[Federal Register Volume 85, Number 32 (Tuesday, February 18, 2020)]
[Notices]
[Pages 8976-8978]
[FR Doc No: 2020-03088]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88158; File No. SR-CFE-2020-001]

Self-Regulatory Organizations; Cboe Futures Exchange, LLC; Notice
of Filing of a Proposed Rule Change Regarding Quoting Functionality

February 11, 2020.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on January 29, 2020 Cboe
Futures Exchange, LLC (``CFE'' or ``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change described in Items I, II, and III below, which Items have been
prepared by CFE. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons. CFE also
has filed this proposed rule change with the Commodity Futures Trading
Commission (``CFTC''). CFE filed a written certification with the CFTC
under Section 5c(c) of the Commodity Exchange Act (``CEA'') \2\ on
January 29, 2020.
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    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 7 U.S.C. 7a-2(c).
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I. Self-Regulatory Organization's Description of the Proposed Rule
Change

    The Exchange proposes to specify the information that is required
to be included within a Bulk Message and within a Quote in connection
with the implementation of quoting functionality on CFE's trading
system (``CFE System'').
    The scope of this filing is limited solely to the application of
the rule amendments to security futures that may be traded on CFE.
Although no security futures are currently listed for trading on CFE,
CFE may list security futures for trading in the future.
    CFE is making the rule amendments included in this proposed rule
change in conjunction with other rule amendments being made by CFE in
connection with its implementation of quoting functionality that are
not required to be submitted to the Commission pursuant to Section
19(b)(7) of the Act \3\ and thus are not included as part of this rule
change.
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    \3\ 15 U.S.C. 78s(b)(7).
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    The rule amendments included as part of this proposed rule change
are to apply to all products traded on CFE, including both non-security
futures and any security futures that may be listed for trading on CFE.
CFE is submitting these rule amendments to the Commission under Section
19(b)(7) of the Act \4\ because they relate to reporting requirements
that would apply with respect to any security futures that may be
traded on CFE.
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    \4\ 15 U.S.C. 78s(b)(7).
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    The text of the proposed rule change is attached as Exhibit 4 to
the filing but is not attached to the publication of this notice.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, CFE 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. CFE 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
    CFE Trading Privilege Holders (``TPHs'') currently utilize match
capacity allocations to submit Orders to the CFE System. These match
capacity allocations may be used for the submission of single Orders to
the CFE System utilizing either the Financial Information Exchange
(``FIX'') or Binary Order Entry (``BOE'') protocol. A single Order
refers to an Order that is submitted to the CFE System through a
message type that may include one Order in each message. Going forward,
these match capacity allocations will be referred to as order match
capacity allocations.
    In connection with the implementation of quoting functionality on
the CFE System, CFE will provide all TPHs with the option to use order
match capacity allocations and/or quoting match capacity allocations. A
quoting match capacity allocation is an additional type of match
capacity allocation that will provide the ability to submit single
Orders and Bulk Messages to the CFE System utilizing the BOE protocol.
A Bulk Message is a new message type that may be utilized to submit
multiple Quotes to the CFE System in a single message. A Quote refers
to the entry, modification, or cancellation of a bid or offer for a CFE
Contract through a Bulk Message. A Quote will be treated the same as an
Order, and the term ``Order'' encompasses a Quote, unless the Exchange
rules specify otherwise.
    CFE Rule 403 (Order Entry and Maintenance of Front-End Audit Trail
Information) currently requires that Orders contain specified
information and that Orders that do not contain this information are
rejected or canceled back to the sender. CFE is proposing to modify
Rule 403 to provide that these existing provisions apply to single
Orders, to set forth the information that is required to be included
within a Bulk Message and within a Quote, and to provide that Bulk
Messages and Quotes that do not contain the required information will
be rejected or canceled back to the sender.
    Specifically, CFE is proposing to amend Rule 403 in the following
ways:
    Rule 403(a) currently provides, in pertinent part, that each Order
must contain the following information: (i) Whether such Order is a buy
or sell Order; (ii) Order type; (iii) price or premium (if the Order is
not a Market Order); (iv) quantity; (v) Contract

identifier or product and contract expiration(s); (vi) Client Order ID;
(vii) Executing Firm ID (``EFID''); (viii) Order Entry Operator ID;
(ix) Clearing Corporation origin code (C for Customer or F for Firm);
(x) Customer Type Indicator code; (xi) manual Order indicator; (xii)
account designation (which is the account number of the account of the
party for which the Order was placed, except that a different account
designation may be included in the case of a bunched Order or in the
case of an Order for which there will be a post-trade allocation of the
resulting trade(s) to a different clearing member); (xiii) in the case
of Orders for Options, either Contract identifier or each of strike
price, type of option (put or call) and expiration; and (xiv) such
additional information as may be prescribed from time to time by the
Exchange. CFE is proposing to move the above provisions from current
Rule 403(a) to new Rule 403(b) and to provide in new Rule 403(b) that
the above provisions will apply to single Orders.
    CFE is proposing to add new Rule 403(c) to provide that each Bulk
Message must contain the following information: (i) Quote Update ID;
(ii) EFID; (iii) Order Entry Operator ID; (iv) Clearing Corporation
origin code (C for Customer or F for Firm); (iv) Customer Type
Indicator code; (v) manual Order indicator; (vi) account designation
(which shall be the account number of the account of the party for
which the Quotes in the Bulk Message were placed, except that a
different account designation may be included in the case of a Quote
that is a bunched Order or in the case of a Quote for which there will
be a post-trade allocation of the resulting trade(s) to a different
clearing member); (vii) at least one Quote; and (vii) such additional
information as may be prescribed from time to time by the Exchange.
    CFE is proposing to add new Rule 403(d) to provide that each Quote
must contain the following information: (i) Whether the Quote is to buy
or sell; (ii) price or premium; (iii) quantity; (iv) Contract
identifier; and (v) such additional information as may be prescribed
from time to time by the Exchange.
    Rule 403(a) currently provides that any Order that does not contain
required information in a form and manner prescribed by the Exchange
will be rejected or canceled back to the sender by the CFE System. CFE
is proposing to delete that provision from Rule 403(a) and to add an
equivalent provision to new Rule 403(e) that will apply to single
Orders, Bulk Messages, and Quotes. Specifically, CFE proposes that new
Rule 403(e) provide that any single Order, Bulk Message, or Quote that
does not contain required information in a form and manner prescribed
by the Exchange will be rejected or canceled back to the sender by the
CFE System.
    Finally, CFE is proposing to change the paragraph lettering of
current Rule 403(b) to Rule 403(f) and to change the paragraph
lettering of current Rule 403(c) to Rule 403(g) without changing the
text of either provision.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Sections 6(b)(1) \6\ and 6(b)(5) \7\ in particular in
that it is designed:
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(1).
    \7\ 15 U.S.C. 78f(b)(5).
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     To enable the Exchange to enforce compliance by its TPHs
and persons associated with its TPHs with the provisions of the rules
of the Exchange,
     to prevent fraudulent and manipulative acts and practices,
     to promote just and equitable principles of trade,
     to foster cooperation and coordination with persons
engaged in facilitating transactions in securities,
     to remove impediments to and perfect the mechanism of a
free and open market and a national market system,
     and in general, to protect investors and the public
interest.
    The Exchange believes that the proposed rule change serves to
enhance CFE's market by contributing to CFE's ability to implement
quoting functionality by requiring the provision of information that
the CFE System needs in order to process Bulk Messages and Quotes
submitted through that quoting functionality.
    The Exchange also believes that the proposed rule change serves to
strengthen CFE's ability to carry out its responsibilities as a self-
regulatory organization. First, the proposed rule change provides
guidance to TPHs regarding the type of information that must be
included within Bulk Messages and Quotes. Second, the proposed rule
change contributes to enhancing the effectiveness of CFE's audit trail
program by helping to assure that required information is included
within Bulk Messages and Quotes. Third, the proposed rule change
furthers CFE's ability to enforce compliance with CFE rules since the
Exchange plans to utilize this audit trail information in connection
with its surveillance of CFE's market and in connection with reviewing
trading activity on CFE's market for rule compliance.

