[Federal Register Volume 87, Number 144 (Thursday, July 28, 2022)]
[Notices]
[Pages 45371-45382]
[FR Doc No: 2022-16148]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95352; File No. SR-EMERALD-2022-25]

Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 515A and Exchange Rule 518

July 22, 2022.
    Pursuant to the provisions of 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 July 13, 2022, MIAX Emerald, LLC (``MIAX
Emerald'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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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 Exchange Rule 518 to adopt (i)
Complex Auction-on-Arrival-Only (``cAOAO'') orders and (ii) Complex
Attributable Orders. Additionally, the Exchange proposes to amend
Exchange Rule 518 to exclude cPRIME Orders from the Complex MIAX
Emerald Price Collar Protection. The Exchange proposes to amend
Exchange Rule 515A to adopt ISO PRIME orders and to make last priority
allocation available for cPRIME Agency Orders.
    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/emerald, at MIAX
Emerald'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: (i) Exchange Rule 518 to adopt a
new Complex Auction-on-Arrival-Only (``cAOAO'') order type and to amend
relevant portions of the rule to describe the behavior and operation of
a cAOAO order; \3\ (ii) Exchange Rule 518 to adopt a new order type,
Complex Attributable Order; \4\ (iii) Interpretation and Policy .05 of
Exchange Rule 518 to exclude cPRIME Orders from the Complex MIAX
Emerald Price Collar Protection; \5\ (iv) Interpretation and Policy .12
of Exchange Rule 515A to remove the provision that precludes last
priority in allocation from being available to Initiating Members \6\
that submit cPRIME Agency Orders; \7\ and (v) amend Exchange Rule 515A
to adopt a new ISO PRIME order type and a new allocation methodology
for Market Maker interest that is executed during an ISO PRIME
Auction.\8\
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    \3\ The Exchange notes that the proposed rule text and
functionality is identical to current rule text and functionality on
MIAX Options. See MIAX Options Exchange Rule 518(b)(9).
    \4\ The Exchange notes that the proposed rule text and
functionality is substantively identical to current rule text and
functionality on MIAX Options. See MIAX Options Exchange Rule
518(b)(8).
    \5\ The Exchange notes that the proposed rule text and
functionality is identical to current rule text and functionality on
MIAX Options. See MIAX Options Exchange Rule 532(b)(6)(i).
    \6\ An ``Initiating Member'' initiates a PRIME Auction. See
Exchange Rule 515A(a)(1). The term ``Member'' means an individual or
organization approved to exercise the trading rights associated with
a Trading Permit. Members are deemed ``members'' under the Exchange
Act. See Exchange Rule 100.
    \7\ The Exchange notes that the proposed rule text and
functionality is identical to current rule text and functionality on
MIAX Options. See Interpretations and Policies .12(c)(v) of MIAX
Options Exchange Rule 515A.
    \8\ The Exchange notes that the proposed rule text and
functionality is identical to current rule text and functionality on
MIAX Options. See Interpretations and Policies .08 of MIAX Options
Exchange Rule 515A and MIAX Options Exchange Rule
515A(a)(2)(iii)(C).
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Background
    The Exchange launched in December 2018, and at that time, the
Exchange Rulebook contained complex order rules that were substantially
similar to the rules of its affiliate exchange, MIAX Options. Since
December 2018, MIAX Options has added functionality to grow its complex
order business. The Exchange proposes to amend its rules to adopt
functionality that currently exists on the MIAX Options Exchange. The
Exchange and MIAX Options seek to align functionality where feasible.
The proposed rule changes described below are identical, or
substantively identical, to rule changes filed by the Exchange's
affiliate, MIAX Options.\9\
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    \9\ See Securities Exchange Act Release Nos. 89212 (July 1,
2020), 85 FR 41075 (July 8, 2020) (SR-MIAX-2020-20); 89085 (June 17,
2020), 85 FR 37719 (June 23, 2020) (SR-MIAX-2020-16); 89206 (July 1,
2020), 85 FR 41079 (July 8, 2020) (SR-MIAX-2020-19); and 89991
(September 24, 2020), 85 FR 61782 (September 30, 2020) (SR-MIAX-
2020-31).
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i. Complex Auction-on-Arrival-Only Order Type
    The Exchange proposes to amend Exchange Rule 518, Complex Orders,
to adopt a new cAOAO order type and to amend relevant portions of the
rule to describe the behavior and operation of the new cAOAO order
type. This proposed rule change is identical to a rule change filed by
the Exchange's affiliate, MIAX Options.\10\
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    \10\ See Securities Exchange Act Release No. 89212 (July 1,
2020), 85 FR 41075 (July 8, 2020) (SR-MIAX-2020-20) (amending MIAX
Options Exchange Rule 518, Complex Orders, to adopt a new Complex
Auction-on-Arrival-Only Order type); see also MIAX Options Exchange
Rule 518(b)(9).
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    Currently, the Exchange offers a Complex Auction-on-Arrival or
``cAOA'' order that is a complex order designated to be placed into a
Complex Auction \11\ upon receipt or upon evaluation. Complex orders
that are not designated

as cAOA will, by default, not initiate a Complex Auction upon arrival,
but except as described in Exchange Rule 518, will be eligible to
participate in a Complex Auction that is in progress when such complex
order arrives, or if placed on the Strategy Book, may participate in or
may initiate a Complex Auction, following evaluation conducted by the
System.\12\ Complex orders that are designated as cIOC \13\ or cAOC
\14\ are not eligible for cAOA designation, and their evaluation will
not result in the initiation of a Complex Auction either upon arrival
or if eligible when resting on the Strategy Book.\15\ Any unexecuted
balance of a cAOA Order remaining upon the completion of the auction
process is eligible \16\ to be placed on the Strategy Book.
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    \11\ See Exchange Rule 518(d).
    \12\ See Exchange Rule 518(b)(2)(i); The term ``System'' means
the automated trading system used by the Exchange for the trading of
securities. See Exchange Rule 100.
    \13\ A Complex Immediate-or-Cancel or ``cIOC'' order is a
complex order that is to be executed in whole or in part upon
receipt. Any portion not so executed is cancelled. See Exchange Rule
518(b)(4).
    \14\ A Complex Auction-or-Cancel or ``cAOC'' order is a complex
limit order used to provide liquidity during a specific Complex
Auction with a time in force that corresponds with that of the
event. cAOC Orders are not displayed to any market participant, and
are not eligible for trading outside of the event. A cAOC order with
a size greater than the aggregate auctioned size (as defined in Rule
518(d)(4)) will be capped for allocation purposes at the aggregate
auctioned size. See Exchange Rule 518(b)(3).
    \15\ See Exchange Rule 518(b)(2)(ii); The ``Strategy Book'' is
the Exchange's electronic book of complex orders and complex quotes.
See Exchange Rule 518(a)(17).
    \16\ Any unexecuted portion of a Complex Auction-eligible order
remaining at the end of the Response Time Interval will either be:
(A) evaluated to determine if it may initiate another Complex
Auction; or (B) placed on the Strategy Book and ranked pursuant to
subparagraph (c)(3) of Exchange Rule 518. See Exchange Rule
518(d)(5)(ii).
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    The Exchange now proposes to adopt a new Complex Auction-on-
Arrival-Only or ``cAOAO'' order type.\17\ A cAOAO order is a complex
order that will be placed into an auction as described in Rule 518(d)
if eligible, and cancelled if not eligible. Any unexecuted balance of a
cAOAO order remaining upon the completion of the auction process is
cancelled. Similar to Immediate-or-Cancel orders, the cAOAO order type
is designed to assist Members \18\ in achieving an expeditious
execution by exposing eligible Complex orders for potential price
improvement before cancelling any unexecuted balance.
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    \17\ See proposed Exchange Rule 518(b)(9).
    \18\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
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Example 1
    Suppose the following market in complex strategy ABC:

MIAX Emerald dcEBBO: \19\ 1.00-1.10 (10 x 10)
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    \19\ The dcEBBO is calculated using the best displayed price for
each component of a complex strategy from the Simple Order Book. For
stock-option orders, the dcEBBO for a complex strategy will be
calculated using the Exchange's best displayed bid or offer in the
individual option component(s) and the NBBO in the stock component.
See Exchange Rule 518(a)(8).

    A cAOAO order is entered to buy 20 @1.07.
    A Request For Response (RFR) message is sent identifying the
complex strategy, the price, quantity of matched complex quotes and/or
orders at that price, imbalance quantity and side of the market of the
cAOAO order, in accordance to Rule 518(d)(2).\20\
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    \20\ An auction is commenced as the cAOAO order satisfies the
URIP requirement described in Exchange Rule 518(c)(5)(i).

