the purposes of the Act because the
proposed fee is not intended to address a competitive issue; rather,
the proposed fee is intended to cover the cost associated with Floor
Participants that request technical support at the Trading Floor data
center, on the Trading Floor, as well as offices on the Trading Floor.
The Exchange believes the proposed expedited service fee will not
result in any burden on intra-market competition that is not necessary
or appropriate in furtherance of the purposes of the Act because it is
designed to encourage Floor Participants to minimize ``rush'' jobs and
encourage efficient use of the Exchange's employee time and resources.
The proposed $250 remote services fee is equal to the technical support
request fee that the Exchange charges Members of its electronic market
for remote assistance at the Exchange's data centers for electronic
trading.\70\ MIAX Sapphire's proposed remote services fees are similar
to remote and technical service request fees assessed by at least one
other equity options exchange that offers a trading floor.\71\
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\70\ See Fee Schedule, Section 5)f).
\71\ See NYSE Arca Connectivity Fee Schedule, page 18 (assessing
a fee of $100 per half hour for hot hands service in the data
centers and an expedite fee of $4,000 per request for installation/
completion of a user's co-location service).
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Shipping and Storage Fee
The Exchange believes that the proposed shipping and storage fee
will not result in any burden on intra-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because the proposed fee is not intended to address a competitive
issue; rather, the proposed fee is intended to recoup some of the
personnel, administrative and security costs incurred by the Exchange
for receiving and storing equipment that belongs to Floor Participants.
Prospective Floor Participants have already informed the Exchange that
they intend to ship certain equipment to be used on the Trading Floor
and for the Trading Floor data center directly to the Exchange and have
requested storage of that equipment. The Exchange was also informed by
prospective Floor Participants that they would like the Exchange to
store their backup equipment on an indefinite basis. Accordingly, the
Exchange believes the proposed fee will not result in any burden on
intra-market competition and will apply uniformly to all Floor
Participants for each conforming shipment that is sent to the Exchange
for storage. The proposed fee is also similar to the shipping fee
assessed by at least one other equity options exchanges that offers
floor trading.\72\
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\72\ See supra note 31.
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Data Center Hosting Fees
The Exchange believes that the proposed data center hosting fees
will not result in any burden on intra-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because the proposed fees are similar to the fees assessed by other
equity options exchanges that offer data center services and charge
fees based on cabinet or rack space utilized and operate a trading
floor.\73\ Floor Participants will install their own equipment within
the 545Wyn Data Center, which will require an initial setup, as well as
on-going space and power to be paid for by the Exchange. The proposed
monthly data center hosting fees are intended to offset some of these
costs on a flat, monthly rate as compared to other exchanges that
assess similar fees based on power utilized within their data centers.
The proposed data center hosting fees will apply uniformly to all Floor
Participants based on the number of 9-rack unit bays being utilized.
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\73\ See supra note 36.
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The Exchange believes that waiving data center hosting fees for the
Initial Waiver Period will not result in any burden on intra-market
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because the fee waiver is intended to provide an
incentive for market participants to become Floor Participants in
connection with the launch of the MIAX Sapphire Trading Floor.
Inter-Market Competition
The Exchange believes that the proposed changes will not result in
any burden on inter-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
believes that market participants have the choice to trade on the
Exchange's Trading Floor, electronic platform, or not trade on the
Exchange at all. The Exchange believes that all of the proposed non-
transaction fees will not cause any burden on inter-market competition
because none of the proposed fees are intended to impact the ability to
compete of other exchanges' that offer a trading floor for equity
options.
Accordingly, the Exchange does not believe its proposed fee changes
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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,\74\ and Rule 19b-4(f)(2) \75\ 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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\74\ 15 U.S.C. 78s(b)(3)(A)(ii).
\75\ 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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#8bf9fee7eea6e8e4e6e6eee5fff8cbf8eee8a5ece4fd"><span class="__cf_email__" data-cfemail="0d7f786168206e6260606863797e4d7e686e236a627b">[email protected]</span></a>. Please include
file number SR-SAPPHIRE-2025-37 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-SAPPHIRE-2025-37. 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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. Do not include
personal
[[Page 45850]]
identifiable information in submissions; you should submit only
information that you wish to make available publicly. We may redact in
part or withhold entirely from publication submitted material that is
obscene or subject to copyright protection. All submissions should
refer to file number SR-SAPPHIRE-2025-37 and should be submitted on or
before October 14, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\76\
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\76\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-18366 Filed 9-22-25; 8:45 am]
BILLING CODE 8011-01-P
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