Notice2026-10668
Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX Sapphire Options Exchange Fee Schedule To Establish a Firm Fee Cap
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
May 29, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 103 (Friday, May 29, 2026)</title>
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[Federal Register Volume 91, Number 103 (Friday, May 29, 2026)]
[Notices]
[Pages 32141-32145]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-10668]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105551; File No. SR-SAPPHIRE-2026-25]
Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the MIAX Sapphire Options Exchange Fee Schedule To Establish a Firm Fee
Cap
May 26, 2026.
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 May 13, 2026, MIAX Sapphire, LLC (``MIAX Sapphire'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the MIAX Sapphire Options Exchange
Fee Schedule (``Fee Schedule'') to: (1) establish a monthly Firm Fee
Cap to waive Trading Floor transaction fees resulting from certain
transactions for Member and Member organizations trading in their own
proprietary account that met a defined amount each month; and (2) make
corresponding changes to other sections of the Fee Schedule to clarify
the impact of the Firm Fee Cap on fees and rebates resulting from other
Trading Floor transactions (all terms described below).
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
The Exchange proposes to amend the Fee Schedule to: (1) establish a
monthly Firm Fee Cap to waive Trading Floor \3\ transaction fees
resulting from certain transactions for Member \4\ and Member
organizations trading in their own proprietary account that met a
defined amount each month; and (2) make corresponding changes to other
sections of the Fee Schedule to clarify the impact of the Firm Fee Cap
on fees and rebates resulting from other Trading Floor transactions.
The Exchange initially filed this proposed rule change on May 1,
2026.\5\ On May 13, 2026, the Exchange withdrew SR-SAPPHIRE-2026-22 and
refiled this proposal.
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\3\ 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 the Definitions section of the Fee Schedule
and Exchange Rule 100.
\4\ See Exchange Rule 100.
\5\ See SR-SAPPHIRE-2026-22 (withdrawn without being noticed by
the Securities and Exchange Commission).
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Background of Fees and Rebates for Transactions on the Trading Floor
The Exchange assesses fees (and/or provides rebates) for
transactions on the Trading Floor based on origin. Currently, for
Priority Customers \6\ and Professional Customers,\7\ the Exchange does
not assess a per contract fee (or provide a rebate) for Qualified Floor
Order (``QFO'') \8\ and Complex Qualified Floor Order (``cQFO'') \9\
transactions \10\ in all multiply-listed Penny and non-Penny
classes.\11\ The Exchange assesses a $0.25 per contract fee for QFO and
cQFO transactions in SPY/QQQ/IWM, Penny classes (excluding SPY/QQQ/
IWM), and non-Penny classes, for Away Market Maker,\12\ Firm, and
Broker-Dealer origins. The Exchange does not assess a fee (or provide a
rebate) for QFO and cQFO transactions in SPY/QQQ/IWM, Penny classes
(excluding SPY/QQQ/IWM), and non-Penny classes, for Firm and Broker-
Dealer origins that are facilitating a Priority Customer or
Professional Customer order. The Exchange assesses Floor Market Makers
\13\ a fee of $0.50 per contract for QFO and cQFO transactions
[[Page 32142]]
that trade against all other origins.\14\ The Exchange provides a
rebate of ($0.10) per contract for QFO and cQFO transactions in SPY/
QQQ/IWM, Penny classes (excluding SPY/QQQ/IWM), and non-Penny classes,
for Floor Broker \15\ origins on both the agency and contra sides when
that side is billable. The Exchange also provides a Floor Broker
Breakup Credit of ($0.20) per contract for QFO and cQFO transactions in
SPY/QQQ/IWM, Penny classes (excluding SPY/QQQ/IWM), and non-Penny
classes.\16\
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\6\ The term ``Priority Customer'' means a person or entity that
(i) is not a broker or dealer in securities, and (ii) does not place
more than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See id.
\7\ The term ``Professional Customer'' for the purposes of the
Fee Schedule, shall mean a Public Customer that is not a Priority
Customer. See the Definitions section of the Fee Schedule. The term
``Public Customer'' means a person that is not a broker or dealer in
securities. See id.
\8\ See Exchange Rule 2040.
\9\ See Exchange Rule 2040(a)(4).
\10\ A QFO or cQFO must be entered as a two-sided order, with an
initiating side and a contra side and the QFO and cQFO fees,
rebates, and applicable fee and rebate caps will apply to both sides
of the order. Further, cQFO fees and rebates are per executed side
per leg. See Fee Schedule, Section 1)c)i).