    During the Response Time Interval, the following RFR Responses \21\
are received:
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    \21\ Members may submit a response to the RFR message (an ``RFR
Response'') during the Response Time Interval. RFR Responses may be
submitted in $0.01 increments. RFR Responses must be a cAOC Order or
a cAOC eQuote as defined in Interpretations and Policies .02 of
Exchange Rule 518 and may be submitted on either side of the market.
See Exchange Rule 518(d)(4).

Response 1: Sell 10 @1.07
Response 2: Sell 5 @1.07

    At the conclusion of the Response Time Interval, the cAOAO order
trades 15 @1.07.
    The remaining quantity of 5 contracts from the cAOAO order is then
cancelled.
    The Exchange proposes to amend Exchange Rule 518(b), Types of
Complex Orders, to adopt a new Complex Auction-on-Arrival Only
(``cAOAO'') order type to be included among other complex order types
that may be submitted to the Exchange as provided by Exchange Rule
518(b)(1). In addition, certain provisions in current Exchange Rule 518
that apply to cAOA orders would also apply to cAOAO orders. Therefore,
the Exchange proposes to amend Rule 518 to incorporate references to
cAOAO orders as necessary. Specifically, the Exchange proposes to amend
Rule 518(c)(6) to provide that complex orders may be submitted as
market orders and may be designated as cAOA or cAOAO. Additionally, the
Exchange proposes to amend Rule 518(c)(6)(i) to provide that complex
market orders designated as cAOA or cAOAO may initiate a Complex
Auction upon arrival or join a Complex Auction in progress. Finally,
the Exchange proposes to amend Rule 518(c)(6)(ii) to provide that
complex market orders not designated as cAOA or cAOAO will trade
immediately with any contra-side complex orders or quotes, or against
the individual legs, up to and including the dcEBBO, and may be subject
to the managed interest process described in subparagraph (c)(4) of
Exchange Rule 518, and the evaluation process described in subparagraph
(c)(5) of Exchange Rule 518.
    The Exchange also proposes to amend Rule 518(d) to incorporate
references to cAOAO orders. Specifically, the Exchange proposes to
amend Rule 518(d)(1) to provide that, in order to initiate a Complex
Auction upon receipt, a Complex Auction-eligible order must be
designated as cAOA or cAOAO. Also, the order must meet the criteria
described in Interpretation and Policy .03(b) of Exchange Rule 518
regarding the URIP.\22\ Also, a complex order not designated as cAOA or
cAOAO (i.e., a complex order considered by default to be ``do not
auction on arrival'' by the System) may: (i) join a Complex Auction in
progress at the time of receipt; (ii) become a Complex Auction-eligible
order after resting on the Strategy Book and automatically join a
Complex Auction then in effect for the complex strategy; or (iii)
initiate a Complex Auction if it meets the criteria described in
Interpretation and Policy .03(a) of Exchange Rule 518 regarding the IIP
or .03(c) of Exchange Rule 518 regarding the RIP.
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    \22\ Upon receipt of a complex order when the complex strategy
is open, the System will calculate an Upon Receipt Improvement
Percentage (``URIP'') value, which is a defined percentage of the
current dcEBBO bid/ask differential. Such percentage will be defined
by the Exchange and communicated to Members via Regulatory Circular.
If a Complex Auction-eligible Order is priced equal to, or improves,
the URIP value and is also priced to improve other complex orders
and/or quotes resting at the top of the Strategy Book, the complex
order will be eligible to initiate a Complex Auction. See
Interpretations and Polices .03(b) of Exchange Rule 518.
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    Aside from including references to cAOAO orders, the proposal makes
no changes to the operation of Rule 518(d)(1).
    The Exchange also proposes to amend Exchange Rule 518(d)(9) to add
a reference to cAOAO orders. The title of Rule 518(d)(9) as amended
will read, ``Processing of Non-cAOA or cAOAO Complex Orders.'' The text
of Rule 518(d)(9) as amended will provide that a complex order not
designated as cAOA or cAOAO will either be: (i) executed in full at a
single price or at multiple prices up to its limit price, with
remaining contracts placed on the

Strategy Book; (ii) executed until the order exhausts the opposite side
dcEBBO, at which time the order will be placed on the Strategy Book and
evaluated for Complex Auction eligibility; or (iii) cancelled. Aside
from adding a reference for cAOAO orders, the proposal makes no changes
to the operation of Rule 518(d)(9).
    The Exchange believes the proposed changes will allow the Exchange
to effectively implement the proposed cAOAO order type.
ii. Complex Attributable Order Type
    The Exchange proposes to amend Exchange Rule 518, Complex Orders,
to adopt a new order type, Complex Attributable Order.\23\ This
proposed rule change is substantively identical to a rule change filed
by the Exchange's affiliate, MIAX Options.\24\
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    \23\ See proposed Rule 518(b)(8).
    \24\ See Securities Exchange Act Release No. 89085 (June 17,
2020), 85 FR 37719 (June 23, 2020) (SR-MIAX-2020-16) (amending MIAX
Options Exchange Rule 518, Complex Orders, to adopt a new Complex
Attributable Order type); see also MIAX Options Exchange Rule
518(b)(8).
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    Currently, the Exchange offers an Attributable Order \25\ in its
simple market.\26\ Current Exchange Rule 516(e) states that an
Attributable Order is a market \27\ or limit order \28\ which displays
the user firm ID for purposes of trading on the Exchange. Use of
Attributable Orders is voluntary. Attributable Orders entered into the
Exchange System will be available for execution but may not display the
user firm ID for all Exchange processes. The Exchange will issue a
Regulatory Circular specifying the Exchange processes and the class(es)
of securities for which the Attributable Order type shall be
available.\29\ Currently, an Attributable Order is available for all
option classes \30\ and will display the Executing Broker MPID \31\ for
new and updated simple orders on the MIAX Order (``MOR'') Feed and will
also display the Executing Broker MPID for certain liquidity seeking
events such as opening/reopening imbalances or the opening route
mechanism on the Administrative Information Subscriber (``AIS'') Feed.
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    \25\ See Exchange Rule 516(e).
    \26\ The Exchange has a Simple Order Book, which is the
Exchange's regular electronic book of orders and quotes. See
Exchange Rule 518(a)(15). The Exchange also has a Strategy Order
book, which is the Exchange's electronic book of complex orders and
complex quotes. See Exchange Rule 518(a)(17).
    \27\ A market order is an order to buy or sell a stated number
of option contracts at the best price available at the time of
execution. See Exchange Rule 516(a).
    \28\ A limit order is an order to buy or sell a stated number of
option contracts at a specified price or better. See Exchange Rule
516(b).
    \29\ See Exchange Rule 516(e).
    \30\ See MIAX Emerald Regulatory Circular 2019-28, Attributable
Order (February 28, 2019) available at https://www.miaxoptions.com/sites/default/files/circular-files/MIAX_Emerald_RC_2019_28.pdf.
    \31\ An MPID is a Market Participant Identifier used by the
Exchange.
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    The Exchange now proposes to adopt new subparagraph (8) to Exchange
Rule 518(b) which will similarly provide that a Complex Attributable
Order is a complex market or limit order which displays the user firm
ID for purposes of trading on the Exchange. Proposed Rule 518(b)(8)
further states that the use of Complex Attributable Orders is
voluntary. Complex Attributable Orders entered into the Exchange System
will be available for execution but may not display the Executing
Broker ID for all Exchange processes. Complex Attributable Orders will
be used similarly to Attributable Orders on the simple market.
    If enabled, the Executing Broker MPID will be displayed on the MOR
Feed for new and updated complex orders, and on the AIS Feed when a
Complex Attributable Order initiates or participates in the following
events: a cPRIME Auction, a Complex Auction, or a Complex Liquidity
Exposure Process (``cLEP'') Auction. The Complex Attributable Order
type can be activated on an order-by-order basis with the default set
to off. The Exchange will issue a Regulatory Circular specifying the
Exchange processes and the class(es) of securities for which the
Complex Attributable Order type shall be available.\32\
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    \32\ The ability to display information pertaining to a single
order depends upon the Exchange's ability to broadcast that
information to its members. This is currently accomplished through
the Exchange's market data products, which, for example, includes
the Administrative Information Subscriber Feed (``AIS''). Thus, the
functionality of a Complex Attributable Order is linked to what is
technologically feasible through the Exchange's market data
products. The definition of a Complex Attributable Order will
acknowledge this relationship and allow the functionality of the
Complex Attributable Order type to develop and be deployed
correspondingly with technical advances related to its market data
products. In its definition of a Complex Attributable Order, the
Exchange proposes to state that, ``Complex Attributable Orders
entered into the Exchange System will be available for execution but
may not display the user firm ID for all Exchange processes.'' This
will serve to put Emerald members on notice that the functionality
of a Complex Attributable Order to display the user firm ID, as it
continually develops, may not be available during all Exchange
processes.
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iii. Complex PRIME Through MPC
    The Exchange proposes to amend Interpretation and Policy .05 of
Exchange Rule 518 to exclude cPRIME Orders from the Complex MIAX
Emerald Price Collar Protection provided to complex orders as described
in paragraph (f)(1) of the Rule. This proposed rule change is identical
to a rule change filed by the Exchange's affiliate, MIAX Options.\33\
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    \33\ See Securities Exchange Act Release No. 89206 (July 1,
2020), 85 FR 41079 (July 8, 2020) (SR-MIAX-2020-19) (amending MIAX
Options Exchange Rule 518, Complex Orders, to exclude cPRIME Orders
from the Complex MIAX Options Price Collar Protection provided to
complex orders as described in the Rule); see also MIAX Options
Exchange Rule 532(b)(6)(i).
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Background
    In December of 2018, the Exchange adopted rules governing the
trading in, and detailing the functionality of the MIAX Emerald System
in the handling of, complex orders on the Exchange.\34\ In order to
further support the trading of complex orders on the Exchange, the
Exchange adopted an additional price protection feature for complex
orders, the Complex MIAX Emerald Price Collar (``MPC'').\35\ The MPC
price protection feature is designed to help maintain a fair and
orderly market by helping to mitigate the potential risk of executions
at prices that are extreme and potentially erroneous.
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    \34\ See Securities Exchange Act Release No. 84891 (December 20,
2018), 83 FR 67421 (December 28, 2018) (File No. 10-233) (Order
approving application of MIAX Emerald, LLC for registration as a
national securities exchange).
    \35\ Id.
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    More specifically, the MPC price protection feature is an Exchange-
wide price protection mechanism under which a complex order or eQuote
to sell will not be displayed or executed at a price that is lower than
the opposite side cNBBO \36\ at the time the MPC is assigned by the
System (i.e., upon receipt or upon opening) by more than a specific
dollar amount expressed in $0.01 increments (the ``MPC Setting''), and
under which a complex order or eQuote to buy will not be displayed or
executed at a price that is higher than the opposite side cNBBO offer
at the time the MPC is assigned by the System by more than the MPC
Setting (each the ``MPC Price'').\37\ All complex orders, together with
cAOC eQuotes and cIOC eQuotes (as defined in Interpretations and
Policies .02(c)(1) and (2) of Exchange Rule 518) (collectively,
``eQuotes''), are subject to the MPC price protection feature.\38\
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    \36\ The cNBBO is calculated using the NBBO for each component
of a complex strategy to establish the best net bid and offer for a
complex strategy. See Exchange Rule 518(a)(2).
    \37\ See Interpretations and Policies .05(f) of Exchange Rule
518.
    \38\ See Interpretations and Policies .05(f)(1) of Exchange Rule
518.
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    When the Exchange began its operations in December of 2018, the
Exchange Rulebook contained three complex order types: Complex

