Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Fees and Rebates for Professional Customer Orders for QCC and cQCC Transactions and Establish a Tiered Fee Structure for Away Market Maker Facilitation of Customer QFOs or cQFOs

Issuing agencies

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<title>Federal Register, Volume 91 Issue 210 (Monday, November 2, 2026)</title>
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[Federal Register Volume 91, Number 210 (Monday, November 2, 2026)]
[Notices]
[Pages 69008-69015]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22267]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106762; File No. SR-SAPPHIRE-2026-36]


Self-Regulatory Organizations; MIAX Sapphire, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Fees and Rebates for Professional Customer Orders for QCC and cQCC 
Transactions and Establish a Tiered Fee Structure for Away Market Maker 
Facilitation of Customer QFOs or cQFOs

October 28, 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 October 15, 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) reduce the initiating and 
contra-side fees applicable to Professional Customer orders for QCC and 
cQCC transactions on the Exchange's Electronic Book and Trading Floor; 
(2) reduce the rebates applicable to Professional Customer orders for 
QCC and cQCC transactions on the Exchange's Electronic Book and Trading 
Floor; and (3) establish a tiered fee structure applicable to Trading 
Floor transactions where a Member firm directs a paired order to the 
Trading Floor, the agency side of the paired order is a customer of the 
Member firm, and the contra-side origin of the paired order is an Away 
Market Maker of the same Member firm, depending on certain monthly 
breakup percentages and minimum sizes (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/miax-sapphire/rule-filings">https://www.miaxglobal.com/markets/us-options/miax-sapphire/rule-filings</a>, and at the Exchange'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.

[[Page 69009]]