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

    CFE does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act, in that the proposed rule change will enhance
CFE's ability to carry out its responsibilities as a self-regulatory
organization. The Exchange believes that the proposed rule change is
equitable and not unfairly discriminatory in that the rule amendments
included in the proposed rule change would apply equally to all TPHs.

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

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The proposed rule change will become operative on February 12,
2020. At any time within 60 days of the date of effectiveness of the
proposed rule change, the Commission, after consultation with the CFTC,
may summarily abrogate the proposed rule change and require that the
proposed rule change be refiled in accordance with the provisions of
Section 19(b)(1) of the Act.\8\
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    \8\ 15 U.S.C. 78s(b)(1).
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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

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CFE-2020-001 on the subject line.

Paper Comments

     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-CFE-2020-001. 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 (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CFE-2020-001, and should be submitted on
or before March 10, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(73).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-03088 Filed 2-14-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 172 (Wednesday, September 5, 2018)]
[Notices]
[Pages 45126-45127]
[FR Doc No: 2018-19254]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2004-0082; FRL-9983-36-OAR]

Proposed Information Collection Request; Renewal; EPA's Natural
Gas STAR Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Environmental Protection Agency (EPA) is planning to
submit a renewal information collection request (ICR), ``EPA's Natural
Gas STAR Program'' (EPA-HQ-OAR-2004-0082, OMB Control No. 2060-0328) to
the Office of Management and Budget (OMB) for review and approval in
accordance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
Before doing so, EPA is soliciting public comments on specific aspects
of the proposed information collection as described below.
Specifically, EPA is proposing to replace the current Program's
Memorandum of Understanding (MOU) with a Partnership Agreement (PA),
update the calculations used to estimate methane reductions, and create
a vendor service provider directory. This is a renewal with
modification of the existing ICR which expires on March 31, 2019. An
Agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a currently
valid OMB control number.

DATES: Comments must be submitted on or before November 5, 2018.

ADDRESSES: Submit your comments, referencing Docket ID No. EPA-HQ-OAR-
2004-0082 online using www.regulations.gov (our preferred method), by
email to [email protected], or by mail to: EPA Docket Center,
Environmental Protection Agency, Mail Code 28221T, 1200 Pennsylvania
Ave. NW, Washington, DC 20460.
    EPA's policy is that all comments received will be included in the
public docket without change including any personal information
provided, unless the comment includes profanity, threats, information
claimed to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute.

FOR FURTHER INFORMATION CONTACT: Jerome Blackman, Office of Atmospheric
Programs, Climate Change Division, (6207A), Environmental Protection
Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone
number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; email address:
[email protected].

SUPPLEMENTARY INFORMATION: Supporting documents which explain in detail
the information that the EPA will be collecting are available in the
public docket for this ICR. The docket can be viewed online at
www.regulations.gov or in person at the EPA Docket Center, WJC West,
Room 3334, 1301 Constitution Ave. NW, Washington, DC. The telephone
number for the Docket Center is<PHONE_NUMBER>. For additional
information about EPA's public docket, visit http://www.epa.gov/dockets.
    Pursuant to section 3506(c)(2)(A) of the PRA, EPA is soliciting
comments and information to enable it to: (i) Evaluate whether the
proposed collection of information is necessary for the proper
performance of the functions of the Agency, including whether the
information will have practical utility; (ii) evaluate the accuracy of
the Agency's estimate of the burden of the proposed collection of
information, including the validity of the methodology and assumptions
used; (iii) enhance the quality, utility, and clarity of the
information to be collected; and (iv) minimize the burden of the
collection of information on those who are to respond, including
through the use of appropriate automated electronic, mechanical, or
other technological collection techniques or other forms of information
technology, e.g., permitting electronic submission of responses. EPA
will consider the comments received and amend the ICR as appropriate.
The final ICR package will then be submitted to OMB for review and
approval. At that time, EPA will issue another Federal Register notice
to announce the submission of the ICR to OMB and the opportunity to
submit additional comments to OMB.

    Abstract: Natural Gas STAR is a voluntary program sponsored by the
U.S. Environmental Protection Agency (EPA) that encourages oil and
natural gas companies to adopt cost effective technologies and practice
that improve operational efficiency and reduce methane emissions.
Methane is the primary component of natural gas and a potent greenhouse
gas. The Program works with oil and natural gas companies in the
production, gathering & processing, transmission, and distribution
sectors to remove barriers that inhibit the implementation of
technologies and practices that reduce methane emissions. The Program
effectively promotes the adoption of emission reduction technologies
and practices by helping Natural Gas Star partners evaluate Best
Management Practices (BMPs) and Partner Reported Opportunities (PROs)
in the context of their current operations, and implement them where
cost effective. Implementation of the Program's BMPs and PROs saves
participants money, improves operational efficiency, and enhances the
protection of the environment.
    Form Numbers: Companies that wish to become Natural Gas STAR
partners sign and submit an one-page Memorandum of Understanding (MOU)
to EPA that describes the terms of participation in the Program. The
MOU forms covered under this ICR include:

 Production Partners: EPA Form No. 5900-105
 Transmission Partners: EPA Form No. 5900-96
 Distribution Partners: EPA Form No. 5900-98
 Gathering and Processing Partners: EPA Form No. 5900-101

    Partners agree to complete and submit a Natural Gas STAR
Implementation Plan within six to twelve months of signing the MOU. The
Implementation Plan forms covered under this ICR include:

 Production Partners: EPA Form No. 5900-103
 Transmission Partners: EPA Form No. 5900-109
 Distribution Partners: EPA Form No. 5900-97
 Gathering and Processing Partners: EPA Form No. 5900-100

    After one full year of participation in the Program, partners
submit an annual report documenting the previous year's methane
emission reduction activities. The annual reporting forms covered under
this ICR include:

 Production Partners: EPA Form No. 5900-104
 Transmission Partners: EPA Form No. 5900-95
 Distribution Partners: EPA Form No. 5900-99
 Gathering and Processing Partners: EPA Form No. 5900-102

    Respondents/affected entities: The gathering and processing,
production, transmission, and distribution sectors of the natural gas
industry.
    Respondent's obligation to respond: Voluntary.
    Estimated number of respondents: 92 (total).
    Frequency of response: Annual and semi-annual.
    Total estimated burden: 1,991 hours (per year). Burden is defined
at 5 CFR 1320.03(b).
    Total estimated cost: $184,242 (per year), there are no capital/
start-up costs or O&M costs associated with this information
collection.
    Changes in Estimates: EPA expects that the burden associated with
the final ICR submission will decrease slightly due to the Program's
maturity and participation of companies in the new Methane Challenge
Program.

    Dated: August 29, 2018.
Paul M. Gunning,
Director, Climate Change Division.
[FR Doc. 2018-19254 Filed 9-4-18; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 81, Number 60 (Tuesday, March 29, 2016)]
[Rules and Regulations]
[Pages 17377-17378]
[FR Doc No: 2016-06934]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2015-3773; Airspace Docket No. 15-ANM-22]

Amendment of Class E Airspace; Deer Lodge MT

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This action modifies Class E airspace extending upward from
700 feet above the surface at Deer Lodge-

City-County Airport, Deer Lodge, MT. After a review, the FAA found it
necessary to amend the airspace area for the safety and management of
standard instrument approach procedures for Instrument Flight Rules
(IFR) operations at the airport.