Customer Cross (``cC2C''),\39\ Complex Qualified Contingent Cross
(``cQCC''),\40\ and cPRIME,\41\ which, by definition, became subject to
the MPC price protection. The Exchange rules exclude these three new
complex order types from certain price protection features available on
the Exchange.\42\ Specifically, in Interpretation and Policy .05(d) of
Rule 518, it is stated that the Implied Away Best Bid or Offer
(``ixABBO'') Price Protection feature is not available for cPRIME
Orders, cC2C Orders, and cQCC Orders. The ixABBO protection was not
available initially because this type of protection wasn't necessary
for these complex order types. Specifically, with respect to cPRIME
Orders, a cPRIME Agency Order is received by the Exchange, and
guaranteed an execution against, a contra-side order at a single price
or at multiple prices with a ``stop'' price outside of which the cPRIME
Agency Order, the contra-side order, and auction responses will not be
executed.
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    \39\ See Exchange Rule 518(b)(5).
    \40\ See Exchange Rule 518(b)(6).
    \41\ See Exchange Rule 518(b)(7).
    \42\ See supra note 34.
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    The Exchange also excluded cPRIME Orders, cC2C Orders and cQCC
Orders from the MIAX Emerald Order Monitor for Complex Orders
(``cMOM'') stating in its filing, ``that cPRIME Orders, cC2C Orders and
cQCC Orders are all guaranteed an execution at a price or prices
determined by the participants, and cPRIME Orders are subject to
further price improvement. Therefore, the cMOM price protection feature
isn't necessary for these complex order types, and thus these complex
orders types will not be rejected based upon cMOM price parameters.''
\43\
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    \43\ Id.
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    For similar reasons, the Exchange now proposes to amend
Interpretation and Policy .05(f)(1) of Exchange Rule 518. As amended,
Interpretation and Policy .05(f)(1) of Exchange Rule 518 will state
that, all complex orders (excluding cPRIME Orders),\44\ together with
AOC eQuotes and cIOC eQuotes (as defined in Interpretation and Policy
.02(c)(1) and (c) of Exchange Rule 518) (collectively ``eQuotes''), are
subject to the MPC price protection feature.
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    \44\ The Exchange notes that while cPRIME, cQCC, and cC2C Orders
are all paired orders, the proposal is limited in scope to cPRIME
Orders only.
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    A cPRIME Order is a paired order with an established minimum
execution price that must meet certain defined internal criteria to be
eligible to participate in a cPRIME Auction. Specifically, the
initiating price for a cPRIME Agency Order must be better than (inside)
the icEBBO \45\ for the strategy and any other complex orders on the
Strategy Book.\46\ The System will reject cPRIME Agency Orders
submitted with an initiating price that is equal to or worse than
(outside) the icEBBO or any other complex orders on the Strategy
Book.\47\ Because of these requirements, the Exchange believes that the
MPC protection for cPRIME Orders is unnecessary, and in certain
occasions, prevents orders that are otherwise eligible for
participation in the cPRIME process from being accepted by the
Exchange. Further, a cPRIME Order is a paired order, and the Agency
side of a cPRIME Order is effectively executed when received (and, in
the case of cPRIME Orders, subject to price improvement) because it is
a paired order with a guaranteed execution.
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    \45\ The Implied Complex MIAX Emerald Best Bid or Offer or
``icEBBO'' is a calculation that uses the best price from the Simple
Order Book for each component of a complex strategy including
displayed and non-displayed interest. For stock-option orders, the
icEBBO for a complex strategy will be calculated using the best
price (whether displayed or non-displayed) on the Simple Order Book
in the individual option component(s), and the NBBO in the stock
component. See Exchange Rule 518(a)(12).
    \46\ The ``Strategy Book'' is the Exchange's electronic book of
complex orders and complex quotes. See Exchange Rule 518(a)(17).
    \47\ See Interpretations and Policies .12(a)(i) of Exchange Rule
515A.
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    The following examples demonstrate the current behavior as compared
to the proposed behavior.
Current cPRIME Evaluation Subject to MPC Protection
Example 1A The auction start price (``ASP'') of a Complex PRIME order
cannot be outside the MPC opposite the Agency side

MIAX Emerald Price Collar Value (MPCV) = 0.25
cEBBO 3.00 x 4.00
cNBBO 3.00 x 3.50
MPC = (3.00 - 0.25) x (3.50 + 0.25) = 2.75 x 3.75

    An incoming cPRIME Order is received where the ASP of the Agency
order is to buy complex strategies at a price of 3.80. Because the ASP
of the Agency order to buy at 3.80 is outside the opposite side MPC of
3.75 (cNBO plus the MPCV), the cPRIME Order is rejected.
Proposed cPRIME Evaluation Without MPC Protection
Example 1B The auction start price of a Complex PRIME Order CAN be
outside the MPC opposite the Agency side

MIAX Emerald Price Collar Value (MPCV) = 0.25
cEBBO 3.00 x 4.00
cNBBO 3.00 x 3.50
    MPC = (3.00 - 0.25) x (3.50 + 0.25) = 2.75 x 3.75

    An incoming cPRIME Order is received where the ASP of the Agency
Order is to buy complex strategies at a price of 3.80. Although the ASP
of the Agency Order to buy at 3.80 is outside the opposite side MPC of
3.75 (cNBO plus the MPCV), the cPRIME Order is accepted and initiates
an auction.
Proposed cPRIME Evaluation Without MPC Protection When Inside the
icEBBO
Example 2A The auction start price of a Complex PRIME Order CAN be
outside the MPC opposite the Agency side, and accepted if inside the
icEBBO