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) reduce the 
initiating and contra-side fees applicable to Professional Customer \3\ 
orders for QCC \4\ and cQCC \5\ transactions on the Exchange's 
Electronic Book \6\ and Trading Floor; \7\ (2) reduce the rebates 
applicable to Professional Customer orders for QCC and cQCC 
transactions on the Exchange's Electronic Book and Trading Floor; and 
(3) establish a tiered fee structure applicable to Trading Floor 
transactions where a Member \8\ firm directs a paired QFO \9\ or cQFO 
\10\ to the Trading Floor, the agency side of the paired order is a 
customer of the Member firm, and the contra-side origin of the paired 
order is an Away Market Maker \11\ of the Member firm, depending on 
certain monthly breakup percentages and minimum sizes.
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    \3\ ``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. ``Public 
Customer'' means a person that is not a broker or dealer in 
securities. Id.
    \4\ 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, Sections 
1)a)ii) and 1)c)ii).
    \5\ 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)a)v) of the 
Fee Schedule for electronic transactions. The stock handling fee for 
the stock leg of cQCC transactions is described in Section 1)c)vi) 
of the Fee Schedule for Trading Floor transactions. See Fee 
Schedule, Sections 1)a)iii) and 1)c)iii).
    \6\ ``Electronic Book'' means the Exchange's Simple Order Book 
and Strategy Book. See the Definitions section of the Fee Schedule 
and Exchange Rule 100. The ``Simple Order Book'' is the Exchange's 
regular electronic book of orders and quotes. See Exchange Rule 100. 
The ``Strategy Book'' is the Exchange's electronic book of complex 
orders. Id.
    \7\ ``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.
    \8\ See Exchange Rule 100.
    \9\ ``Qualified Floor Order'' or ``QFO'' is a two-sided order 
with an initiating side and a contra-side. QFOs may also be complex 
orders as defined in Rule 518(a) (``cQFO'') with no more than the 
applicable number of legs as determined by the Exchange and 
communicated to Participants via Regulatory Circular. See the 
Definitions section of the Fee Schedule and Exchange Rule 2040.
    \10\ ``Complex Qualified Floor Order'' or ``cQFO'' has the 
meaning ascribed to such term in the Exchange Rules. See the 
Definitions section of the Fee Schedule and Exchange Rule 2040.
    \11\ ``Away Market Maker'' for the purposes of the Fee Schedule 
shall mean a non MIAX Sapphire Market Maker. See the Definitions 
section of the Fee Schedule.
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    The Exchange initially filed this proposal on July 31, 2026.\12\ On 
August 17, 2026, the Exchange withdrew SR-SAPPHIRE-2026-31 and refiled 
this proposed rule change.\13\ On October 15, 2026, the Exchange 
withdrew SR-SAPPHIRE-2026-34 and refiled this proposed rule change.
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    \12\ See Securities Exchange Act Release No. 106093 (August 12, 
2026), 91 FR 53311 (August 17, 2026) (SR-SAPPHIRE-2026-31).
    \13\ See Securities Exchange Act Release No. 106232 (August 28, 
2026), 91 FR 56518 (September 2, 2026) (SR-SAPPHIRE-2026-34).
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Proposal To Reduce Initiating and Contra-Side Fees for Professional 
Customer Orders for QCC and cQCC Transactions
    First, the Exchange proposes to amend Sections 1)a)ii)-iii) and 
1)c)ii)-iii) of the Fee Schedule to reduce the initiating and contra-
side fees applicable to Professional Customer orders for QCC and cQCC 
transactions on the Exchange's Electronic Book and Trading Floor. 
Currently, the Exchange assesses Professional Customers the same 
initiating and contra-side fee of $0.12 per contract side for QCC and 
cQCC transactions that occur either on the Exchange's Electronic Book 
or on the Trading Floor. The Exchange now proposes to reduce this fee 
such that the Exchange will assess Professional Customers the same 
initiating and contra-side fee of $0.00 per contract side for QCC and 
cQCC transactions that occur either on the Exchange's Electronic Book 
or on the Trading Floor. The purpose of these changes is for business 
and competitive reasons. The proposed changes will also align the 
Exchange's fee for such transactions with the similar fee structures in 
place at other exchanges for both electronic and trading floor QCC 
(and/or cQCC) transactions for professional customer orders.\14\
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    \14\ See, e.g., BOX Exchange LLC (``BOX'') Fee Schedule, Section 
IV.D. (assessing professional customers $0.00 per contract for both 
the agency side and contra-side of QCC transactions); Nasdaq PHLX 
LLC (``PHLX''), Options 7: Pricing Schedule, Section 4, QCC 
Transaction Fee (providing that customers and professionals are not 
assessed a QCC transaction fee and that the QCC transactions fees 
apply to both electronic and floor QCC orders).
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Proposal To Reduce Rebates Applicable to Professional Customer Orders 
for QCC and cQCC Transactions
    Next, the Exchange proposes to amend Sections 1)a)ii)-iii) of the 
Fee Schedule to reduce the rebates applicable to Professional Customer 
orders for QCC and cQCC transactions on the Exchange's Electronic Book. 
Currently, for EEMs \15\ entering Professional Customer orders for both 
QCC and cQCC electronic transactions, the Exchange provides EEMs the 
following rebates: ($0.07) per contract when the contra-side is a 
Priority Customer; \16\ ($0.17) per contract when the contra-side is a 
Professional Customer; and ($0.25) per contract when the contra-side is 
all other market participants (i.e., MIAX Sapphire Market Maker,\17\ 
Away Market Maker, Non-Member Broker-Dealer, and Firm). The Exchange 
now proposes to reduce these rebates. In particular, the Exchange 
proposes that for EEMs entering Professional Customer orders for both 
QCC and cQCC electronic transactions, the Exchange will provide EEMs 
the following rebates: ($0.00) per contract when the contra-side is a 
Priority Customer; ($0.00) per contract when the contra-side is a 
Professional Customer; and ($0.17) per contract when the contra-side is 
all other market participants (i.e., MIAX Sapphire Market Maker, Away 
Market Maker, Non-Member Broker-Dealer, and Firm).
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    \15\ ``Electronic Exchange Member'' or ``EEM'' means the holder 
of a Trading Permit who is a Member representing as agent Public 
Customer Orders or Non-Customer Orders on the Exchange and those 
non-Market Maker Members conducting proprietary trading. Electronic 
Exchange Members are deemed ``members'' under the Exchange Act. See 
the Definitions section of the Fee Schedule and Exchange Rule 100.
    \16\ ``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 accounts(s). The number of 
orders shall be counted in accordance with Interpretation and Policy 
.01 of Exchange Rule 100. See Exchange Rule 100, including 
Interpretation and Policy .01, and the Definitions section of the 
Fee Schedule.
    \17\ ``Market Maker'' means a Member registered with the 
Exchange for the purpose of making markets in options contracts 
traded on the Exchange and that is vested with the rights and 
responsibilities specified in Chapter VI of Exchange Rules. See the 
Definitions section of the Fee Schedule and Exchange Rule 100.
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    Next, the Exchange proposes to amend Sections 1)c)ii)-iii) of the 
Fee Schedule to reduce the rebates applicable to Professional Customer 
orders for QCC and cQCC transactions on the Exchange's Trading Floor. 
Currently, for Floor Brokers \18\ entering

[[Page 69010]]