\11\ See Exchange Rule 510(c).
\12\ The term ``Away Market Maker'' for the purposes of the Fee
Schedule, shall mean a non MIAX Sapphire Market Maker.
\13\ The term ``Floor Market Maker'' means 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 the Definitions section of the Fee Schedule and
Exchange Rule 2105.
\14\ See Fee Schedule, Section 1)c)i).
\15\ The term ``Floor Broker'' means 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 the
Definitions section of the Fee Schedule and Exchange Rule 2015. The
term ``Floor Participant'' means Floor Brokers as defined in Rule
2015 and Floor Market Makers as defined in Rule 2105(b). See id. and
Exchange Rule 100.
\16\ The Floor Broker Breakup Credit will apply to the Floor
Broker that submits the QFO or cQFO instead of the Floor Broker
rebate for executions that trade with a Floor Market Maker. See id.
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The Exchange also assesses fees (and/or provides rebates) for QCC
\17\ and cQCC \18\ transactions on the Trading Floor based on origin.
All fees and rebates are per contract per leg of the transaction. In
particular, for both QCC and cQCC transactions, the Exchange assesses
the following fees for both the initiator and contra-sides of the
transaction: $0.00 per contract for Priority Customers; $0.12 per
contract for Professional Customers; and $0.20 per contract for all
other market participants (i.e., Floor Market Maker, Away Market Maker,
Broker-Dealer, and Firm). For both QCC and cQCC transactions, the
Exchange provides the following rebates to the Floor Broker entering
the order when the contra-side is a Priority Customer origin: ($0.00)
per contract for Priority Customers; ($0.07) per contract for
Professional Customers; and ($0.17) per contract for all other market
participants (i.e., Floor Market Maker, Away Market Maker, Broker-
Dealer, and Firm). For both QCC and cQCC transactions, the Exchange
provides the following rebates to the Floor Broker entering the order
when the contra-side is Professional Customer: ($0.07) per contract for
Priority Customers; ($0.17) per contract for Professional Customers;
and ($0.25) per contract for all other market participants (i.e., Floor
Market Maker, Away Market Maker, Broker-Dealer, and Firm). Finally, for
both QCC and cQCC transactions, the Exchange provides the following
rebates to the Floor Broker entering the order when the contra-side is
all other market participants (i.e., Floor Market Maker, Away Market
Maker, Broker-Dealer, and Firm): ($0.17) per contract for Priority
Customers; ($0.25) per contract for Professional Customers; and ($0.30)
per contract for all other market participants (i.e., Floor Market
Maker, Away Market Maker, Broker-Dealer, and Firm).
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\17\ A QCC transaction is comprised of an `initiating order' to
buy (sell) at least 1,000 contracts that is identified as being part
of a qualified contingent trade, coupled with a contra-side order to
sell (buy) an equal number of contracts. See Fee Schedule, Section
1)c)ii).
\18\ A cQCC transaction is comprised of an `initiating complex
order' to buy (sell) where each component is at least 1,000
contracts that is identified as being part of a qualified contingent
trade, coupled with a contra-side complex order or orders to sell
(buy) an equal number of contracts. The stock handling fee for the
stock leg of cQCC transactions is described in Section 1)c)vi) of
the Fee Schedule. See Fee Schedule, Section 1)c)iii).
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Proposal To Establish a Firm Fee Cap
First, the Exchange proposes to establish new Section 1)c)vii) in
the Fee Schedule, which will be titled ``Firm Fee Cap.'' The Exchange
proposes that new Section 1)c)vii) will provide that Member and Member
organization Firm origin Trading Floor transaction charges are subject
to a monthly fee cap of $225,000 (``Firm Fee Cap''). Specifically, the
Exchange will waive Trading Floor transaction fees (after $225,000)
resulting from QFO, cQFO, QCC and cQCC transactions for Members and
Member organizations trading in their own proprietary account that met
the Firm Fee Cap per Clearing Corporation \19\ account for each
relevant month. The Exchange proposes to provide that the fees
resulting from the following Trading Floor transactions will not be
counted towards the monthly Firm Fee Cap: strategy transactions
described in Section 1)c)v); \20\ C2C and cC2C orders described in
Section 1)c)iv); \21\ and fees for orders executed on the Electronic
Book \22\ described in Section 1)a). The Exchange also proposes to add
text that commingled accounts, defined as accounts where Firm
transactions are executed for the benefit of entities other than the
Clearing Corporation account owner, are excluded from counting towards
the monthly Firm Fee Cap.\23\
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\19\ The term ``Clearing Corporation'' means The Options
Clearing Corporation. See Exchange Rule 100.