MIAX Emerald Price Collar Value (MPCV) = 0.25
Strategy +1A+1B
Option A EBBO \48\ 1.00 x 1.50
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    \48\ The term ``EBBO'' means the best bid or offer on the Simple
Order Book on the Exchange. See Exchange Rule 518(a)(10).
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Option B EBBO 2.00 x 2.50
icEBBO 1(1.00 + 2.00) x 1(1.50 + 2.50) = 3.00 x 4.00
Option A NBBO 1.00 x 1.30
Option B NBBO 2.00 x 2.20
cNBBO 1(1.00 + 2.00) x 1(1.30 + 2.20) = 3.00 x 3.50
MPC = (3.00 - 0.25) x (3.50 + 0.25) = 2.75 x 3.75

    An incoming cPRIME Order is received where the ASP of the Agency
Order is to buy complex strategies at a price of 3.80. The ASP of the
Agency Order to buy at 3.80 is permitted outside the opposite side MPC
of 3.75 (cNBO plus the MPCV), and it is inside the icEBBO of 3.00 x
4.00; therefore the cPRIME Order is accepted and initiates an auction.
Proposed cPRIME Evaluation Without MPC Protection When Outside the
icEBBO
Example 2B The auction start price of a Complex PRIME Order CAN be
outside the MPC opposite the Agency side, but is rejected if outside
the icEBBO \49\
---------------------------------------------------------------------------

    \49\ The initiating price for a cPRIME Agency Order must be
better than (inside) the icEBBO for the strategy and any other
complex orders on the Strategy Book. The System will reject cPRIME
Agency Orders submitted with an initiating price that is equal to or
worse than (outside) the icEBBO or any other complex orders on the
Strategy Book. See Interpretations and Policies .12(a)(i) of
Exchange Rule 515A.
---------------------------------------------------------------------------

MIAX Emerald Price Collar Value (MPCV) = 0.25
Strategy +1A+1B
Option A EBBO 1.00 x 1.50

Option B EBBO 2.00 x 2.25
icEBBO 1(1.00 + 2.00) x 1(1.50 + 2.25) = 3.00 x 3.75
Option A NBBO \50\ 1.00 x 1.30
---------------------------------------------------------------------------

    \50\ The term ``NBBO'' means the national best bid or offer as
calculated by the Exchange based on market information received by
the Exchange from the appropriate Securities Information Processor
(``SIP''). See Exchange Rule 518(a)(14).
---------------------------------------------------------------------------

Option B NBBO 2.00 x 2.20
cNBBO 1(1.00 + 2.00) x 1(1.30 + 2.20) = 3.00 x 3.50
MPC = (3.00 - 0.25) x (3.50 + 0.25) = 2.75 x 3.75
    An incoming cPRIME Order is received where the ASP of the Agency
Order is to buy complex strategies at a price of 3.80. Although the ASP
of the Agency Order to buy at 3.80 is permitted outside the opposite
side MPC of 3.75 (cNBO plus the MPCV), it is outside the icEBBO of 3.00
x 3.75; therefore the cPRIME Order is rejected.
iv. Complex Last To Fill
    The Exchange proposes to amend Interpretation and Policy .12 of
Exchange Rule 515A to remove the provision that precludes last priority
in allocation from being available to Initiating Members \51\ that
submit cPRIME Agency Orders. This proposed rule change is identical to
a rule change filed by the Exchange's affiliate, MIAX Options.\52\
---------------------------------------------------------------------------

    \51\ An ``Initiating Member'' initiates a PRIME Auction. See
Exchange Rule 515A(a)(1). The term ``Member'' means an individual or
organization approved to exercise the trading rights associated with
a Trading Permit. Members are deemed ``members'' under the Exchange
Act. See Exchange Rule 100.
    \52\ See Securities Exchange Act Release No. 89206 (July 1,
2020), 85 FR 41079 (July 8, 2020) (SR-MIAX-2020-19) (amending
Interpretation and Policy .12 of MIAX Options Exchange Rule 515A to
remove the provision that precludes last priority in allocation from
being available to Initiating Members that submit cPRIME Agency
Orders); see also Interpretations and Policies .12(c)(v) of MIAX
Options Exchange Rule 515A.
---------------------------------------------------------------------------

    Currently Interpretation and Policy .12(c)(v) of Exchange Rule 515A
provides that the order allocation provisions contained in Rule
515A(a)(2)(iii) shall apply to cPRIME Auctions, provided that: (A) all
references to contracts shall be deemed to be references to complex
strategies as defined in Rule 518(a)(6); and (B) the last priority
allocation option described in Rule 515A(a)(2)(iii)(L) is not available
for Initiating Members that submit cPRIME Agency Orders. When the
Exchange launched and adopted cPRIME functionality,\53\ the Exchange
stated that the last priority in allocation option described in Rule
515A(a)(2)(iii)(L) \54\ is not available for Initiating Members that
submit cPRIME Agency Orders. As, at that time, the Exchange did not
believe that there was significant Member demand for the use of the
last priority in allocation option in cPRIME Auctions, there was
therefore no need to include it in the allocation model then in use for
cPRIME Auctions.
---------------------------------------------------------------------------

    \53\ See supra note 34.
    \54\ If the Initiating Member elected to have last priority in
allocation when submitting an Agency Order to initiate an Auction
against a single-price submission, the Initiating Member will be
allocated only the amount of contracts remaining, if any, after the
Agency Order is allocated to all other responses at the single price
specified by the Initiating Member. See Exchange Rule
515A(a)(2)(iii)(L).
---------------------------------------------------------------------------

    The Exchange now believes that there is significant Member demand
for the use of the last priority in [sic] allocation option in cPRIME
Auctions, and proposes to amend its current rule to remove the
provision that makes it unavailable for Initiating Members that submit
cPRIME Agency Orders. The Exchange proposes to remove subsection
(c)(v)(B) of Interpretation and Policy .12 in its entirety. New
proposed subsection (c)(v) will provide that, the order allocation
provisions contained in Rule 515A(a)(2)(iii) shall apply to cPRIME
Auctions, provided that all references to contracts shall be deemed to
be references to complex strategies as defined in Rule 518(a)(6).
v. ISO PRIME
    The Exchange proposes to amend Exchange Rule 515A, MIAX Emerald
Price Improvement Mechanism (``PRIME'') and PRIME Solicitation
Mechanism, to adopt a new ISO PRIME order type. This proposed rule
change is identical to a rule change filed by the Exchange's affiliate,
MIAX Options.\55\
---------------------------------------------------------------------------

    \55\ See Securities Exchange Act Release No. 89991 (September
24, 2020), 85 FR 61782 (September 30, 2020) (SR-MIAX-2020-31)
(amending MIAX Options Exchange Rule 515A, MIAX PRIME and PRIME
Solicitation Mechanism, to adopt a new ISO PRIME Order type); see
also Interpretations and Policies .08 of MIAX Options Exchange Rule
515A.
---------------------------------------------------------------------------

    PRIME is a process by which a Member may electronically submit for
execution (``Auction'') an order it represents as agent (``Agency
Order'') against principal interest, and/or an Agency Order against
solicited interest.\56\ A Member (the ``Initiating Member'') may
initiate an Auction provided all of the following are met: (i) the
Agency Order is in a class designated as eligible for PRIME as
determined by the Exchange and within the designated Auction order
eligibility size parameters as such size parameters are determined by
the Exchange; (ii) the Initiating Member must stop the entire Agency
Order as principal or with a solicited order at the better of the NBBO
or the Agency Order's limit price (if the order is a limit order);
(iii) with respect to Agency Orders that have a size of less than 50
contracts, if at the time of receipt of the Agency Order, the NBBO has
a bid/ask differential of $0.01, the System will reject the Agency
Order; and (iv) Post-Only OQs \57\ may not participate in PRIME as an
Agency Order, principal interest or solicited interest.\58\
---------------------------------------------------------------------------

    \56\ See Exchange Rule 515A(a).
    \57\ Post-Only Orders are defined in Rule 516(m). Post-Only
Quotes are defined in Rule 517(a)(1)(i). Post-Only Orders and Post-
Only Quotes are together referred to as ``Post-Only OQ.'' See
Exchange Rule 515(a).
    \58\ See Exchange Rule 515A(a)(1).
---------------------------------------------------------------------------

    An Intermarket Sweep Order (``ISO'') is defined in Exchange Rule
1400(i) as a limit order for an options series that, simultaneously
with the routing of the ISO, one or more additional ISOs, as necessary,
are routed to execute against the full displayed size of any Protected
Bid,\59\ in the case of a limit order to sell, or any Protected
Offer,\60\ in the case of a limit order to buy, for the options series
with a price that is superior to the limit price of the ISO. A Member
may submit an ISO to the Exchange only if it has simultaneously routed
one or more additional Intermarket Sweep Orders to execute against the
full displayed size of any Protected Bid, in the case of a limit order
to sell, or Protected Offer, in the case of a limit order to buy, for
an options series with a price that is superior to the limit price of
the ISO. An ISO may be either an Immediate-Or-Cancel Order \61\ or an
order that expires on the day it is entered.\62\
---------------------------------------------------------------------------