DATES: Effective 0901 UTC, May 26, 2016. The Director of the Federal
Register approves this incorporation by reference action under Title 1,
Code of Federal Regulations, part 51, subject to the annual revision of
FAA Order 7400.9 and publication of conforming amendments.

ADDRESSES: FAA Order 7400.9Z, Airspace Designations and Reporting
Points, and subsequent amendments can be viewed online at http://www.faa.gov/air_traffic/publications/. For further information, you can
contact the Airspace Policy Group, Federal Aviation Administration, 800
Independence Avenue SW., Washington, DC 20591; telephone:<PHONE_NUMBER>.
The Order is also available for inspection at the National Archives and
Records Administration (NARA). For information on the availability of
FAA Order 7400.9Z at NARA, call<PHONE_NUMBER>, or go to http://www.archives.gov/federal_register/code_of_federal-regulations/ibr_locations.html.
    FAA Order 7400.9, Airspace Designations and Reporting Points, is
published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT: Turan Wright, Federal Aviation
Administration, Operations Support Group, Western Service Center, 1601
Lind Avenue SW., Renton, WA 98057; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it amends controlled airspace at Deer Lodge-City-County Airport,
Deer Lodge, MT.

History

    On December 14, 2015, the FAA published in the Federal Register a
notice of proposed rulemaking (NPRM) to modify the Class E airspace
extending upward from 700 feet above the surface at Deer Lodge-City-
County Airport, Deer Lodge, MT (80 FR, 77283) FAA2015-3773. Interested
parties were invited to participate in this rulemaking effort by
submitting written comments on the proposal to the FAA. No comments
were received.
    Class E airspace designations are published in paragraph 6005,
respectively, of FAA Order 7400.9Z, dated August 6, 2015, and effective
September 15, 2015, which is incorporated by reference in 14 CFR part
71.1. The Class E airspace designation listed in this document will be
published subsequently in the Order.

Availability and Summary of Documents for Incorporation by Reference

    This document amends FAA Order 7400.9Z, Airspace Designations and
Reporting Points, dated August 6, 2015, and effective September 15,
2015. FAA Order 7400.9Z is publicly available as listed in the
ADDRESSES section of this document. FAA Order 7400.9Z lists Class A, B,
C, D, and E airspace areas, air traffic service routes, and reporting
points.

The Rule

    This amendment to Title 14, Code of Federal Regulations (14 CFR)
part 71 modifies Class E airspace extending upward from 700 feet above
the surface to within a 6-mile radius of Deer Lodge-City-County
Airport, Deer Lodge-City-County Airport, Deer Lodge, MT.

Regulatory Notices and Analyses

    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore: (1) Is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a Regulatory Evaluation
as the anticipated impact is so minimal. Since this is a routine matter
that only affects air traffic procedures and air navigation, it is
certified that this rule, when promulgated, does not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act.

Environmental Review

    The FAA has determined that this action qualifies for categorical
exclusion under the National Environmental Policy Act in accordance
with FAA Order 1050.1F, ``Environmental Impacts: Policies and
Procedures,'' paragraph 5-6.5a. This airspace action is not expected to
cause any potentially significant environmental impacts, and no
extraordinary circumstances exist that warrant preparation of an
environmental assessment.

Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

Adoption of the Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for Part 71 continues to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.9Z,
Airspace Designations and Reporting Points, dated August 6, 2015, and
effective September 15, 2015, is amended as follows:

Paragraph 6005 Class E Airspace Areas Extending Upward From 700
Feet or More Above the Surface of the Earth.

* * * * *

ANM MT E5 Deer Lodge, MT [Modified]

Deer Lodge-City-County Airport, MT
    (Lat. 46[deg]23'16'' N., long. 112[deg]45'54'' W.)

    That airspace extending upward from 700 feet above the surface
within a 6-mile radius of the Deer Lodge-City-County Airport.

    Issued in Seattle, Washington, on March 16, 2016.
Tracey Johnson,
Manager, Operations Support Group, Western Service Center.
[FR Doc. 2016-06934 Filed 3-28-16; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 87, Number 99 (Monday, May 23, 2022)]
[Notices]
[Page 31226]
[FR Doc No: 2022-11043]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER22-1870-000]

Vansycle II Wind, LLC; Supplemental Notice That Initial Market-
Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced proceeding of
Vansycle II Wind, LLC's application for market-based rate authority,
with an accompanying rate tariff, noting that such application includes
a request for blanket authorization, under 18 CFR part 34, of future
issuances of securities and assumptions of liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone
filing a motion to intervene or protest must serve a copy of that
document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is June 6, 2022.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically may mail similar pleadings to
the Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426. Hand delivered submissions in docketed
proceedings should be delivered to Health and Human Services, 12225
Wilkins Avenue, Rockville, Maryland 20852.
    In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (http://www.ferc.gov) using
the ``eLibrary'' link. Enter the docket number excluding the last three
digits in the docket number field to access the document. At this time,
the Commission has suspended access to the Commission's Public
Reference Room, due to the proclamation declaring a National Emergency
concerning the Novel Coronavirus Disease (COVID-19), issued by the
President on March 13, 2020. For assistance, contact the Federal Energy
Regulatory Commission at [email protected] or call toll-free,
(886) 208-3676 or TYY,<PHONE_NUMBER>.

    Dated: May 17, 2022.
Debbie-Anne A. Reese,
Deputy Secretary.
[FR Doc. 2022-11043 Filed 5-20-22; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 86, Number 158 (Thursday, August 19, 2021)]
[Notices]
[Pages 46737-46744]
[FR Doc No: 2021-17762]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92661; File No. SR-MIAX-2021-37]

Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule To Adopt a Tiered-
Pricing Structure for Additional Limited Service MIAX Express Interface
Ports