Professional Customer orders for both QCC and cQCC transactions on the 
Trading Floor, the Exchange provides Floor Brokers the following 
rebates: ($0.07) per contract when the contra-side is a Priority 
Customer or where the Firm met the Firm Fee Cap; \19\ ($0.17) per 
contract when the contra-side is a Professional Customer; and ($0.25) 
per contract when the contra-side is all other market participants 
(i.e., Floor Market Maker, Away Market Maker, Broker-Dealer, and Firm), 
except for Firm origin orders where that Firm met the Firm Fee Cap. The 
Exchange now proposes to reduce these rebates. In particular, the 
Exchange proposes that for Floor Brokers entering Professional Customer 
orders for both QCC and cQCC transactions on the Trading Floor, the 
Exchange will provide Floor Brokers the following rebates: ($0.00) per 
contract when the contra-side is a Priority Customer or where the Firm 
met the Firm Fee Cap; ($0.00) per contract when the contra-side is a 
Professional Customer; and ($0.17) per contract when the contra-side is 
all other market participants (i.e., Floor Market Maker, Away Market 
Maker, Broker-Dealer, and Firm), except for Firm origin orders where 
that Firm met the Firm Fee Cap.
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    \18\ ``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. 
``Floor Participant'' means Floor Brokers as defined in Rule 2015 
and Floor Market Makers as defined in Rule 2105(b). See the 
Definitions section of the Fee Schedule and Exchange Rule 100.
    \19\ See Fee Schedule Section 1)c)vii) for a description of the 
Firm Fee Cap.
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    The purpose of these changes is for business and competitive 
reasons. The Exchange believes that even with the proposal to remove 
the rebate payable to an EEM (or Floor Broker) entering a Professional 
Customer order as part of a QCC or cQCC transaction (electronic or on 
the Trading Floor) where the contra-side is a Priority Customer or 
Professional Customer, the Exchange's QCC and cQCC rebates remain 
competitive with those of other exchanges for Professional Customer 
orders.\20\ The Exchange believes these changes will also align the 
Exchange's QCC and cQCC rebates with those of other exchanges for 
Professional Customer orders where the contra-side is a Priority 
Customer or Professional Customer.\21\
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    \20\ See, e.g., NYSE American LLC (``NYSE American'') Options 
Fee Schedule, Section I.F. (providing no fee or rebate for customer 
and professional customer orders where the contra-side is a customer 
or professional customer in a QCC transaction and providing a rebate 
of ($0.12) per contract where a floor broker executes a customer or 
professional customer order where the contra-side is a market maker, 
firm or broker dealer in a QCC transaction); NYSE Arca Inc. (``NYSE 
Arca'') Options Fees and Charges, page 7 (providing no fee or rebate 
for QCC transactions involving all customers and providing a rebate 
of ($0.16) per contract when a customer order trades against a non-
customer).
    \21\ Id.
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Proposal To Establish a Tiered Fee Structure for Away Market Makers 
Facilitation of Customer QFOs or cQFOs on the Trading Floor
    Next, the Exchange proposes to amend Section 1)c)i) of the Fee 
Schedule to establish a tiered fee structure applicable to Trading 
Floor transactions where a Member firm directs a paired QFO or cQFO to 
the Trading Floor, the agency side of the paired order is a customer of 
the Member firm, and the contra-side origin of the paired order is an 
Away Market Maker of the Member firm, depending on certain monthly 
breakup percentages and minimum sizes.
    For background, the Exchange assesses fees and applies rebates to 
both executed sides of the paired QFO or cQFO on the Trading Floor. 
cQFO fees and rebates are per executed side per leg. Floor Broker 
rebates are only payable on the Floor Brokers' billable sides. The 
rebates do not apply to Priority Customer, Professional Customer, Firm/
Broker-Dealer Facilitating a Priority Customer or Professional 
Customer, competing Floor Broker orders, Floor Market Maker (sides) 
executions, and Firm (sides) executions where the Firm Fee Cap 
threshold has been met for the relevant Clearing Corporation \22\ 
account in the relevant month. Fees for Floor Market Maker volume 
executed via a Floor Broker are assessed to the Floor Market Maker. 
Fees and rebates for Floor Broker volume, other than the executing 
Floor Broker's own orders, entered on behalf of a competing Floor 
Broker, are assessed to the competing Floor Broker.
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    \22\ The term ``Clearing Corporation'' means The Options 
Clearing Corporation. See Exchange Rule 100.
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    Currently, 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, 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 now proposes to establish a new row in the table in 
Section 1)c)i) of the Fee Schedule that will apply to transactions for 
Away Market Maker facilitation of customer orders for the same Member 
firm. The Exchange proposes to specify in third explanatory paragraph 
below the table of fees in Section 1)c)i) of the Fee Schedule that the 
rates for Away Market Maker Facilitation will apply to any Trading 
Floor transaction where a Member firm directs a paired order to the 
Trading Floor, where the agency order is a customer of the Member firm, 
and where the contra-side of the transaction is the Away Market Maker 
of the Member firm. Further, the Away Market Maker firm must notify the 
Exchange for participation in the Away Market Maker Facilitation 
program.
    The Exchange proposes to establish a new table at the end of the 
explanatory text in Section 1)c)i) of the Fee Schedule, which will be 
titled ``Away Market Maker Facilitation Breakup Table'' (referred to 
herein as the ``Breakup Table''). The Breakup Table \23\ will provide 
the proposed tiered reduced fees (instead of the $0.25 per contract fee 
that would otherwise apply to an Away Market Maker Floor transaction) 
for transactions where a Member firm directs a paired QFO or cQFO to 
the Trading Floor, the agency order is a customer of the Member firm, 
and the contra-side of the transaction is the Away Market Maker of the 
Member firm, depending on the following breakup percentages: 0 to 5% 
breakup will be assessed a per contract fee of $0.10; greater than 5% 
to 15% breakup will be assessed a per contract fee of $0.09; greater 
than 15% to 25% breakup will be assessed a per contract fee of $0.08; 
greater than 25% to 35% breakup will be assessed a per contract fee of 
$0.07; greater than 35% to 40% breakup will be assessed a per contract 
fee of