    \59\ A ``Protected Bid'' or ``Protected Offer'' means a Bid or
Offer in an options series, respectively, that: (a) is disseminated
pursuant to the OPRA Plan; and (b) is the Best Bid or Best Offer,
respectively, displayed by an Eligible Exchange. See MIAX Options
Exchange Rule 1400(p), which is incorporated into the Exchange Rules
by reference.
    \60\ Id.
    \61\ An immediate-or-cancel order is an order that is to be
executed in whole or in part upon receipt. Any portion not so
executed is cancelled. An immediate-or-cancel order is not valid
during the opening rotation process described in Rule 503. See
Exchange Rule 516(c).
    \62\ See Exchange Rule 1400(i).
---------------------------------------------------------------------------

    The Exchange now proposes to implement an ISO PRIME order type
(``ISO PRIME'') that will allow the submission of an ISO into the
PRIME. Specifically, an ISO PRIME is the transmission of two orders for
crossing pursuant to Rule 515A, MIAX Emerald Price Improvement
Mechanism (``PRIME'') and PRIME Solicitation Mechanism, without regard
for better priced Protected Bids or Protected Offers because the Member
transmitting the ISO PRIME order to the Exchange has, simultaneously
with the submission of the ISO PRIME order, routed one or more ISOs, as
necessary,

to execute against the full displayed size of any Protected Bid or
Protected Offer that is superior to the starting PRIME Auction price,
and has swept all interest in the Exchange's Book \63\ priced better
than the proposed Auction starting price.\64\ Any execution(s)
resulting from such sweeps shall accrue to the PRIME Order, meaning
that any executions will be given to the agency side of the order.
---------------------------------------------------------------------------

    \63\ The term ``Book'' means the electronic book of buy and sell
orders and quotes maintained by the System. See Exchange Rule 100.
    \64\ The Exchange notes that it has an ISO Trade Through
surveillance in place that will identify and capture when an order
provider marks an order (standard or PRIME) ISO and the order
possibly trades through a protected bid or ask price at an away
exchange. The Exchange will monitor the NBBO prior to and after the
order trades on the Exchange to detect potential trade through
violations.
---------------------------------------------------------------------------

    The Exchange will accept an ISO PRIME provided that the order
adheres to the current PRIME Order acceptance criteria outlined above,
except that the initiating Member is only required to stop the entire
Agency Order as principal or with a solicited order at the Agency
Order's limit price (if the order is a limit order). Therefore, the
Initiating Member may initiate an Auction provided that all of the
following are met: (i) the Agency Order is in a class designated as
eligible for PRIME as determined by the Exchange and within the
designated Auction order eligibility size parameters as such size
parameters are determined by the Exchange; (ii) the Initiating Member
must stop the entire Agency Order as principal or with a solicited
order at the better of the NBBO or the Agency Order's limit price (if
the order is a limit order); (iii) with respect to Agency Orders that
have a size of less than 50 contracts, if at the time of receipt of the
Agency Order, the NBBO has a bid/ask differential of $0.01, the System
will reject the Agency Order; and (iv) Post-Only OQs may not
participate in PRIME as an Agency Order, principal interest or
solicited interest.\65\
---------------------------------------------------------------------------

    \65\ See Exchange Rule 515A(a)(1).
---------------------------------------------------------------------------

    The Exchange will process the ISO PRIME order in the same manner
that it currently processes PRIME Orders, except that it will initiate
a PRIME Auction without protecting away prices. The Member transmitting
the ISO PRIME order will bear the responsibility to clear all better
priced interest away simultaneously with the submission of the ISO
PRIME order to the Exchange.\66\
---------------------------------------------------------------------------

    \66\ See supra note 64.
---------------------------------------------------------------------------

    The Exchange also proposes to adopt a new allocation methodology
specifically for Market Maker \67\ interest that is executed during an
ISO PRIME Auction.\68\ Currently, allocation in a PRIME Auction follows
the order allocation methodology defined in Exchange Rule
515A(a)(2)(iii), which provides that Priority Customer \69\ Orders
resting on the Book before, or that are received during, the Response
Time Interval \70\ and Priority Customer RFR \71\ responses shall,
collectively have first priority to trade against the Agency Order. The
allocation of an Agency Order against the Priority Customer Orders
resting in the Book, Priority Customer Orders received during the
Response Time Interval, and Priority Customer RFR responses shall be in
the sequence in which they are received by the System.\72\ Market Maker
priority quotes \73\ and RFR responses from Market Makers with priority
quotes will collectively have second priority. The allocation of Agency
Orders against these contra side quotes and RFR responses shall be on a
size pro rata basis \74\ as defined in Rule 514(c)(2).\75\ Professional
Interest \76\ Orders resting in the Book, Professional Interest Orders
placed in the Book during the Response Time Interval, Professional
Interest quotes, and Professional Interest RFR responses will
collectively have third priority. The allocation of Agency Orders
against these contra side orders and RFR Responses shall be on a size
pro rata basis as defined in Rule 514(c)(2).\77\
---------------------------------------------------------------------------

    \67\ The term ``Market Makers'' refers to ``Lead Market
Makers'', ``Primary Lead Market Makers'' and ``Registered Market
Makers'' collectively. See Exchange Rule 100.
    \68\ See proposed Interpretations and Policies .12(c)(v) of Rule
515A.
    \69\ The term ``Priority Customer'' means a person or entity
that (i) is not a broker or dealer in securities, and (ii) does not
place more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s). See
Exchange Rule 100.
    \70\ The ``Response Time Interval'' means the period of time
during which responses to the Request for Responses (``RFR'') may be
entered. The RFR timer is 100 milliseconds. See MIAX Emerald
Regulatory Circular 2019-65, MIAX Emerald PRIME Timer Effective
August 26, 2019 (August 13, 2019) available at https://www.miaxoptions.com/sites/default/files/circular-files/MIAX_Emerald_RC_2019_65.pdf.
    \71\ When the Exchange receives a properly designated Agency
Order for auction processing, a RFR detailing the option, side,
size, and initiating price will be sent to all subscribers of the
Exchange's data feeds. See Exchange Rule 515A(a)(2)(i)(B).
    \72\ See Exchange Rule 515A(a)(2)(iii)(B).
    \73\ To be considered a priority quote, at the time of
execution, each of the following standards must be met: (A) the bid/
ask differential of a Market Maker's two-sided quote pair must be
valid width (no wider than the bid/ask differentials outlined in
Exchange Rule 603(b)(4)); (B) the initial size of both or the Market
Maker's bid and the offer must be in compliance with the
requirements of Exchange Rule 604(b)(2); (C) the bid/ask
differential of a Market Maker's two-sided quote pair must meet the
priority quote width requirements defined in Exchange Rule
517(b)(1)(ii) for each option; and (D) either of the following are
true: 1. At the time a locking or crossing quote or order enters the
System, the Market Maker's two-sided quote pair must be valid width
for that option and must have been resting on the Book; or 2.
Immediately prior to the time the Market Maker enters a new quote
that locks or crosses the EBBO, the Market Maker must have had a
valid width quote already existing (i.e., exclusive of the Market
Maker's new marketable quote or update) among his two-sided quotes
for that option. See Exchange Rule 517(b). The term ``EBBO'' means
the best bid or offer on the Exchange. See Exchange Rule 100.
    \74\ Exchange Rule 514(c)(2), Pro-Rata Allocation, states that,
under this method, resting quotes and orders on the Book are
prioritized according to price. If there are two or more quotes or
orders at the best price then the contracts are allocated
proportionally according to size (in a pro-rata fashion). If the
executed quantity cannot be evenly allocated, the remaining
contracts will be distributed one at a time based upon price-size-
time priority.
    \75\ See Exchange Rule 515A(a)(2)(iii)(C).
    \76\ The term ``Professional Interest'' means (i) an order that
is for the account of a person or entity that is not a Priority
Customer, or (ii) an order or non-priority quote for the account of
a Market Maker. See Exchange Rule 100.
    \77\ See Exchange Rule 515A(a)(2)(iii)(D).
---------------------------------------------------------------------------

    The Exchange now proposes to amend Exchange Rule 515A(a)(2)(iii)(C)
to adopt a new allocation for Market Maker priority quotes at the
conclusion of an Auction for an ISO PRIME order. The Exchange notes
that the proposed rule is identical to MIAX Options Exchange Rule
515A(a)(2)(iii)(C). The proposed rule text will state that, at the
conclusion of an Auction for an ISO PRIME order, the allocation of
Agency Orders at the final Auction price shall be: (i) to Market Makers
that traded in the associated ISO sweep, for up to the full size of
such Market Makers' refreshed priority quotes, as well as any RFR
responses submitted by those Market Makers; (ii) to those Market Makers
with quotes at the Auction start price that were resting and any RFR
responses submitted by those Market Makers at the final Auction price;
and (iii) to all other Market Makers that did not trade in the
associated ISO sweep and did not have resting quotes at the Auction
start price with joining interest at the final Auction price that was
submitted during the Auction. If two or more Market Makers are entitled
to priority under (i), (ii) or (iii) above, priority will be afforded
to the extent practicable on a pro-rata basis.
    This can be demonstrated in the following examples, which assume
away markets priced better than the auction start price have been
swept.