August 13, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 2, 2021, Miami International Securities Exchange LLC
(``MIAX'' 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 is filing a proposal to amend the MIAX Options Fee
Schedule (the ``Fee Schedule'') to amend certain port fees.
    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings, at MIAX's principal
office, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to adopt a tiered-
pricing structure for additional Limited Service MIAX Express Interface
(``MEI'') Ports \3\ available to Market Makers.\4\ The Exchange
believes a tiered-pricing structure will encourage Market Makers to be
more efficient and economical when determining how to connect to the
Exchange. This should also enable the Exchange to better monitor and
provide access to the Exchange's network to ensure sufficient capacity
and headroom in the System.\5\
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    \3\ MIAX Express Interface is a connection to MIAX systems that
enables Market Makers to submit simple and complex electronic quotes
to MIAX. See Fee Schedule, note 26.
    \4\ The term ``Market Makers'' refers to Lead Market Makers
(``LMMs''), Primary Lead Market Makers (``PLMMs''), and Registered
Market Makers (``RMMs'') collectively. See Exchange Rule 100.
    \5\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
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Additional Limited Service MEI Port Tiered-Pricing Structure
    The Exchange proposes to amend the fees for additional Limited
Service MEI Ports. Currently, the Exchange allocates two (2) Full
Service MEI Ports \6\ and two (2) Limited Service MEI Ports \7\ per
matching engine \8\ to which each Market Maker connects. Market Makers
may also request additional Limited Service MEI Ports for each matching
engine to which they connect. The Full Service MEI Ports, Limited
Service MEI Ports and the additional Limited Service MEI Ports all
include access to the Exchange's primary and secondary data centers and
its disaster recovery center. Market Makers may request additional
Limited Service MEI Ports for which they are assessed a $100 monthly
fee for each additional Limited Service MEI Port for each matching
engine. This fee has been unchanged since 2016.\9\
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    \6\ Full Service MEI Ports provide Market Makers with the
ability to send Market Maker quotes, eQuotes, and quote purge
messages to the MIAX System. Full Service MEI Ports are also capable
of receiving administrative information. Market Makers are limited
to two Full Service MEI Ports per matching engine. See Fee Schedule,
Section 5)d)ii), note 27.
    \7\ Limited Service MEI Ports provide Market Makers with the
ability to send eQuotes and quote purge messages only, but not
Market Maker Quotes, to the MIAX System. Limited Service MEI Ports
are also capable of receiving administrative information. Market
Makers initially receive two Limited Service MEI Ports per matching
engine. See Fee Schedule, Section 5)d)ii), note 28.
    \8\ A ``matching engine'' is a part of the MIAX electronic
system that processes options quotes and trades on a symbol-by-
symbol basis. Some matching engines will process option classes with
multiple root symbols, and other matching engines will be dedicated
to one single option root symbol (for example, options on SPY will
be processed by one single matching engine that is dedicated only to
SPY). A particular root symbol may only be assigned to a single
designated matching engine. A particular root symbol may not be
assigned to multiple matching engines. See Fee Schedule, Section
5)d)ii), note 29.
    \9\ See Securities Exchange Act Release No. 79666 (December 22,
2016), 81 FR 96133 (December 29, 2016) (SR-MIAX-2016-47).
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    The Exchange now proposes to move from a flat monthly fee per
additional Limited Service MEI Port for each matching engine to a
tiered-pricing structure per additional Limited Service MEI Ports for
each matching engine under which the monthly fee would vary depending
on the number of additional Limited Service MEI Ports the Market Maker
elects to purchase. Specifically, the Exchange will continue to provide
the first and second additional Limited Service MEI Ports for each
matching engine free of charge, as described above, per the initial
allocation of Limited Service MEI Ports that Market Makers receive.
Specifically, (i) the third and fourth additional Limited Service MEI
Ports for each matching engine will increase from the current flat
monthly fee of $100 to $150 per port; (ii) the fifth and sixth
additional Limited Service MEI Ports for engine matching engine will
increase from the current flat monthly fee of $100 to $200 per port;
and (iii) the seventh additional Limited Service MEI Port, and each
Limited Service MEI Port for each matching engine purchased thereafter,
will increase from the current monthly flat fee of $100 to $250 per
port (collectively, the ``Proposed Access Fees'').
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is

consistent with Section 6(b) of the Act \10\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \11\ in particular, in
that it provides for the equitable allocation of reasonable dues, fees
and other charges among Exchange Members and issuers and other persons
using any facility or system which the Exchange operates or controls.
The Exchange also believes the proposal furthers the objectives of
Section 6(b)(5) of the Act \12\ in that it is designed to promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and, in general to protect investors and the public interest and is not
designed to permit unfair discrimination between customers, issuers,
brokers and dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 15 U.S.C. 78f(b)(5).
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    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. In such an
environment, the Exchange must continually adjust its fees for services
and products, in addition to order flow, to remain competitive with
other exchanges. The Exchange believes that the proposed changes
reflect this competitive environment.
    The Exchange believes the proposal to move from a flat fee per
month to a tiered-pricing structure is reasonable, equitably allocated
and not unfairly discriminatory because the Exchange believes the
proposed structure would encourage firms to be more economical and
efficient in the number of additional Limited Service MEI Ports they
purchase. The Exchange believes this will enable the Exchange to better
monitor and provide access to the Exchange's network to ensure
sufficient capacity and headroom in the System.
    The Exchange notes that the firms that are primarily order routers
seeking best-execution do not utilize Limited Service MEI Ports on
MIAX. Therefore, the fees described in the proposed tiered-pricing
structure will only be allocated to market making firms that engage in
advanced trading strategies and typically request multiple Limited
Service MEI Ports. Accordingly, the firms engaged in market making
business generate higher costs by utilizing more of the Exchange's
resources. The market making firms that purchase higher amounts of
Limited Service MEI Ports tend to have specific business oriented
market making and taking strategies, as opposed to firms simply
engaging in best-execution order routing business. The use of such
additional Limited Service MEI Ports is entirely voluntary.
    The Exchange believes that exchanges, in setting fees of all types,
should meet very high standards of transparency to demonstrate why each
new fee or fee increase meets the requirements of the Act that fees be
reasonable, equitably allocated, not unfairly discriminatory, and not
create an undue burden on competition among market participants. The
Exchange believes this high standard is especially important when an
exchange imposes various access fees for market participants to access
an exchange's marketplace. The Exchange deems port fees to be access
fees. It records these fees as part of its ``Access Fees'' revenue in
its financial statements. The Exchange believes that it is important to
demonstrate that these fees are based on its costs and reasonable
business needs. The Exchange believes the Proposed Access Fees will
allow the Exchange to offset expense the Exchange has and will incur,
and that the Exchange is providing sufficient transparency (as
described below) into how the Exchange determined to charge such fees.
Accordingly, the Exchange is providing an analysis of its revenues,
costs, and profitability associated with the Proposed Access Fees. This
analysis includes information regarding its methodology for determining
the costs and revenues associated with the Proposed Access Fees.
    In order to determine the Exchange's costs to provide the access
services associated with the Proposed Access Fees, the Exchange
conducted an extensive cost review in which the Exchange analyzed every
expense item in the Exchange's general expense ledger to determine
whether each such expense relates to the Proposed Access Fees, and, if
such expense did so relate, what portion (or percentage) of such
expense actually supports the access services. The sum of all such
portions of expenses represents the total cost of the Exchange to
provide the access services associated with the Proposed Access Fees.
For the avoidance of doubt, no expense amount was allocated twice. The
Exchange is also providing detailed information regarding the
Exchange's cost allocation methodology--namely, information that
explains the Exchange's rationale for determining that it was
reasonable to allocate certain expenses described in this filing
towards the cost to the Exchange to provide the access services
associated with the Proposed Access Fees.
    In order to determine the Exchange's projected revenues associated
with the Proposed Access Fees, the Exchange analyzed the number of
Market Makers currently utilizing Limited Service MEI Ports, and,
utilizing a recent monthly billing cycle representative of 2021 monthly
revenue, extrapolated annualized revenue on a going-forward basis. The
Exchange does not believe it is appropriate to factor into its analysis
future revenue growth or decline into its projections for purposes of
these calculations, given the uncertainty of such projections due to
the continually changing access needs of market participants, discounts
that can be achieved due to lower trading volume and vice versa, market
participant consolidation, etc. Additionally, the Exchange similarly
does not factor into its analysis future cost growth or decline. The
Exchange is presenting its revenue and expense associated with the
Proposed Access Fees in this filing in a manner that is consistent with
how the Exchange presents its revenue and expense in its Audited
Unconsolidated Financial Statements. The Exchange's most recent Audited
Unconsolidated Financial Statement is for 2020. However, since the
revenue and expense associated with the Proposed Access Fees were not
in place in 2020 or for the first seven months of 2021, the Exchange
believes its 2020 Audited Unconsolidated Financial Statement is not
useful for analyzing the reasonableness of the total annual revenue and
costs associated with the Proposed Access Fees. Accordingly, the
Exchange believes it is more appropriate to analyze the Proposed Access
Fees utilizing its 2021 revenue and costs, as described herein, which
utilize the same presentation methodology as set forth in the
Exchange's previously-issued Audited Unconsolidated Financial
Statements. Based on this analysis, the Exchange believes that the
Proposed Access Fees are fair and reasonable because they will not
result in excessive pricing or supra-competitive profit when comparing
the Exchange's total annual expense associated with providing the
services associated with the Proposed Access Fees versus the total
projected annual revenue the Exchange will collect for providing those
services.
* * * * *
    On March 29, 2019, the Commission issued its Order Disapproving
Proposed Rule Changes to Amend the Fee Schedule on the BOX Market LLC
Options Facility to Establish BOX Connectivity Fees for Participants
and Non-Participants Who Connect to the