[[Page 69011]]

$0.06; and greater than 40% breakup will be assessed a per contract fee 
of $0.05.
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    \23\ A breakup of a QFO or cQFO generally refers to the scenario 
where a paired order is interacted with by a Floor Market Maker. 
Similarly, using the Away Market Maker facilitation as example, a 
breakup of a QFO or cQFO refers to the scenario where a paired 
customer order is facilitated for execution on the Trading Floor 
with the Away Market Maker being the contra-side of the transaction 
and having the order interacted with by a Floor Market Maker. For 
purposes of determining the breakup percentage for the Away Market 
Maker facilitation, the Exchange proposes to aggregate each month 
all QFOs with at least 1,000 initiating sides per order, and all 
cQFOs where the smallest leg is at least 1,000 contracts per order. 
The Exchange proposes to exclude from the breakup percentage 
calculation non-eligible QFOs with less than 1,000 initiating sides 
per order and non-eligible cQFOs where the smallest leg is less than 
1,000 contracts per order.
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    The Exchange also proposes to add the new note ``*'' to the Breakup 
Table and the corresponding note below table, which will provide as 
follows:

    * These rates only apply to QFO or cQFO orders that are not part 
of a QCC, cQCC or Strategy transaction. For QFO volume to count 
towards the calculation to qualify for these rates, the Away Market 
Maker must facilitate at least 1,000 initiating sides per order. For 
cQFO volume to count towards the calculation to qualify for these 
rates, the smallest leg must be at least 1,000 initiating sides per 
order. The order breakup percentage is calculated on a monthly 
basis.