Example 1--(Current PRIME Allocation) Single Price Submission, Priority
Customer has first priority and Market Maker with priority quotes has
second priority

MM3 = $1.15 - $1.25 100 x 100 (priority quote) \78\
---------------------------------------------------------------------------

    \78\ The term ``priority quote'' has the meaning set forth in
Rule 517(b)(1)(i). See Exchange Rule 100. See also supra note 73.
---------------------------------------------------------------------------

EBBO = $1.15 - $1.25 100 x 100
NBBO = $1.15 - $1.25 200 x 200

Agency Order to buy 50 contracts with a limit price of $1.20
Initiating Member's Contra Order selling 50 contracts with a single
stop price of $1.20
RFR sent identifying the option, side and size, with initiating price
of $1.20
(Auction Starts)
 @10 milliseconds MM1 response received (did not have a
priority quote on the Book), AOC eQuote to Sell 10 at $1.18
 @30 milliseconds BD4 response received, AOC order to Sell 10
at $1.18
 @50 milliseconds Priority Customer response received, AOC
order to Sell 15 at $1.18
 @75 milliseconds MM3 response received, AOC eQuote to Sell 20
at $1.18
 100 milliseconds (Auction Ends)

    Under this scenario the Agency Order would be executed as follows:

1. 15 contracts trade with Priority Customer @$1.18
2. 20 contracts trade with MM3 @$1.18
3. 8 contracts trade with MM1 @$1.18
4. 7 contracts trade with BD4 @$1.18 (This fills the entire Agency
Order and Contra Order does not receive an execution)

Example 2--(Proposed ISO PRIME Allocation) Single Price Submission,
Priority Customer has first priority and Market Maker (who initially
traded as part of the associated ISO Sweep) with joining quotes at the
final Auction price has second priority

MM3 = $1.15 - $1.17 100 x 10 (priority quote)
EBBO = $1.15 - $1.17 100 x 10
NBBO = $1.15 - $1.17 300 x 210

    ISO PRIME Agency Order to buy 50 contracts with a limit price of
$1.20 is received.
    It will ISO Sweep resting liquidity priced better than the Auction
start price of $1.20.
    Under this scenario the Agency Order would be executed as follows:

1. 10 contracts trade with MM3 @1.17
Contemporaneously the balance of the ISO PRIME Agency Order initiates a
PRIME Auction to buy 40 contracts with a limit price of $1.20
Initiating Member's Contra Order selling 50 contracts with a single
stop price of $1.20
RFR sent identifying the option, side and size, with initiating price
of $1.20
(Auction Starts)
 @10 milliseconds MM1 response received, AOC eQuote to Sell 10
at $1.18
 @30 milliseconds BD4 response received, AOC order to Sell 10
at $1.18
 @40 milliseconds Priority Customer response received, AOC
order to Sell 15 at $1.18
 @65 milliseconds MM3 (who traded as part of the initial
sweep), response received, AOC eQuote to Sell 40 at $1.18
 100 milliseconds (Auction Ends)

    Under this scenario the Agency Order would be executed as follows:
2. 15 contracts trade with Priority Customer @$1.18
3. 25 contracts trade with MM3 @$1.18 (This fills the entire Agency
Order and Contra Order does not receive an execution)

Example 3--(Proposed ISO PRIME Allocation) Single Price Submission,
Market Maker who has a joining quote at a better price has priority and
Market Maker (who has a resting quote at the Auction start price) that
submits an RFR response at the final Auction price has priority

MM1 = $1.15 - $1.17 10 x 10 (priority quote)
MM2 = $1.15 - $1.20 20 x 20 (priority quote)
MM3 = $1.15 - $1.21 20 x 20 (priority quote)
EBBO = $1.15 - $1.17 50 x 10
NBBO = $1.15 - $1.17 150 x 110

    ISO PRIME Agency Order to buy 50 contracts with a limit price of
$1.20 is received.
    It will ISO Sweep resting liquidity priced better than the Auction
start price of $1.20.
    Under this scenario the Agency Order would be executed as follows:

1. 10 contracts trade with MM1 @$1.17
Contemporaneously the balance of the ISO PRIME Agency Order initiates a
PRIME Auction to buy 40 contracts with a limit price of $1.20
Initiating Member's Contra Order selling 50 contracts with a single
stop price of $1.20
RFR sent identifying the option, side and size, with initiating price
of $1.20
(Auction Starts)
 @10 milliseconds MM4 response received, AOC eQuote to Sell 30
at $1.18
 @30 milliseconds MM3 response received, AOC eQuote to Sell 20
at $1.19
 @75 milliseconds MM2 (who has a resting quote at the Auction
Start Price), response received, AOC eQuote to Sell 20 at $1.19
 100 milliseconds (Auction Ends)

    Under this scenario, the Agency Order would be executed as follows:

2. 30 contracts trade with MM4 @$1.18
3. 10 contracts trade with MM2 @$1.19 (This is the final Auction price
and fills the entire Agency Order and Contra Order and MM3 does not
receive an execution)

Example 4--(Proposed ISO PRIME Allocation) Single Price Submission,
Priority Customer has first priority and Market Maker (who initially
traded as part of an ISO Sweep) with joining quotes has second
priority, Market Maker with joining interest that is received during
the associated ISO PRIME Auction that did not trade in the associated
ISO sweep and did not have resting interest at the Auction start price
receives last priority among Market Makers

MM3 = $1.15 - $1.17 100 x 10 (priority quote)
EBBO = $1.15 - $1.17 100 x 10
NBBO = $1.15 - $1.17 300 x 210

    ISO PRIME Agency Order to buy 50 contracts with a limit price of
$1.20 is received.
    It will ISO Sweep resting liquidity priced better than the Auction
start price of $1.20.
    Under this scenario, the Agency Order would be executed as follows:

1. 10 contracts trade with MM3 @1.17
Contemporaneously, the balance of the ISO PRIME Agency Order initiates
a PRIME Auction to buy 40 contracts with a limit price of $1.20
Initiating Member's Contra Order selling 50 contracts with a single
stop price of $1.20
RFR sent identifying the option, side and size, with an initiating
price of $1.20
(Auction Starts)
 @10 milliseconds MM1 response received (did not have a
priority quote on the Book), AOC eQuote to Sell 20 at $1.18
 @30 milliseconds BD4 response received, AOC order to Sell 20
at $1.18
 @40 milliseconds Priority Customer response received, AOC
order to Sell 15 at $1.18
 @65 milliseconds MM3 (who traded as part of the initial
sweep), quote response received, AOC eQuote to Sell 20 at $1.18
 @100 milliseconds (Auction Ends)

    Under this scenario, the Agency Order would be executed as follows:

2. 15 contracts trade with Priority Customer @$1.18
3. 20 contracts trade with MM3 @$1.18
4. 3 contracts trade with MM1 @$1.18

5. 2 contracts trade with BD4 @$1.18 (This fills the entire Agency
Order and the Contra Order does not receive an execution)