BOX Network (the ``BOX Order'').\13\ On May 21, 2019, the Commission
issued the Staff Guidance on SRO Rule Filings Relating to Fees.\14\
Accordingly, the Exchange believes that the Proposed Access Fees are
consistent with the Act because they (i) are reasonable, equitably
allocated, not unfairly discriminatory, and not an undue burden on
competition; (ii) comply with the BOX Order and the Guidance; (iii) are
supported by evidence (including comprehensive revenue and cost data
and analysis) that they are fair and reasonable because they will not
result in excessive pricing or supra-competitive profit; and (iv)
utilize a cost-based justification framework that is substantially
similar to a framework previously used by the Exchange, and its
affiliates MIAX Pearl and MIAX Emerald, LLC (``MIAX Emerald''), to
establish or increase other non-transaction fees.\15\ Accordingly, the
Exchange believes that the Commission should find that the Proposed
Access Fees are consistent with the Act.
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    \13\ See Securities Exchange Act Release No. 85459 (March 29,
2019), 84 FR 13363 (April 4, 2019) (SR-BOX-2018-24, SR-BOX-2018-37,
and SR-BOX-2019-04).
    \14\ See Staff Guidance on SRO Rule Filings Relating to Fees
(May 21, 2019), at https://www.sec.gov/tm/staff-guidance-sro-rule-filings-fees (the ``Guidance'').
    \15\ See Securities Exchange Act Release Nos. 90981 (January 25,
2021), 86 FR 7582 (January 29, 2021) (SR-PEARL-2021-01) (proposal to
increase connectivity fees); 91460 (April 2, 2021), 86 FR 18349 (SR-
EMERALD-2021-11) (proposal to adopt port fees, increase connectivity
fees, and increase additional limited service ports); 91033
(February 1, 2021), 86 FR 8455 (February 5, 2021) (SR-EMERALD-2021-
03) (proposal to adopt trading permit fees).
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* * * * *
    As of July 30, 2021, the Exchange had a market share of only 6.21%
of the U.S. equity options industry for the month of July 2021.\16\ The
Exchange is not aware of any evidence that a market share of
approximately 6-7% provides the Exchange with anti-competitive pricing
power. If the Exchange were to attempt to establish unreasonable
pricing, then no market participant would join or access the Exchange,
and existing market participants would discontinue all or some of their
access services.
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    \16\ See ``The market at a glance,'' available at https://www.miaxoptions.com/ (last visited July 30, 2021).
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    Separately, the Exchange is not aware of any reason why market
participants could not simply drop their access (or not initially
access an exchange) if an exchange were to establish prices for its
non-transaction fees that, in the determination of such market
participant, did not make business or economic sense for such market
participant to access such exchange. No options market participant is
required by rule, regulation, or competitive forces to be a Member of
the Exchange. As evidence of the fact that market participants can and
do drop their access to exchanges based on non-transaction fee pricing,
R2G Services LLC (``R2G'') filed a comment letter after BOX's proposed
rule changes to increase its connectivity fees (SR-BOX-2018-24, SR-BOX-
2018-37, and SR-BOX-2019-04). The R2G Letter stated, ``[w]hen BOX
instituted a $10,000/month price increase for connectivity; we had no
choice but to terminate connectivity into them as well as terminate our
market data relationship. The cost benefit analysis just didn't make
any sense for us at those new levels.'' Similarly, the Exchange's
affiliate, MIAX Emerald, noted in a recent filing that once MIAX
Emerald issued a notice that it was instituting MEI Port fees, among
other non-transaction fees, one MIAX Emerald Member dropped its access
to MIAX Emerald as a result of those fees.\17\ Accordingly, these
examples show that if an exchange sets too high of a fee for ports and/
or other non-transaction fees, including other access fees, for its
relevant marketplace, market participants can choose to drop their
access to such exchange.
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    \17\ See Securities Exchange Act Release No. 91460 (April 2,
2021), 86 FR 18349 (April 8, 2021) (SR-EMERALD-2021-11) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule To Adopt Port Fees, Increase Certain Network
Connectivity Fees, and Increase the Number of Additional Limited
Service MIAX Emerald Express Interface Ports Available to Market
Makers) (adopting tiered MEI Port fee structure ranging from $5,000
to $20,500 per month).
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    In order to provide more detail and to quantify the Exchange's
costs associated with providing access to the Exchange in general, the
Exchange notes that there are material costs associated with providing
the infrastructure and headcount to fully-support access to the
Exchange. The Exchange incurs technology expense related to
establishing and maintaining Information Security services, enhanced
network monitoring and customer reporting, as well as Regulation SCI
mandated processes, associated with its network technology. While some
of the expense is fixed, much of the expense is not fixed, and thus
increases as the services associated with the Proposed Access Fees
increase. For example, new Members to the Exchange may require the
purchase of additional hardware to support those Members as well as
enhanced monitoring and reporting of customer performance that the
Exchange and its affiliates provide. Further, as the total number
Members increases, the Exchange and its affiliates may need to increase
their data center footprint and consume more power, resulting in
increased costs charged by their third-party data center provider.
Accordingly, the cost to the Exchange and its affiliates to provide
access to its System for market participants is not fixed. The Exchange
believes the Proposed Access Fees are reasonable in order to offset a
portion of the costs to the Exchange associated with providing access
to its network infrastructure.
    The Exchange only has four primary sources of revenue: Transaction
fees, access fees (which includes the Proposed Access Fees), regulatory
fees, and market data fees. Accordingly, the Exchange must cover all of
its expenses from these four primary sources of revenue.
    The Exchange believes that the Proposed Access Fees are fair and
reasonable because they will not result in excessive pricing or supra-
competitive profit, when comparing the total annual expense that the
Exchange projects to incur in connection with providing these access
services versus the total annual revenue that the Exchange projects to
collect in connection with services associated with the Proposed Access
Fees. For 2021,\18\ the total annual expense for providing the access
services associated with the Proposed Access Fees is projected to be
approximately $1.32 million. The approximately $1.32 million in
projected total annual expense is comprised of the following, all of
which are directly related to the access services associated with the
Proposed Access Fees: (1) Third-party expense, relating to fees paid by
the Exchange to third-parties for certain products and services; and
(2) internal expense, relating to the internal costs of the Exchange to
provide the services associated with the Proposed Access Fees.\19\ As
noted above, the Exchange believes it is more appropriate to analyze
the Proposed Access Fees utilizing its 2021 revenue and costs, which
utilize the same presentation methodology as set forth in the
Exchange's previously-issued Audited