    The Exchange also proposes to amend the second sentence in the 
first paragraph of explanatory text below the tables in Section 1)c)i) 
of the Fee Schedule to specify that Floor Brokers will not be entitled 
to receive rebates from Away Market Maker Facilitation transactions.
    This reduced fee structure is similar in concept to another program 
offered by the Exchange, where the Exchange assesses a lower fee for a 
Firm or Broker-Dealer that facilitates a Priority Customer or 
Professional Customer QFO or cQFO (in that case, $0.00 per contract), 
and subsequently does not provide a rebate to the executing Floor 
Broker.\24\ In that scenario, similar to the proposed Away Market Maker 
facilitation, a Firm or Broker-Dealer directs a paired order to the 
Trading Floor, where the agency side is an order for a Priority 
Customer or Professional Customer of that Firm or Broker-Dealer and the 
contra-side of the transaction involves the Firm or Broker-Dealer.\25\
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    \24\ See Fee Schedule, Section 1)c)i).
    \25\ See id. (providing, additionally, that for the Broker-
Dealer facilitation, the Broker-Dealer and the Priority Customer or 
Professional Customer both clear through the same clearing firm and 
the Broker-Dealer clears in the customer range).
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    The purpose of these changes is for business and competitive 
reasons. The proposed Breakup Table provides the lower tiered fees that 
the Away Market Maker may be assessed instead of the fee that would 
otherwise apply to such Floor transactions, i.e., $0.25 per contract. 
The Exchange believes that the proposed changes may encourage Members 
to aggregate liquidity to send paired customer orders to the Trading 
Floor where the contra-side of the paired order is an affiliate Away 
Market Maker of the Member and the QFO or cQFO, as applicable, has met 
the proposed minimum size requirements (i.e., for QFOs, at least 1,000 
initiating sides per order and for cQFOs, the smallest leg is at least 
1,000 initiating sides per order). The Exchange believes that this may, 
in turn, increase open outcry participation due to larger size QFOs and 
cQFOs being brought to the Trading Floor via the Away Market Maker 
facilitation size requirements, which may promote increased executions 
on the Trading Floor to the benefit of all Floor Participants that can 
interact with the larger sized orders.
    Market participants sending paired orders with agency and contra-
sides to an exchange via an auction/solicitation mechanism or to a 
broker to execute on a physical trading floor is not a new or novel 
concept. Further, the paired order may typically originate from 
affiliates of the same member firm. Additionally, the concept of the 
paired order (or orders) being broken up by different market 
participants and causing the fees assessed (or rebates provided) for 
the agency and contra-sides to change is not new or novel. The Exchange 
believes its proposal is within the bounds of these concepts--for an 
Away Market Maker Facilitation to apply such that the Away Market Maker 
receives reduced contra-side fees, the Member firm must direct a paired 
order to the Trading Floor, the agency side of the paired order must be 
a customer of the Member firm (i.e., affiliated), and the contra-side 
of the transaction must be an Away Market Maker of the same Member 
firm. So long as those parameters are met and the minimum size 
requirements are achieved, the fees assessed to the Away Market Maker's 
contra-side orders will be reduced according to the monthly breakup 
percentages in the proposed Breakup Table.
    In keeping with the above concepts, the Exchange's proposal 
contemplates a Member submitting a paired order to the Exchange's 
Trading Floor with agency and contra-sides, where the agency side of 
the paired order is a customer of the Member firm, and the contra-side 
origin of the paired order is an Away Market Maker of the Member firm 
(i.e., affiliated to the customer side of the order). The Exchange 
believes the auction mechanisms (PRIME \26\ and cPRIME \27\) in place 
at the Exchange's affiliate, MIAX,\28\ likewise provide for a member 
firm to submit a paired order to MIAX, where the agency side and 
contra-side of the transaction are affiliates of the EEM \29\ 
submitting the order into the auction. The Exchange's proposal then 
provides for the possibility of reduced contra-side fees based on a 
breakup percentage of the paired orders that meet the requirements for 
an Away Market Maker facilitation. MIAX's PRIME and cPRIME auctions 
provide the possibility for EEMs' paired orders to receive altered fees 
assessed (or rebates provided) to such orders and provide the 
opportunity for a member to earn higher agency rebates and/or breakup 
rebates instead of the rates that would otherwise apply for non-paired 
orders. In the same nature for the Trading Floor, the Exchange believes 
that the Away Market Maker sending a paired and facilitated order to be 
able to earn discounted fees based on an order (or orders) being broken 
up are not conceptually different.
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    \26\ See, generally, MIAX Rule 515A.
    \27\ See, generally, MIAX Rule 515A, and Interpretation and 
Policy .12 for a description of the cPRIME auction process.
    \28\ ``MIAX'' means Miami International Securities Exchange, 
LLC. See the Definitions section of the Fee Schedule and Exchange 
Rule 100.
    \29\ See MIAX Rule 100.
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    The Exchange also believes that the Breakup Table is similar in 
concept to a table that is currently in place at MIAX, related to 
agency credits provided to Priority Customer orders entered into MIAX's 
cPRIME auction. The Exchange notes that there are differences between 
the proposed Breakup Table and the auction mechanisms discussed above 
for PRIME and cPRIME on MIAX. Whereas the proposed Breakup Table 
provides the opportunity for Away Market Makers to earn discounted fees 
for facilitating customer orders on the MIAX Sapphire Trading Floor 
based on the monthly percentage breakup of the order that meets the 
minimum size requirements, MIAX provides its members the opportunity to 
receive increasing tiered agency credits for cPRIME Agency Orders for 
Priority Customers dependent upon the breakup percentage of the order, 
with certain exceptions.\30\ Another difference is that the Exchange's 
proposal contemplates calculating the breakup percentage on a monthly 
basis for all qualifying orders, PRIME and cPRIME calculate the reduced 
agency fees or increased breakup credits on an order-by-order basis for 
orders qualifying for PRIME and cPRIME.
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    \30\ See MIAX Fee Schedule, Section 1)a)iii), cPRIME Agency 
Order Break-up Table.
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    The concept of the proposed Breakup Table to show the applicable 
fees based on an order (or orders) being broken up is also for clarity 
purposes. Fees based on order breakup percentage in a table format is 
similar in concept to ones used by MIAX for PRIME and cPRIME auctions 
where, in those instances, the agency rebates are dependent on the 
order breakup, and also similar to the automated improvement mechanism

[[Page 69012]]