\20\ Currently, strategy transactions include Box Spreads, Jelly
Roll Strategies, Short/Long Stock Interest Spreads, Merger Spreads,
Reversal/Conversion Spreads, and Dividend Strategies. See the
Definitions section of the Fee Schedule for the definition of each
strategy transaction.
\21\ A C2C Order is comprised of a Priority Customer Order to
buy and a Priority Customer Order to sell at the same price and for
the same quantity. A cC2C Order is comprised of one Priority
Customer complex order to buy and one Priority Customer complex
order to sell at the same price and for the same quantity. See Fee
Schedule, Section 1)c)iv).
\22\ The term ``Electronic Book'' means the Exchange's Simple
Order Book and Strategy Book. See the Definitions section of the Fee
Schedule and Exchange Rule 100.
\23\ At least one other exchange that operates a trading floor
for equity options trading maintains a similar requirement for
billing purposes for its members and member organizations that meet
that exchange's monthly firm fee cap. See Nasdaq PHLX LLC
(``PHLX''), Options 7: Pricing Schedule, Section 3, Monthly Firm Fee
Cap and Floor Facilitation section (providing that ``Members and
member organizations must notify [PHLX] in writing of all accounts
in which the member or member organization is not trading in its own
proprietary account. [PHLX] will not make adjustments to billing
invoices where transactions are commingled in accounts which are not
subject to the Monthly Firm Fee Cap.'').
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The purpose of establishing a monthly Firm Fee Cap is to provide an
incentive for market participants to send additional Firm origin orders
to be executed on the Trading Floor. Additional liquidity may benefit
all Floor Participants by providing more trading opportunities, which
may attract additional Floor Market Maker interaction with such orders.
An increase in the activity of these market participants in turn should
facilitate tighter spreads, which may cause an additional corresponding
increase in QFO, cQFO, QCC and cQCC order flow from other Floor
Participants and their customers. The purpose of excluding strategy
transactions and C2C and cC2C transactions from the proposed monthly
Firm Fee Cap is because qualifying strategy transactions are already
capped separately for Firm orders at $500 per day, per underlying \24\
and Floor Participants to C2C and cC2C transactions are neither rebated
nor assessed a fee for such transactions, thereby negating the impact
of such orders on the proposed Firm Fee Cap since there would be no
fees to aggregate.\25\ The Exchange notes that other exchanges that
operate a trading floor for equity options trading also have monthly
fee caps for certain origins while excluding strategy transactions and
electronic transactions from counting towards their monthly fee
caps.\26\
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\24\ See Fee Schedule, Section 1)c)v).
\25\ See Fee Schedule, Section 1)c)iv).
\26\ See PHLX, Options 7: Pricing Schedule, Section 3, Monthly
Firm Fee Cap and Floor Facilitation section (providing, in relevant
part, that electronic options transaction charges are excluded from
the monthly firm fee cap and all dividend, merger, short stock
interest, reversal and conversion, jelly roll, and box spread
strategy executions are excluded from the monthly firm fee cap); see
also NYSE Arca, Inc. (``NYSE Arca''), NYSE Arca Options Fees and
Charges, Firm and Broker Dealer Monthly Fee Cap section (providing
that the monthly fee cap is only applicable to firm proprietary fees
for manual executions, broker-dealer fees for transactions in
standard option contracts cleared in the customer range for manual
executions, and excluding strategy executions). The Exchange notes
that PHLX and NYSE Arca also assess a ``service'' or ``reduced''
charge for firms that achieve the monthly firm fee cap, which the
Exchange does not propose to assess with this filing.
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[[Page 32143]]
Proposal To Add Clarifying Text Regarding the Firm Fee Cap to Various
Sections of the Fee Schedule
Next, the Exchange proposes to make corresponding changes to other
sections of the Fee Schedule to clarify the impact of the proposed Firm
Fee Cap on fees and rebates generated from other transactions on the
Trading Floor.