Unconsolidated Financial Statements.\20\ The $1.32 million in projected
total annual expense is directly related to the access services
associated with the Proposed Access Fees, and not any other product or
service offered by the Exchange. It does not include general costs of
operating matching systems and other trading technology, and no expense
amount was allocated twice.
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    \18\ The Exchange has not yet finalized its 2021 year end
results.
    \19\ The percentage allocations used in this proposed rule
change may differ from past filings from the Exchange or its
affiliates due to, among other things, changes in expenses charged
by third-parties, adjustments to internal resource allocations, and
different system architecture of the Exchange as compared to its
affiliates.
    \20\ For example, the Exchange previously noted that all third-
party expense described in its prior fee filing was contained in the
information technology and communication costs line item under the
section titled ``Operating Expenses Incurred Directly or Allocated
From Parent,'' in the Exchange's 2019 Form 1 Amendment containing
its financial statements for 2018. See Securities Exchange Act
Release No. 87875 (December 31, 2019), 85 FR 770 (January 7, 2020)
(SR-MIAX-2019-51). Accordingly, the third-party expense described in
this filing is attributed to the same line item for the Exchange's
2021 Form 1 Amendment, which will be filed in 2022.
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    As discussed, the Exchange conducted an extensive cost review in
which the Exchange analyzed expense items in the Exchange's general
expense ledger (this includes over 150 separate and distinct expense
items) to determine whether each such expense relates to the access
services associated with the Proposed Access Fees, and, if such expense
did so relate, what portion (or percentage) of such expense actually
supports those services, and thus bears a relationship that is, ``in
nature and closeness,'' directly related to those services. The sum of
all such portions of expenses represents the total cost of the Exchange
to provide access services associated with the Proposed Access Fees.
    For 2021, total third-party expense, relating to fees paid by the
Exchange to third-parties for certain products and services for the
Exchange to be able to provide the access services associated with the
Proposed Access Fees, is projected to be $0.16 million. This includes,
but is not limited to, a portion of the fees paid to: (1) Equinix, for
data center services, for the primary, secondary, and disaster recovery
locations of the Exchange's trading system infrastructure; (2) Zayo
Group Holdings, Inc. (``Zayo'') for network services (fiber and
bandwidth products and services) linking the Exchange's office
locations in Princeton, New Jersey and Miami, Florida, to all data
center locations; (3) Secure Financial Transaction Infrastructure
(``SFTI''),\21\ which supports connectivity and feeds for the entire
U.S. options industry; (4) various other services providers (including
Thompson Reuters, NYSE, Nasdaq, and Internap), which provide content,
connectivity services, and infrastructure services for critical
components of options connectivity and network services; and (5)
various other hardware and software providers (including Dell and
Cisco, which support the production environment in which Members
connect to the network to trade, receive market data, etc.). For
clarity, only a portion of all fees paid to such third-parties is
included in the third-party expense herein, and no expense amount is
allocated twice. Accordingly, the Exchange does not allocate its entire
information technology and communication costs to the access services
associated with the Proposed Access Fees.
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    \21\ In fact, on October 22, 2019, the Exchange was notified by
SFTI that it is again raising its fees charged to the Exchange by
approximately 11%, without having to show that such fee change
complies with the Act by being reasonable, equitably allocated, and
not unfairly discriminatory. It is unfathomable to the Exchange
that, given the critical nature of the infrastructure services
provided by SFTI, that its fees are not required to be rule-filed
with the Commission pursuant to Section 19(b)(1) of the Act and Rule
19b-4 thereunder. See 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b-4,
respectively.
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    The Exchange believes it is reasonable to allocate such third-party
expense described above towards the total cost to the Exchange to
provide the access services associated with the Proposed Access Fees.
In particular, the Exchange believes it is reasonable to allocate the
identified portion of the Equinix expense because Equinix operates the
data centers (primary, secondary, and disaster recovery) that host the
Exchange's network infrastructure. This includes, among other things,
the necessary storage space, which continues to expand and increase in
cost, power to operate the network infrastructure, and cooling
apparatuses to ensure the Exchange's network infrastructure maintains
stability. Without these services from Equinix, the Exchange would not
be able to operate and support the network and provide the access
services associated with the Proposed Access Fees to its Members and
their customers. The Exchange did not allocate all of the Equinix
expense toward the cost of providing the access services associated
with the Proposed Access Fees, only that portion which the Exchange
identified as being specifically mapped to providing the access
services associated with the Proposed Access Fees, approximately 4.95%
of the total applicable Equinix expense. The Exchange believes this
allocation is reasonable because it represents the Exchange's actual
cost to provide the access services associated with the Proposed Access
Fees, and not any other service, as supported by its cost review.
    The Exchange believes it is reasonable to allocate the identified
portion of the Zayo expense because Zayo provides the internet, fiber
and bandwidth connections with respect to the network, linking the
Exchange with its affiliates, MIAX Pearl and MIAX Emerald, as well as
the data center and disaster recovery locations. As such, all of the
trade data, including the billions of messages each day per exchange,
flow through Zayo's infrastructure over the Exchange's network. Without
these services from Zayo, the Exchange would not be able to operate and
support the network and provide the access services associated with the
Proposed Access Fees. The Exchange did not allocate all of the Zayo
expense toward the cost of providing the access services associated
with the Proposed Access Fees, only the portion which the Exchange
identified as being specifically mapped to providing the Proposed
Access Fees, approximately 2.64% of the total applicable Zayo expense.
The Exchange believes this allocation is reasonable because it
represents the Exchange's actual cost to provide the access services
associated with the Proposed Access Fees, and not any other service, as
supported by its cost review.
    The Exchange believes it is reasonable to allocate the identified
portions of the SFTI expense and various other service providers'
(including Thompson Reuters, NYSE, Nasdaq, and Internap) expense
because those entities provide connectivity and feeds for the entire
U.S. options industry, as well as the content, connectivity services,
and infrastructure services for critical components of the network.
Without these services from SFTI and various other service providers,
the Exchange would not be able to operate and support the network and
provide access to its Members and their customers. The Exchange did not
allocate all of the SFTI and other service providers' expense toward
the cost of providing the access services associated with the Proposed
Access Fees, only the portions which the Exchange identified as being
specifically mapped to providing the access services associated with
the Proposed Access Fees, approximately 4.95% of the total applicable
SFTI and other service providers' expense. The Exchange believes this
allocation is reasonable because it represents the Exchange's actual
cost to provide the access services associated with the Proposed Access
Fees.
    The Exchange believes it is reasonable to allocate the identified
portion of the other hardware and software provider