(``AIM'') \31\ offered by Cboe EDGX Exchange, Inc. (``EDGX''), where 
the fees are dependent on the order interaction rate.\32\
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    \31\ See EDGX Rule 21.19.
    \32\ See, generally, EDGX Options Fee Schedule, AIM and SAM 
Pricing sections.
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    In addition, the Exchange offers a similar fee program for Firms 
and Broker-Dealers that facilitate certain customer orders. In 
particular, the Exchange offers Firms and Broker-Dealers the 
opportunity to not be assessed a fee when a Firm or Broker-Dealer 
facilitates a Priority Customer or Professional Customer QFO or cQFO on 
the Trading Floor.\33\
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    \33\ See Fee Schedule, Section (1)(c)9i).
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    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,\34\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\35\ 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 \36\ 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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    \34\ 15 U.S.C. 78f(b).
    \35\ 15 U.S.C. 78f(b)(5).
    \36\ 15 U.S.C. 78f(b)(4).
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    The Commission has repeatedly expressed its preference for 
competition over regulatory intervention in determining prices, 
products, and services in the securities markets. In Regulation NMS, 
the Commission highlighted the importance of market forces in 
determining prices and SRO revenues and, also, recognized that current 
regulation of the market system ``has been remarkably successful in 
promoting market competition in its broader forms that are most 
important to investors and listed companies.'' \37\
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    \37\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005).
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    There are currently 18 registered options exchanges competing for 
order flow. Based on publicly-available information, and excluding 
index-based and singly-listed options, no single exchange had more than 
approximately 11-12% of the multiply-listed equity options market share 
for the month of July 2026.\38\ Therefore, no exchange possesses 
significant pricing power. More specifically, the Exchange had a market 
share of approximately 3.79% of executed volume of multiply-listed 
equity options for the month of July 2026.\39\
---------------------------------------------------------------------------

    \38\ See the ``Market Share'' section of the Exchange's website, 
available at <a href="https://www.miaxglobal.com/">https://www.miaxglobal.com/</a> (last visited August 12, 
2026).
    \39\ See id.
---------------------------------------------------------------------------

Proposal To Reduce Initiating and Contra-Side Fees for Professional 
Customer Orders for QCC and cQCC Transactions
    The Exchange believes its proposal to reduce the initiating and 
contra-side fees applicable to Professional Customer orders for QCC and 
cQCC transactions on the Exchange's Electronic Book and Trading Floor 
is reasonable, equitable and not unfairly discriminatory because it may 
further incentivize Professional Customer orders to be submitted as QCC 
and cQCC transactions. The Exchange believes that this may, in turn, 
encourage Members to submit more Professional Customer orders, leading 
to increased liquidity on the Exchange to the benefit of all market 
participants by providing more trading opportunities and tighter 
spreads. The Exchange believes the proposed changes are equitable and 
not unfairly discriminatory because the reduced fees will apply equally 
to all market participants who provide Professional Customer orders as 
part of QCC and cQCC transactions either electronically or via the 
Exchange's Trading Floor. The Exchange also believes the proposed 
changes are reasonable because the changes will align the Exchange's 
fee for such transactions with the similar fee structures in place at 
other exchanges for both electronic and trading floor QCC (and/or cQCC) 
transactions for professional customer orders.\40\
---------------------------------------------------------------------------

    \40\ See supra note 14.
---------------------------------------------------------------------------

Proposal To Reduce Rebates Applicable to Professional Customer Orders 
for QCC and cQCC Transactions
    The Exchange believes its proposal to reduce the rebates applicable 
to Professional Customer orders for QCC and cQCC transactions on the 
Exchange's Electronic Book and Trading Floor is reasonable, equitable 
and not unfairly discriminatory because the changes are for business 
and competitive reasons. The Exchange believes that even with the 
proposal to remove the rebate payable to an EEM (or Floor Broker) 
entering a Professional Customer order as part of a QCC or cQCC 
transaction (electronic or on the Trading Floor) where the contra-side 
is a Priority Customer or Professional Customer, the Exchange's QCC and 
cQCC rebates remain competitive with those of other exchanges.\41\ The 
Exchange believes these changes are reasonable because they will align 
the Exchange's QCC and cQCC rebates with those of other exchanges for 
Professional Customer orders where the contra-side is a Priority 
Customer or Professional Customer.
---------------------------------------------------------------------------

    \41\ See supra note 20.
---------------------------------------------------------------------------

Proposal To Establish a Tiered Fee Structure for Trading Floor 
Transactions for Away Market Makers Facilitation of Customer Orders
    The Exchange believes its proposal to establish a tiered fee 
structure where a Member firm directs a paired QFO or cQFO to the 
Trading Floor, the agency order is a customer of the Member firm, and 
the contra-side of the transaction is the Away Market Maker of the 
Member firm, depending on certain breakup percentages and minimum sizes 
is reasonable, equitable and not unfairly discriminatory because these 
changes are for business and competitive reasons. The Exchange believes 
that the proposed changes may encourage Members to submit more customer 
orders to the Trading Floor where the contra-side is the Away Market 
Maker of the Member firm in order to be assessed the lower tiered fees 
than would otherwise apply to such transactions. The Exchange believes 
that this may, in turn, increase open outcry participation, which may 
promote increased executions on the Trading Floor to the benefit of all 
Floor Participants.
    The Exchange believes the proposal to establish a tiered fee 
structure where a Member firm directs a paired QFO or cQFO to the 
Trading Floor, the agency side of the order is a customer of the Member 
firm, and the contra-side of the transaction is the Away Market Maker 
of the Member firm, depending on certain breakup percentages and 
minimum sizes is equitably allocated and not unfairly discriminatory. 
The proposed reduced contra-side fees are not automatically applied to 
all Away Market Maker transactions on the Trading Floor. In order to 
achieve the reduced contra-side fees, the Member submitting an order 
for an Away Market Maker Facilitation must satisfy several criteria. 
First, the Member must submit a paired QFO or cQFO for execution on the 
Trading Floor. The agency side of the paired order must be a customer 
of the Member and the contra-side of the transaction must be an Away 
Market Maker affiliated with that same Member firm. The final criteria 
are the size requirements--an Away Market Maker must facilitate at 
least 1,000 initiating sides per order for QFO volume or have the 
smallest leg of the order be at least 1,000 initiating sides per cQFO 
volume