The Exchange proposes to amend the third sentence in the first
paragraph of explanatory text below the table in Section 1)c)i) of the
Fee Schedule. Section 1)c)i) of the Fee Schedule provides the table of
fees and rebates for QFO and cQFO transactions on the Floor by origin.
In general, the explanatory text below the table describes, among other
things, how the Exchange assesses fees and provides rebates resulting
from QFO and cQFO transactions; specifically, that Floor Broker rebates
are only payable on the Floor Broker's billable sides. Therefore, the
third sentence in the first paragraph of explanatory text states that
the Floor Broker rebates will not apply to Priority Customer,
Professional Customer, Firm/Broker-Dealer Facilitating a Priority
Customer or Professional Customer, competing Floor Broker orders, and
Floor Market Maker (sides) executions. The Exchange propose to amend
the third sentence to add to the list origins/transactions where a
Floor Broker will not receive the Floor Broker rebates. In particular,
the Exchange proposes to provide that Floor Brokers will not receive
the rebates for Firm (sides) executions where the Firm Fee Cap
threshold has been met for the relevant Clearing Corporation account in
the relevant month.
As currently described in the Fee Schedule, Floor Broker rebates
are only payable on the Floor Brokers' billable sides. With the
implementation of the Firm Fee Cap, the Firm side of the QFO or cQFO
transaction would no longer be billable once the proposed $225,000
monthly Firm Fee Cap is met in the relevant Clearing Corporation
account number. Accordingly, the proposed change will add clarity to
the Fee Schedule that the Floor Broker rebate will no longer be
provided for the Firm side of the QFO or cQFO transaction once the Firm
Fee Cap is met since there will no longer be a billable side for that
particular Firm origin order.
The Exchange also proposes to amend the tables in Sections 1)c)ii)-
iii) of the Fee Schedule to add text to the fourth and sixth columns in
each table, which describe the tiered rebates that Floor Brokers will
receive for entering the QCC and cQCC orders depending on whether the
contra-side is Priority Customer origin or all other origins. In
particular, in each column titled ``Per Contract Rebate for Floor
Broker when Contra is a Priority Customer'', the Exchange proposes to
add ``Origin or Firm Origin that Met the Firm Fee Cap'' at the end of
the column title. In each column titled ``Per Contract Rebate for Floor
Broker when Contra is all Other Origins'', the Exchange proposes to add
``except Firm Origin that Met the Firm Fee Cap'' at the end of the
column title. The Exchange also proposes to insert a sentence at the
end of the explanatory text below the tables in Sections 1)c)ii)-iii)
of the Fee Schedule to provide that Floor Brokers that execute QCC [or
cQCC] transactions involving Firm orders on each side where both Firms
met the Firm Fee Cap in the relevant month will not be eligible for the
rebates described in the table above [for QCC or cQCC].\27\ The
Exchange also proposes to insert a sentence that states that the Firm
Fee Cap is described in Section 1)c)vii).
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\27\ For a QCC or cQCC transaction involving Firm origins on
both sides where both Firms met the Firm Fee Cap, there would be no
billable sides for the Floor Broker; accordingly, there would be no
payable rebates.
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With the proposed changes, a Floor Broker will receive the
following per contract rebates when there is a Firm origin order on any
side of a QCC or cQCC transaction and the Firm has met the proposed
Firm Fee Cap threshold in the relevant month: ($0.00) for Priority
Customer orders; ($0.07) for Professional Customer orders; and ($0.17)
for Floor Market Maker, Away Market Maker, Broker-Dealer and Firm
orders. The Exchange proposes to denote this by adding a new row at the
bottom of each of the QCC and cQCC tables for ``Firm Origin that Met
the Firm Fee Firm [sic],'' which will show the rebates as described in
this paragraph for a Firm that has met the Firm Fee Cap and is part of
a QCC or cQCC transaction.
The purpose of all these changes is to clarify how the Firm Fee Cap
will impact certain Floor Broker rebates and credits that would
otherwise apply for executing QFO, cQFO, QCC and cQCC transactions on
the Trading Floor for Firm origins that have met the Firm Fee Cap in a
particular month.
The proposed changes are immediately effective.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\28\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\29\ in particular, in that it
is not designed to permit unfair discrimination among customers,
brokers, or dealers. The Exchange also believes that its proposal is
consistent with Section 6(b)(4) of the Act \30\ because it represents
an equitable allocation of reasonable dues, fees and other charges
among its Members or issuers using its facilities.