expense because this includes costs for dedicated hardware licenses for
switches and servers, as well as dedicated software licenses for
security monitoring and reporting across the network. Without this
hardware and software, the Exchange would not be able to operate and
support the network and provide access to its Members and their
customers. The Exchange did not allocate all of the hardware and
software provider expense toward the cost of providing the access
services associated with the Proposed Access Fees, only the portions
which the Exchange identified as being specifically mapped to providing
the access services associated with the Proposed Access Fees,
approximately 4.95% of the total applicable hardware and software
provider expense. The Exchange believes this allocation is reasonable
because it represents the Exchange's actual cost to provide the access
services associated with the Proposed Access Fees.
    For 2021, total projected internal expense, relating to the
internal costs of the Exchange to provide the access services
associated with the Proposed Access Fees, is projected to be $1.16
million. This includes, but is not limited to, costs associated with:
(1) Employee compensation and benefits for full-time employees that
support the access services associated with the Proposed Access Fees,
including staff in network operations, trading operations, development,
system operations, and business that support those employees and
functions (including an increase as a result of the higher determinism
project); (2) depreciation and amortization of hardware and software
used to provide the access services associated with the Proposed Access
Fees, including equipment, servers, cabling, purchased software and
internally developed software used in the production environment to
support the network for trading; and (3) occupancy costs for leased
office space for staff that provide the access services associated with
the Proposed Access Fees. The breakdown of these costs is more fully-
described below. For clarity, only a portion of all such internal
expenses are included in the internal expense herein, and no expense
amount is allocated twice. Accordingly, the Exchange does not allocate
its entire costs contained in those items to the access services
associated with the Proposed Access Fees.
    The Exchange believes it is reasonable to allocate such internal
expense described above towards the total cost to the Exchange to
provide the access services associated with the Proposed Access Fees.
In particular, the Exchange's employee compensation and benefits
expense relating to providing the access services associated with the
Proposed Access Fees is projected to be approximately $0.91 million,
which is only a portion of the $12.6 million total projected expense
for employee compensation and benefits. The Exchange believes it is
reasonable to allocate the identified portion of such expense because
this includes the time spent by employees of several departments,
including Technology, Back Office, Systems Operations, Networking,
Business Strategy Development (who create the business requirement
documents that the Technology staff use to develop network features and
enhancements), and Trade Operations. As part of the extensive cost
review conducted by the Exchange, the Exchange reviewed the amount of
time spent by each employee on matters relating to the provision of
access services associated with the Proposed Access Fees. Without these
employees, the Exchange would not be able to provide the access
services associated with the Proposed Access Fees to its Members and
their customers. The Exchange did not allocate all of the employee
compensation and benefits expense toward the cost of the access
services associated with the Proposed Access Fees, only the portions
which the Exchange identified as being specifically mapped to providing
the access services associated with the Proposed Access Fees,
approximately 7.24% of the total applicable employee compensation and
benefits expense. The Exchange believes this allocation is reasonable
because it represents the Exchange's actual cost to provide the access
services associated with the Proposed Access Fees, and not any other
service, as supported by its cost review.
    The Exchange's depreciation and amortization expense relating to
providing the services associated with the Proposed Access Fees is
projected to be $0.22 million, which is only a portion of the $4.8
million total projected expense for depreciation and amortization. The
Exchange believes it is reasonable to allocate the identified portion
of such expense because such expense includes the actual cost of the
computer equipment, such as dedicated servers, computers, laptops,
monitors, information security appliances and storage, and network
switching infrastructure equipment, including switches and taps that
were purchased to operate and support the network and provide the
access services associated with the Proposed Access Fees. Without this
equipment, the Exchange would not be able to operate the network and
provide the access services associated with the Proposed Access Fees to
its Members and their customers. The Exchange did not allocate all of
the depreciation and amortization expense toward the cost of providing
the access services associated with the Proposed Access Fees, only the
portion which the Exchange identified as being specifically mapped to
providing the access services associated with the Proposed Access Fees,
approximately 4.60% of the total applicable depreciation and
amortization expense, as these access services would not be possible
without relying on such. The Exchange believes this allocation is
reasonable because it represents the Exchange's actual cost to provide
the access services associated with the Proposed Access Fees, and not
any other service, as supported by its cost review.
    The Exchange's occupancy expense relating to providing the services
associated with the Proposed Access Fees is projected to be $0.03
million, which is only a portion of the $0.6 million total projected
expense for occupancy. The Exchange believes it is reasonable to
allocate the identified portion of such expense because such expense
represents the portion of the Exchange's cost to rent and maintain a
physical location for the Exchange's staff who operate and support the
network, including providing the access services associated with the
Proposed Access Fees. This amount consists primarily of rent for the
Exchange's Princeton, NJ office, as well as various related costs, such
as physical security, property management fees, property taxes, and
utilities. The Exchange operates its Network Operations Center
(``NOC'') and Security Operations Center (``SOC'') from its Princeton,
New Jersey office location. A centralized office space is required to
house the staff that operates and supports the network. The Exchange
currently has approximately 150 employees. Approximately two-thirds of
the Exchange's staff are in the Technology department, and the majority
of those staff have some role in the operation and performance of the
access services associated with the Proposed Access Fees. Without this
office space, the Exchange would not be able to operate and support the
network and provide the access services associated with the Proposed
Access Fees to its Members and their customers. Accordingly, the
Exchange believes it is reasonable to

allocate the identified portion of its occupancy expense because such
amount represents the Exchange's actual cost to house the equipment and
personnel who operate and support the Exchange's network infrastructure
and the access services associated with the Proposed Access Fees. The
Exchange did not allocate all of the occupancy expense toward the cost
of providing the access services associated with the Proposed Access
Fees, only the portion which the Exchange identified as being
specifically mapped to operating and supporting the network,
approximately 4.69% of the total applicable occupancy expense. The
Exchange believes this allocation is reasonable because it represents
the Exchange's cost to provide the access services associated with the
Proposed Access Fees, and not any other service, as supported by its
cost review.
    The Exchange notes that a material portion of its total overall
expense is allocated to the provision of access services (including
connectivity, ports, and trading permits). The Exchange believes this
is reasonable and in line, as the Exchange operates a technology-based
business that differentiates itself from its competitors based on its
trading systems that rely on access to a high performance network,
resulting in significant technology expense. Over two-thirds of
Exchange staff are technology-related employees. The majority of the
Exchange's expense is technology-based. As described above, the
Exchange has only four primary sources of fees to recover their costs;
thus, the Exchange believes it is reasonable to allocate a material
portion of their total overall expense towards access fees.
    Accordingly, based on the facts and circumstances presented, the
Exchange believes that its provision of the access services associated
with the Proposed Access Fees will not result in excessive pricing or
supra-competitive profit. To illustrate, on a going-forward, fully-
annualized basis, the Exchange projects that annualized revenue for
providing the access services associated with the Proposed Access Fees
would be approximately $3.21 million per annum, based on a recent
billing cycle. The Exchange projects that its annualized expense for
providing the services associated with the Proposed Access Fees will be
approximately $1.32 million per annum. Accordingly, on a fully-
annualized basis, the Exchange believes its total projected revenue for
providing the access services associated with the Proposed Access Fees
will not result in excessive pricing or supra-competitive profit, as
the Exchange will make a profit margin of approximately 59% ($3.21
million in total revenue minus $1.32 million in expense = $1.89 million
in profit per annum). Additionally, this profit margin does not take
into account the cost of capital expenditures (``CapEx'') the Exchange
projects to spend each year on CapEx going forward.
    For the avoidance of doubt, none of the expenses included herein
relating to the access services associated with the Proposed Access
Fees relate to the provision of any other services offered by the
Exchange or its affiliates. Stated differently, no expense amount of
the Exchange is allocated twice. The Exchange notes that, with respect
to expenses associated with the Exchange's affiliates, MIAX Pearl and
MIAX Emerald, those expenses are accounted for separately and are not
included within the scope of this filing. Stated differently, no
expense amount of the Exchange is also allocated to MIAX Pearl or MIAX
Emerald.
    The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to allocate the respective percentages of each expense
category described above towards the total cost to the Exchange of
operating and supporting the network, including providing the access
services associated with the Proposed Access Fees because the Exchange
performed a line-by-line item analysis of all the expenses of the
Exchange, and has determined the expenses that directly relate to
providing access to the Exchange. Further, the Exchange notes that,
without the specific third-party and internal items listed above, the
Exchange would not be able to provide the access services associated
with the Proposed Access Fees to its Members and their customers. Each
of these expense items, including physical hardware, software, employee
compensation and benefits, occupancy costs, and the depreciation and
amortization of equipment, have been identified through a line-by-line
item analysis to be integral to providing access services. The Proposed
Access Fees are intended to recover the Exchange's costs of providing
access to its System. Accordingly, the Exchange believes that the
Proposed Access Fees are fair and reasonable because they do not result
in excessive pricing or supra-competitive profit, when comparing the
actual costs to the Exchange versus the projected annual revenue from
the Proposed Access Fees.
    The Exchange believes the proposed changes are reasonable,
equitably allocated and not unfairly discriminatory, and do not result
in a ``supra-competitive'' \22\ profit. Of note, the Guidance defines
``supra-competitive profit'' as profits that exceed the profits that
can be obtained in a competitive market.\23\ With the proposed changes,
the Exchange anticipates it will have a profit margin of approximately
59% based on the Proposed Access Fees. Based on the 2020 Audited
Financial Statements of competing options exchanges (since the 2021
Audited Financial Statements will likely not become publicly available
until early July 2022, after the Exchange has submitted this filing),
the Exchange's profit margin is similar to or below the operating
profit margins of other competing exchanges. For example, Nasdaq ISE,
LLC's (``ISE'') operating profit margin for all of 2020 was
approximately 85%; Nasdaq PHLX LLC's (``PHLX'') operating profit margin
for all of 2020 was approximately 49%; Nasdaq's operating profit margin
for all of 2020 was approximately 62%; NYSE Arca, Inc.'s (``Arca'')
operating profit margin for all of 2020 was approximately 55%; NYSE
American LLC's (``Amex'') operating profit margin for all of 2020 was
approximately 59%; Cboe's operating profit margin for all of 2020 was
approximately 74%; and BZX's operating profit margin for all of 2020
was approximately 52%.
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    \22\ See supra note 14.
    \23\ See id.
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    The Exchange further believes its proposed fees are reasonable,
equitably allocated and not unfairly discriminatory because the
Exchange believes that it benefits overall competition in the
marketplace to allow relatively new entrants like the Exchange and its
affiliates, MIAX Pearl and MIAX Emerald, to propose fees that may help
these new entrants recoup their substantial investment in building out
costly infrastructure. The Exchange and its affiliates have
historically set their fees purposefully low in order to attract
business and market share. The Exchange notes that the concept of a
tiered-pricing structure for ports is not new or novel.\24\
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    \24\ See Cboe BZX Exchange, Inc. (``BZX'') Options Fee Schedule,
Options Logical Port Fees, Ports with Bulk Quoting Capabilities
(charging $1,500/month for the 1st and 2nd port, $2,500/month for
the 3rd port or more); Cboe Exchange, Inc. (``Cboe'') Fee Schedule,
Logical Connectivity Fees (charging $750/month per port for BOE/FIX
Logical Ports 1 to 5 and $800/month per port for BOE/FIX Logical
Ports greater than 5; charging $1,500/month per port for BOE Bulk
Logical Ports 1 to 5, $2,500/month per port for BOE Bulk Logical
Ports 6 to 30, and $3,000/month per port for BOE Bulk Logical Ports
greater than 30); The Nasdaq Stock Market LLC (``Nasdaq''), Options
7, Pricing Schedule, Section 3 Nasdaq Options Market--Ports and
Other Services (charging $1,500/month per port for first 5 ports,
$1,000/month per port for the next 15 ports, and $500/month per port
for all ports over 20).