[[Page 69013]]

to count towards the monthly breakup percentage for reduced contra-side 
fees.
    The Exchange believes this proposal is not unfairly discriminatory 
because it may incentivize QFO and cQFO volume. As discussed above, 
Members must submit orders with minimum size requirements (i.e., for 
QFOs, at least 1,000 initiating sides per order and for cQFOs, the 
smallest leg is at least 1,000 initiating sides per order), among other 
requirements, in order to have those orders counted towards the monthly 
breakup percentage and corresponding reduced contra-side fees. The 
Exchange believes that the set minimum size requirement contemplates 
Members submitting larger sized paired orders which may, in turn, 
increase open outcry participation to interact with that order flow. A 
higher rate of interactions should promote increased executions on the 
Trading Floor to the benefit of all Floor Participants by providing 
more trading opportunities and tighter spreads. To the extent QFO and 
cQFO volume increases by the proposal, market participants may 
increasingly compete for the opportunity to trade on the Trading Floor 
by responding to such larger sized orders. Accordingly, the Exchange 
believes it is equitable and not unfairly discriminatory to offer Away 
Market Makers the reduced contra-side fees contained in the proposed 
Breakup Table.
    The concept of charging different fees based on origin for paired 
orders, like in auctions or facilitations as on the Trading Floor, is 
not new or novel. In particular, the contra fees assessed by EDGX to 
members who submit paired orders into the EDGX AIM (and SAM \42\) 
mechanisms vary based on the contra origin.\43\ Further, EDGX members 
submitting paired orders in the EDGX AIM mechanism can receive better 
economics for the trade based on order interaction percentages, just 
like the Exchange proposes for Away Market Maker facilitations where 
orders are broken up based on a monthly percentage.
---------------------------------------------------------------------------

    \42\ See EDGX Rule 21.21.
    \43\ See EDGX Options Fee Schedule, AIM and SAM Pricing section 
(assessing contra fees ranging from free to $0.18 per contract based 
on origin).
---------------------------------------------------------------------------

    The Exchange believes this proposal is equitably allocated and not 
unfairly discriminatory because it is open to all Members that submit 
paired QFOs or cQFOs where the contra-side is an Away Market Maker of 
that Member firm, so long as the minimum size threshold is met. The 
Exchange believes the proposal to offer tiered reduced fees applicable 
to qualifying Away Market Maker transactions is equitable and not 
unfairly discriminatory because all Away Market Makers are eligible for 
the reduced fees each month so long as they facilitate qualifying 
customer QFO or cQFO volume to the Floor and take the contra-side of 
the transaction.
    The Exchange believes this proposed change is reasonable because it 
is based on similar concepts regarding paired orders being facilitated 
or submitted for execution that are already in place at the Exchange, 
its affiliate MIAX, as well as other equity options exchanges. The 
Exchange's proposal contemplates a Member submitting a paired order to 
the Exchange's Trading Floor with agency and contra-sides, where the 
agency side of the paired order is a customer of the Member firm, and 
the contra-side origin of the paired order is an Away Market Maker of 
the Member firm (i.e., affiliated to the customer side of the order). 
The Exchange believes the auction mechanisms (PRIME and cPRIME) in 
place at the Exchange's affiliate, MIAX, likewise provide for a member 
firm to submit a paired order to MIAX, where the agency side and 
contra-side of the transaction are affiliates of the EEM submitting the 
order into the auction. The Exchange's proposal then provides for the 
possibility of reduced contra-side fees based on a breakup percentage 
of the paired orders that meet the requirements for an Away Market 
Maker facilitation. MIAX's PRIME and cPRIME auctions provide the 
possibility for EEMs' paired orders to receive altered fees assessed 
(or rebates provided) to such orders and provide the opportunity for a 
member to earn higher agency rebates and/or breakup rebates instead of 
the rates that would otherwise apply for non-paired orders. In the same 
nature for the Trading Floor, the Exchange believes that the Away 
Market Maker sending a paired and facilitated order to be able to earn 
discounted fees based on an order (or orders) being broken up are not 
conceptually different.
    In addition, the Exchange believes that the proposal, which applies 
only to Away Market Makers facilitating eligible customer trades of 
certain sizes 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.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule changes will not 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.
Inter-Market Competition
    The proposed changes do not impose an undue burden on inter-market 
competition. The Exchange believes the proposed changes to reduce the 
fees and rebates applicable to initiating and contra-side Professional 
Customer orders entered as part of a QCC or cQCC transaction do not 
impose any burden on inter-market competition because other exchanges 
have similar fee structures for similar transactions.\44\ The Exchange 
believes the proposed changes to establish a tiered fee structure where 
a Member firm directs a paired QFO or cQFO to the Trading Floor, the 
agency order is a customer of the Member firm, and the contra-side of 
the transaction is the Away Market Maker of the Member firm, depending 
on certain breakup percentages and minimum sizes does not impose any 
burden on inter-market competition because other exchanges that offer 
trading floors can offer similar incentives to their market 
participants.
---------------------------------------------------------------------------