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\28\ 15 U.S.C. 78f(b).
\29\ 15 U.S.C. 78f(b)(5).
\30\ 15 U.S.C. 78f(b)(4).
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The Exchange believes the proposal to establish the monthly Firm
Fee Cap for Firm origin QFO and cQFO transactions on the Trading Floor
is reasonable because this should provide an incentive for market
participants to send additional Firm origin orders to be executed on
the Trading Floor. Additional liquidity may benefit all Floor
Participants by providing more trading opportunities, which may attract
additional Floor Market Maker interaction with such orders. An increase
in the activity of these market participants in turn should facilitate
tighter spreads, which may cause an additional corresponding increase
in QFO, cQFO, QCC and cQCC order flow from other Floor Participants and
their customers. The Exchange also notes that the proposed Firm Fee Cap
of $225,000 per month is lower than the firm fee caps in place on other
exchanges that offer trading floors for equity options trading.\31\
Accordingly, Firms that meet the proposed Firm Fee Cap during a month
will not be assessed QFO and cQFO transaction fees after the $225,000
threshold is met and thus should be able to lower their monthly
transaction fees on the Trading Floor (or have a known fixed fee
amount) each month.
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\31\ See PHLX, Options 7: Pricing Schedule, Section 3, Monthly
Firm Fee Cap and Floor Facilitation section (providing that firms
are subject to a $250,000 monthly firm fee cap); see also NYSE Arca
Options Fees and Charges, Firm and Broker Dealer Monthly Fee Cap
section (providing a $250,000 cap per month for firm proprietary
fees for manual executions, among other origin executions).
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The Exchange believes the proposed Firm Fee Cap is not unfairly
discriminatory because all Firm origins are eligible to have their
Floor transaction fees capped each month so long as they provide
qualifying volume to the Floor (i.e., Firm QFO, cQFO, QCC and cQCC
orders). In addition, the Exchange believes that the proposed
[[Page 32144]]
monthly Firm Fee Cap, which applies only to Firm proprietary trades
executed on the Trading Floor, is not unfairly discriminatory to other
market participants because its purpose is to attract large order flow
to the Trading Floor, where such orders can be better handled in
comparison with electronic orders that are not negotiable. To the
extent that this purpose is achieved, all of the Exchange's Floor
Participants should benefit from the improved market liquidity,
particularly as the Trading Floor continues to ramp up operations since
its launch in September 2025.
The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to exclude C2C and cC2C transactions from the proposed
monthly Firm Fee Cap because Floor Participants to C2C and cC2C
transactions are neither rebated nor assessed a fee for such
transactions, thereby negating the impact of such orders on the
proposed Firm Fee Cap since there would be no fees to aggregate. The
Exchange believes it is reasonable, equitable and not unfairly
discriminatory to exclude fees resulting from strategy transactions
from counting towards the proposed monthly Firm Fee Cap because
strategy transaction fees are already capped separately from each other
on a daily basis per Firm, per underlying, at $500 per day,\32\ and
Firms will continue to be able to avail themselves of that capped fee
for each strategy transaction in addition to the Firm Fee Cap for other
transactions (i.e., QFO, cQFO, QCC and cQCC orders). Additionally,
other exchanges that operate a trading floor for equity options trading
also have monthly fee caps for certain origins (including firm) while
excluding strategy transaction fees from counting towards the fee caps
at those exchanges.\33\
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\32\ See Fee Schedule, Section 1)c)v).
\33\ See supra note 26.
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The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to count the fees resulting from Floor QCC and cQCC
transactions towards the proposed Firm Fee Cap because such
transactions involve large orders that should help a Firm meet the Firm
Fee Cap quicker, thereby reducing that Firm's transaction fees for
executions on the Trading Floor for its proprietary orders. The
Exchange believes counting Floor QCC and cQCC transaction fees towards
the monthly Firm Fee Cap may incentivize such order flow to the benefit
of all Floor Participants who may take the other side of a QCC or cQCC
transaction. Additionally, other exchanges with trading floors that
offer equity options trading similarly count QCC transaction fees
executed on the floors of those exchanges towards their monthly fee
caps.\34\
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\34\ See PHLX, Options 7: Pricing Schedule, Section 3, Monthly
Firm Fee Cap and Floor Facilitation section (counting QCC
transaction fees in the calculation of the monthly firm fee cap) and
NYSE Arca Options Fees and Charges, Firm and Broker Dealer Monthly
Fee Cap section (counting QCC transactions in the firm and broker-
dealer monthly fee cap calculation).