    The Exchange believes this allocation methodology, used only for
Market Maker priority interest and only at the conclusion of an ISO
PRIME Auction, will provide an additional incentive for Market Makers
to provide their most aggressive quotes to the market throughout the
entire trading session. The proposed allocation methodology is
identical to MIAX Options Exchange Rule 515A(a)(2)(iii)(C).
    The Exchange also proposes to amend Rule 515A(a)(2)(iii)(J) which
currently states, notwithstanding (a)(2)(iii)(C), (D) above, if the
Auction does not result in price improvement over the Exchange's
disseminated price at the time the Auction began, resting unchanged
quotes or orders that were disseminated at the best price before the
Auction began shall have priority after any Priority Customer order
priority and the Initiating Member's priority (40%) have been
satisfied. The new proposed rule text will provide, notwithstanding
(a)(2)(iii)(C), (D) above, provided the Auction is not for an ISO PRIME
order, if the Auction does not result in price improvement over the
Exchange's disseminated price at the time the Auction began, resting
unchanged quotes or orders that were disseminated at the best price
before the Auction began shall have priority after any Priority
Customer order priority and the Initiating Member's priority (40%) have
been satisfied. The Exchange notes that the proposed rule is identical
to MIAX Options Exchange Rule 515A(a)(2)(iii)(J).
Implementation
    The Exchange will announce the implementation of these changes in a
Regulatory Circular to be published no later than 90 days following the
operative date of the proposed rule. The implementation date will be no
later than 90 days following the issuance of the Regulatory Circular.
2. Statutory Basis
i. cAOAO Order Type
    MIAX believes that its proposed rule change regarding adopting a
new Complex Auction-on-Arrival-Only (``cAOAO'') order type is
consistent with Section 6(b) of the Act \79\ in general, and furthers
the objectives of Section 6(b)(5) of the Act \80\ in particular, in
that it is designed 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 regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in, securities, to remove impediments to and
perfect the mechanisms of a free and open market and a national market
system and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \79\ 15 U.S.C. 78f(b).
    \80\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that its proposal to adopt a cAOAO order type
promotes just and equitable principles of trade, removes impediments to
and perfects the mechanisms of a free and open market and a national
market system and, in general, protects investors and the public
interest. The Exchange believes it is reasonable to provide an
opportunity for investors to seek to have their complex orders exposed
for an opportunity for price improvement and to also provide investors
the option to have such orders canceled if they are not filled. The
Exchange believes its proposal to amend other portions of Exchange Rule
518 to describe the operation and behavior of a cAOAO order benefits
investors and the public interest by providing information that
investors can use to ascertain the suitability of this order type in
relation to their investment objectives. Moreover, this proposed rule
change is identical to a rule change filed by the Exchange's affiliate,
MIAX Options to adopt a cAOAO order type.\81\
---------------------------------------------------------------------------

    \81\ See supra note 10.
---------------------------------------------------------------------------

    The Exchange believes its proposed rule change regarding a cAOAO
order type promotes just and equitable principles of trade and removes
impediments to and perfects the mechanisms of a free and open market
and a national market system and, in general, protects investors and
the public interest by providing an opportunity for investors to have
their complex orders exposed for an opportunity for price improvement.
Furthermore, the Exchange believes that it is appropriate to provide an
order type that will (i) initiate a complex auction if eligible, and
(ii) cancel the balance of such order if there is interest remaining at
the conclusion of the auction.
ii. Complex Attributable Order Type
    The Exchange believes that its proposed rule change regarding
adopting a new Complex Attributable Order type is consistent with
Section 6(b) of the Act \82\ in general, and furthers the objectives of
Section 6(b)(5) of the Act \83\ in particular, in that it is designed
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 regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in, securities, to remove impediments to and perfect the mechanisms of
a free and open market and a national market system and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------

    \82\ 15 U.S.C. 78f(b).
    \83\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes its proposal to adopt a Complex Attributable
Order promotes just and equitable principles of trade, and removes
impediments to and perfects the mechanisms of a free and open market
system and, in general, protects investors and the public interest by
introducing an order type for use on the complex market that is
currently available for use on the Exchange's simple market. Use of
Complex Attributable Orders will be voluntary and will provide Members
of the Exchange similar order types for use on both the simple market
and the complex market for use during liquidity seeking events to
facilitate executions. Additionally, this proposed rule change is
substantively identical to a rule change filed by the Exchange's
affiliate, MIAX Options to adopt a Complex Attributable Order type.\84\
---------------------------------------------------------------------------

    \84\ See supra note 24.
---------------------------------------------------------------------------

iii. Complex PRIME Through MPC
    The Exchange believes that its proposed rule change regarding
excluding cPRIME Orders from the Complex MIAX Emerald Price Collar
Protection (``MPC'') is consistent with Section 6(b) of the Act \85\ in
general, and furthers the objectives of Section 6(b)(5) of the Act \86\
in particular, in that it is designed 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 mechanisms of a free and open market and
a national market system and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------

    \85\ 15 U.S.C. 78f(b).
    \86\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes its proposal to exclude cPRIME Orders from
the MPC promotes just and equitable principles of trade, removes
impediments to and perfects the mechanisms of a free and open market
and a national market system, and in general, protects investors and
the public interest by

allowing otherwise eligible orders to benefit from submission to the
cPRIME mechanism. The Exchange believes that, if not excluded, the MPC
feature could unnecessarily impede certain transactions in this order
type that are submitted with contra-side participation and guaranteed
executions for the Agency side. The Agency side of a cPRIME Order is
effectively executed when received (and, in the case of cPRIME Orders,
subject to price improvement) because it is a paired order with a
guaranteed execution. The Exchange believes that accepting these
orders, rather than rejecting them, protects investors that have
established crossing orders at a specific execution price, and in the
case of cPRIME Orders, allows the opportunity for further price
improvement. Additionally, this proposed rule change is identical to a
rule change filed by the Exchange's affiliate, MIAX Options, which
excluded cPRIME Orders from MPC Protection.\87\
---------------------------------------------------------------------------

    \87\ See supra note 33.
---------------------------------------------------------------------------

iv. Complex Last To Fill
    The Exchange believes that its proposed rule change regarding last
priority in allocation for Initiating Members submitting cPRIME Agency
Orders is consistent with Section 6(b) of the Act \88\ in general, and
furthers the objectives of Section 6(b)(5) of the Act \89\ in
particular, in that it is designed 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 mechanisms of a free and open market and
a national market system and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------

    \88\ 15 U.S.C. 78f(b).
    \89\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that its proposal to allow Initiating Members
that submit cPRIME Agency Orders to the Exchange to elect to have last
priority in allocation promotes just and equitable principles of trade,
removes impediments to and perfects the mechanisms of a free and open
market and a national market system and, in general, protects investors
and the public interest by offering an additional allocation choice
which could result in an increase of cPRIME Agency Orders being
submitted to the Exchange. The Exchange believes offering last priority
in allocation gives the Initiating Member additional flexibility and
control over cPRIME Agency Orders which and may result in the
submission of more cPRIME Orders to the Exchange resulting in an
increase of price improvement opportunities.
    Additionally, this proposed rule change is identical to a rule
change filed by the Exchange's affiliate, MIAX Options, which removed
the provision that precluded last priority in allocation from being
available to Initiating Members that submit cPRIME Agency Orders.\90\
---------------------------------------------------------------------------

    \90\ See supra note 52.
---------------------------------------------------------------------------

v. ISO PRIME
    The Exchange believes that its proposed rule change regarding a new
ISO PRIME order is consistent with Section 6(b) of the Act \91\ in
general, and furthers the objectives of Section 6(b)(5) of the Act \92\
in particular, in that it is designed 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 regulating, clearing, settling, processing
information with respect to, and facilitating transactions in,
securities, to remove impediments to and perfect the mechanisms of a
free and open market and a national market system and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------

    \91\ 15 U.S.C. 78f(b).
    \92\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposed rule change promotes just and equitable principles of
trade and removes impediments to and perfects the mechanisms of a free
and open market in that it promotes competition as described below.
Specifically, the proposal allows the Exchange to offer its Members an
order type that is already offered by other exchanges.\93\ In addition,
the proposal benefits traders and investors because it adds a new order
type for seeking price improvement through the PRIME. ISO PRIME orders
will also be subject to all eligibility requirements that currently
apply to PRIME orders. The Initiating Member, simultaneous with the
routing of the ISO PRIME order to the Exchange, remains responsible for
(i) routing one or more ISOs, as necessary, to execute against the full
displayed size of any Protected Bid or Protected Offer that is superior
to the starting PRIME Auction price and (ii) sweeping all interest in
the Exchange's Book priced better than the proposed Auction starting
price. Finally, the proposal does not unfairly discriminate among
Members because all Members of the Exchange are eligible to submit an
ISO PRIME order.
---------------------------------------------------------------------------

    \93\ See Nasdaq ISE Exchange Rule, Options 3, Section 13,
Supplementary Material .08 (stating that a PIM ISO Order is the
transmission of two orders for crossing pursuant to this Rule
without regard for better priced Protected Bids or Protected Offers
(as defined in Options 5, Section 1) because the Member transmitting
the PIM ISO to the Exchange has, simultaneously with the routing of
the PIM ISO, routed one or more ISOs, as necessary, to execute
against the full displayed size of any Protected Bid or Protected
Offer that is superior to the starting PIM auction price and has
swept all interest in the Exchange's book priced better than the
proposed auction starting price); see also Interpretations and
Policies .08 of MIAX Options Exchange Rule 515A.
---------------------------------------------------------------------------