    \44\ See supra notes 14 and 20.
---------------------------------------------------------------------------

    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.
    The Exchange believes that the proposed changes reflect this 
competitive environment because the changes modify the Exchange's fees 
and rebates in a manner designed to continue to incent participants to 
direct trading interest to the Exchange (both electronically and on the 
Trading Floor), to provide liquidity and to attract additional order 
flow. To the extent that Away Market Makers are encouraged to 
facilitate more Priority Customer and Professional Customer QFOs and

[[Page 69014]]

cQFOs, 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 
QCC and cQCC liquidity from Professional Customers (both electronically 
and on the Trading Floor), thereby promoting market depth, price 
discovery and transparency and enhancing order execution opportunities 
for all market participants. 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 change to establish a tiered fee structure where a 
Member firm directs a paired QFO or cQFO to the Trading Floor, the 
agency order is a customer of the Member firm, and the contra-side of 
the transaction is the Away Market Maker of the Member firm, depending 
on certain breakup percentages and minimum sizes is designed to attract 
additional customer 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 Exchange believes the proposal to offer tiered reduced fees 
applicable to qualifying Away Market Maker transactions does not impose 
any burden on intra-market competition because all Away Market Makers 
are eligible for the reduced fees each month so long as they facilitate 
qualifying customer QFO or cQFO volume to the Floor and take the 
contra-side of the transaction.
    The Exchange believes this proposed change does not place any 
burden on intra-market competition that is not necessary or appropriate 
in furtherance of the purposes of the Act because it is based on 
similar concepts regarding paired orders being facilitated or submitted 
for execution that are already in place at the Exchange, its affiliate 
MIAX, as well as other equity options exchanges. The Exchange's 
proposal contemplates a Member submitting a paired order to the 
Exchange's Trading Floor with agency and contra-sides, where the agency 
side of the paired order is a customer of the Member firm, and the 
contra-side origin of the paired order is an Away Market Maker of the 
Member firm (i.e., affiliated to the customer side of the order). The 
Exchange believes the auction mechanisms (PRIME and cPRIME) in place at 
the Exchange's affiliate, MIAX, likewise provide for a member firm to 
submit a paired order to MIAX, where the agency side and contra-side of 
the transaction are affiliates of the EEM submitting the order into the 
auction. The Exchange's proposal then provides for the possibility of 
reduced contra-side fees based on a breakup percentage of the paired 
orders that meet the requirements for an Away Market Maker 
facilitation. MIAX's PRIME and cPRIME auctions provide the possibility 
for EEMs' paired orders to receive altered fees assessed (or rebates 
provided) to such orders and provide the opportunity for a member to 
earn higher agency rebates and/or breakup rebates instead of the rates 
that would otherwise apply for non-paired orders. In the same nature 
for the Trading Floor, the Exchange believes that the Away Market Maker 
sending a paired and facilitated order to be able to earn discounted 
fees based on an order (or orders) being broken up are not conceptually 
different. In addition, the Exchange believes that the proposal, which 
applies only to Away Market Makers facilitating customer trades of 
certain sizes executed on the Trading Floor, may enhance competition by 
attracting 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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or 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,\45\ and Rule 19b-4(f)(2) \46\ thereunder. 
At any time within 60 days of the filing of such proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \46\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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#7b090e171e56181416161e150f083b081e18551c140d"><span class="__cf_email__" data-cfemail="8af8ffe6efa7e9e5e7e7efe4fef9caf9efe9a4ede5fc">[email&#160;protected]</span></a>. Please include 
file number SR-SAPPHIRE-2026-36 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-2026-36. 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-2026-36 and 
should be submitted on or before November 23, 2026.


[[Page 69015]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\47\
---------------------------------------------------------------------------

    \47\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-22267 Filed 10-30-26; 8:45 am]
BILLING CODE 8011-01-P


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