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The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to provide reduced rebates for Floor Brokers that enter
a QCC or cQCC transaction with a Firm order on any side of the
transaction where that Firm has met the Firm Fee Cap threshold in the
relevant month. This is because even with the proposed reduced rebates,
the Exchange believes Floor Brokers will continue to be incentivized to
enter QCC and cQCC orders, thereby generating larger rebates, and the
Firms providing such orders to the Floor Broker will also be
incentivized to send such order flow because they can reach the monthly
Firm Fee Cap quicker, reducing overall transaction fee costs for such
executions on the Trading Floor.
The Exchange believes that even with the proposed reduced rebates,
executing Floor Brokers will be able to continue to price their
services at a level that will enable them to attract Firm QCC and cQCC
order flow from participants who would otherwise enter these orders
electronically or choose another exchange. To the extent that Floor
Brokers are able to attract these Firm QCC and cQCC orders for
execution on the Floor, this should benefit all other Floor
Participants through the additional liquidity and price discovery that
may occur as a result.
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.
Inter-Market Competition
The proposal does not impose an undue burden on inter-market
competition. The Exchange believes its proposal remains competitive
with other options exchanges that offer a trading floor and similar fee
caps for certain origins \35\ and this proposal will offer market
participants with another choice of where to execute such transactions.
The Exchange notes that it operates in a highly competitive market in
which market participants can readily favor competing venues if they
deem fee levels at a particular venue to be excessive, or rebate
opportunities available at other venues to be more favorable. In such
an environment, the Exchange must continually adjust its fees to remain
competitive with other exchanges. Because competitors are free to
modify their own fees in response, and because market participants may
readily adjust their order routing practices, the Exchange believes
that the degree to which fee changes in this market may impose any
burden on competition is extremely limited.
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\35\ See supra notes 26 and 31.
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The Exchange believes that the proposed rule change reflects this
competitive environment because it modifies the Exchange's fees and
rebates in a manner designed to continue to incent participants on the
Trading Floor to direct trading interest to the Exchange, to provide
liquidity and to attract additional order flow. To the extent that
Floor Brokers are encouraged to utilize the Exchange as a primary
trading venue for Firm origin orders, all Exchange market participants
stand to benefit from the improved market quality and increased
opportunities for price improvement. For the reasons described above,
the Exchange believes that the proposed rule change reflects this
competitive environment.
Intra-Market Competition
In accordance with Section 6(b)(8) of the Act, the Exchange does
not believe that the proposed rule change would impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, as discussed above, the Exchange believes
that the proposed changes would encourage the submission of additional
Firm origin liquidity to a public exchange's Trading Floor, thereby
promoting market depth, price discovery and transparency and enhancing
order execution opportunities for all Floor Participants, especially as
the Trading Floor continues to ramp up operations since it launched in
September 2025. As a result, the Exchange believes that the proposed
changes further the Commission's goal in adopting Regulation NMS of
fostering integrated competition among orders.
The proposed changes are designed to attract additional Firm QFO,
cQFO, QCC and cQCC order flow to the Trading Floor. Greater liquidity
benefits all market participants on the Exchange and increased order
flow would increase opportunities for execution of other trading
interest. The proposed
[[Page 32145]]
changes would apply and be available to all similarly-situated market
participants that execute open outcry on the Trading Floor, and,
accordingly, the proposed changes would not impose a disparate burden
on competition among market participants on the Exchange. The Exchange
notes that other exchanges that operate a trading floor for equity
options trading also have monthly fee caps for certain origins while
excluding strategy transactions and electronic transactions from
counting towards their monthly fee caps.\36\
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\36\ See supra note 26.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\37\ and Rule 19b-4(f)(2) \38\ 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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\37\ 15 U.S.C. 78s(b)(3)(A)(ii).
\38\ 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#5725223b327a34383a3a323923241724323479303821"><span class="__cf_email__" data-cfemail="d0a2a5bcb5fdb3bfbdbdb5bea4a390a3b5b3feb7bfa6">[email protected]</span></a>. Please include
file number SR-SAPPHIRE-2026-25 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-2026-25. 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 will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal 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-2026-25 and
should be submitted on or before June 22, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
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\39\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-10668 Filed 5-28-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on May 29, 2026.
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.