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    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. In such an
environment, the Exchange must continually adjust its fees for services
and products, in addition to order flow, to remain competitive with
other exchanges. The Exchange believes that the proposed changes
reflect this competitive environment.
    The Exchange believes the proposal to move from a flat fee per
month to a tiered-pricing structure is reasonable, equitably allocated
and not unfairly discriminatory because the Exchange believes the
proposed structure would encourage firms to be more economical and
efficient in the number of Limited Service MEI Ports they purchase. The
Exchange believes this will enable the Exchange to better monitor and
provide access to the Exchange's network in order to ensure that the
Exchange meets its obligations under the Act such that access to the
Exchange is offered on terms that are not unfairly discriminatory, as
well as to ensure sufficient capacity and headroom in the System.
    There is also no regulatory requirement that any market participant
access any one options exchange, that each Market Maker access the
Exchange utilizing more than the two free Limited Service MEI Ports
that the Exchange provides, access the Exchange in a particular
capacity, or trade any particular product offered on the Exchange.
Moreover, membership is not a requirement to participate on the
Exchange. A market participant may submit orders to the Exchange via a
Sponsored User.\25\ Indeed, the Exchange is unaware of any one options
exchange whose membership includes every registered broker-dealer.
Based on a recent analysis conducted by Cboe, as of October 21, 2020,
only three (3) of the broker-dealers, out of approximately 250 broker-
dealers, were members of at least one exchange that lists options for
trading and were members of all 16 options exchanges.\26\ Additionally,
the Cboe Fee Filing found that several broker-dealers were members of
only a single exchange that lists options for trading and that the
number of members at each exchange that trades options varies
greatly.\27\
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    \25\ See Exchange Rule 210. The Sponsored User is subject to the
fees, if any, of the Sponsoring Member. The Exchange notes that the
Sponsoring Member is not required to publicize, let alone justify or
file with the Commission its fees, and as such could charge the
Sponsored User any fees it deems appropriate, even if such fees
would otherwise be considered supra-competitive, or otherwise
potentially unreasonable or uncompetitive.
    \26\ See Securities Exchange Act Release No. 90333 (November 4,
2020), 85 FR 71666 (November 10, 2020) (SR-CBOE-2020-105) (the
``Cboe Fee Filing''). The Cboe Fee Filing cited to the October 2020
Active Broker Dealer Report, provided by the Commission's Office of
Managing Executive, on October 8, 2020.
    \27\ Id.
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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.
    With respect to intra-market competition, the Exchange does not
believe that the proposed rule change would place certain market
participants at the Exchange at a relative disadvantage compared to
other market participants or affect the ability of such market
participants to compete. As stated above, the Exchange does not believe
its proposed pricing will impose a barrier to entry to smaller
participants and notes that the proposed pricing structure for is
associated with relative usage of the various market participants.
Firms that are primarily order routers seeking best-execution do not
utilize Limited Service MEI Ports on MIAX and therefore will not pay
the fees associated with the tiered-pricing structure. Rather, the fees
described in the proposed tiered-pricing structure will only be
allocated to market making firms that engage in advanced trading
strategies and typically request multiple Limited Service MEI Ports.
Accordingly, the firms engaged in market making business generate
higher costs by utilizing more of the Exchange's resources. The market
making firms that purchase higher amounts of Limited Service MEI Ports
tend to have specific business oriented market making and taking
strategies, as opposed to firms simply engaging in best-execution order
routing business. Additionally, the use of such additional Limited
Service MEI Ports is entirely voluntary.
    The Exchange also does not believe that the proposed rule change
will result in any burden on inter-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act. As
discussed above, options market participants are not forced to access
all options exchanges. The Exchange operates in a highly competitive
environment, and as discussed above, its ability to price access and
ports is constrained by competition among exchanges and third parties.
There are other options markets of which market participants may access
in order to trade options. There is also a possible range of
alternative strategies, including routing to the exchange through
another participant or market center or accessing the Exchange
indirectly. For example, there are 15 other U.S. options exchanges,
which the Exchange must consider in its pricing discipline in order to
compete for market participants. In this competitive environment,
market participants are free to choose which competing exchange to use
to satisfy their business needs. As a result, the Exchange believes
this proposed rule change permits fair competition among national
securities exchanges. 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,\28\ and Rule 19b-4(f)(2) \29\ 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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    \28\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \29\ 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

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-MIAX-2021-37 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-MIAX-2021-37. 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 (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-MIAX-2021-37 and should be submitted on
or before September 9, 2021.
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    \30\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-17762 Filed 8-18-21; 8:45 am]
BILLING CODE 8011-01-P