    The Exchange's proposal to amend Emerald Rule 515A(a)(2)(iii)(C) to
adopt a new allocation at the conclusion of an ISO PRIME Auction for
Market Maker priority quotes and RFR responses from Market Makers with
priority quotes, that participate in the associated ISO sweep, promotes
just and equitable principles of trade, perfects the mechanisms of a
free and open market and a national market system and, in general,
benefits investors as it provides an additional incentive to Market
Makers to provide their most aggressive quotes to the market at all
times. Prioritizing Market Maker interest such that Market Makers that
trade in the associated ISO sweep that also have joining interest at
the final Auction price receive first priority in allocation provides
an incentive to Market Makers to have their most aggressive quotes on
the Book in order to participate in any potential ISO sweeps.
    The Exchange's proposal does not change the existing allocation
priority for PRIME Auctions, and is narrowly tailored to allocation
priority only among Market Makers and only at the conclusion of a PRIME
Auction initiated by an ISO PRIME order. Additionally, the proposed
rule is identical to a rule change filed by the Exchange's affiliate,
MIAX Options, to adopt a new allocation methodology specifically for
Market Maker interest executed during an ISO PRIME Auction.\94\
---------------------------------------------------------------------------

    \94\ See supra note 55; see also MIAX Options Exchange Rule
515A(a)(2)(iii)(C).
---------------------------------------------------------------------------

    Additionally, the Exchange believes its proposal to amend Exchange
Rule 515A(a)(2)(iii)(J) to clarify that the subsection does not apply
to Auctions for ISO PRIME orders, promotes just and equitable
principles of trade, and removes impediments to and perfects the
mechanisms of a free and open market and a national market system and,
in general, protects investors and the public interest by removing any
ambiguity in the Exchange's Rulebook about the type of Auctions
subsection (J) pertains to. Current subsection (J) provides additional
clarifying language concerning the priority of allocations at the
conclusion of a PRIME Auction that does not result in price improvement

over the Exchange's disseminated price at the time the Auction began
stating that, ``resting unchanged quotes or orders that were
disseminated at the best price before the Auction began shall have
priority after any Priority Customer order priority. . . .'' \95\ The
Exchange's proposal concerning allocation at the conclusion of an
Auction for an ISO PRIME order provides a more nuanced and detailed
hierarchy of allocation for Market Makers which would be applicable in
the scenario contemplated by subsection (J). Therefore, the Exchange is
proposing to exclude the application of subsection (J) to Auctions that
are initiated by ISO PRIME orders. The Exchange believes this change
eliminates any potential conflict regarding the application of the
Exchange's rules and it is in the public interest for rules to be
accurate and concise so as to eliminate the potential for confusion.
The Exchange notes that the proposed rule is identical to MIAX Options
Exchange Rule 515A(a)(2)(iii)(J).
---------------------------------------------------------------------------

    \95\ See Exchange Rule 515A(a)(2)(iii)(J).
---------------------------------------------------------------------------

    The Exchange believes this change will benefit market participants
as it encourages Market Makers to participate in ISO PRIME Auctions and
will provide additional incentive to Market Makers to provide their
most aggressive quotes to the market throughout the trading session and
may also result in increased liquidity being available during the
Auction. Additionally, this proposed rule change is identical to a rule
change filed by Exchange's affiliate, MIAX Options, to adopt ISO PRIME
orders.\96\
---------------------------------------------------------------------------

    \96\ See supra note 55.
---------------------------------------------------------------------------

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.
(i) cAOAO Order Type
    The Exchange does not believe that the proposed rule change will
impose any burden on inter-market competition but will rather promote
inter-market competition as the Exchange is proposing an order type
that operates and is functionally identical to an order type offered on
other option exchanges.\97\ The Exchange notes that it operates in a
highly competitive market in which market participants can readily
direct order flow to competing venues who offer similar functionality.
The Exchange believes the proposed rule change will enhance competition
among the various markets for complex order execution, potentially
resulting in more active complex order trading on all exchanges.
Moreover, since the proposed rule change is identical to a rule change
filed by the Exchange's affiliate, MIAX Options,\98\ the Exchange does
not believe that its proposal will impose any burden on inter-market
competition as it would offer its Members similar functionality to that
of the Exchange's affiliate.
---------------------------------------------------------------------------

    \97\ See Nasdaq ISE Exchange Rule, Options 3, Section 14(b)(14)
which provides that, ``[a]n Exposure Only Complex Order is an order
that will be exposed upon entry . . . if eligible, or cancelled if
not eligible'' and ``[a]ny unexecuted balance of an Exposure Only
Complex Order remaining upon the completion of the exposure process
will be cancelled.''; see also MIAX Options Exchange Rule 518(b)(9).
    \98\ See supra note 10.
---------------------------------------------------------------------------

    The Exchange does not believe that the proposed rule change will
impose any burden on intra-market competition as the Rules of the
Exchange apply equally to all Exchange Members, and any Member of the
Exchange may use the cAOAO order type.
(ii) Complex Attributable Order Type
    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.
    The Exchange does not believe that the proposed rule change to
adopt a Complex Attributable Order will impose any burden on inter-
market competition but rather may increase competition among exchanges
as the Exchange is proposing an order type that operates and is
functionally identical to other options exchanges.\99\ The Exchange
notes that it operates in a highly competitive market in which market
participants can readily direct order flow to competing venues who
offer similar functionality. The Exchange believes the proposed rule
change will enhance competition among the various markets for complex
order execution, potentially resulting in more active complex order
trading on all exchanges. Moreover, since the proposed rule change is
substantively identical to a rule change filed by the Exchange's
affiliate, MIAX Options,\100\ the Exchange does not believe that its
proposal will impose any burden on inter-market competition as it would
offer its Members similar functionality to that of the Exchange's
affiliate.
---------------------------------------------------------------------------

    \99\ The Nasdaq ISE Exchange and Nasdaq MRX Exchange currently
offer Attributable Complex Orders. See Nasdaq ISE Exchange, Options
3, Section 14, Complex Orders (b)(4) (explaining that one of the
types of Complex Orders that may be entered is an Attributable
Complex Order, which is ``a Market or Limit Complex Order [that] may
be designated as an Attributable Order''); and Nasdaq MRX Exchange,
Options 3, Section 14, Complex Orders (b)(4) (explaining that one of
the types of Complex Orders that may be entered is an Attributable
Complex Order, which is ``a Market or Limit Complex Order [that] may
be designated as an Attributable Order''); see also MIAX Options
Exchange Rule 518(b)(8).
    \100\ See supra note 24.
---------------------------------------------------------------------------

    The Exchange does not believe that the proposed rule change to
adopt a Complex Attributable Order will impose any burden on intra-
market competition as use of a Complex Attributable Order will be
voluntary and all Members of the Exchange will have the option to use a
Complex Attributable Order when submitting a complex order to the
Exchange.
(iii) Complex PRIME Through MPC
    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.
    The Exchange believes that the proposal to exclude cPRIME Orders
from the Exchange's MPC price protection promotes inter-market
competition by enabling the Exchange to better compete for this type of
order flow with at least one other exchange that offers similar price
improvement auctions.\101\ Moreover, since the proposed rule change is
identical to a rule change filed by the Exchange's affiliate, MIAX
Options,\102\ the Exchange does not believe that its proposal will
impose any burden on inter-market competition as it would offer its
Members similar functionality to that of the Exchange's affiliate.
---------------------------------------------------------------------------

    \101\ See Cboe Exchange Rule 5.38
    \102\ See supra note 33.
---------------------------------------------------------------------------

    The Exchange does not believe that its proposal will impose any
burden on intra-market competition as all Members of the Exchange that
submit cPRIME Orders will benefit equally from the Exchange's proposal.
The proposed rule change is intended to promote competition and is
designed to benefit all Exchange participants by ensuring that
unnecessary price protections which would preclude executions on the
Exchange are removed, thus enabling Exchange participants to execute
more complex orders on the Exchange.
    For all the reasons stated, the Exchange does not believe that the
proposed rule change will impose any burden on competition not
necessary or appropriate in furtherance of the purposes of the Act, and
believes the proposed changes will in fact enhance competition.

(iv) Complex Last To Fill
    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.
    The Exchange does not believe that its proposal will impose any
burden on inter-market competition because the Exchange believes that
the proposal to offer a last in priority allocation option to
Initiating Members that submit cPRIME Agency Orders allows the Exchange
to compete with at least one other options exchange that offers
identical functionality.\103\ Moreover, since the proposed rule change
is identical to a rule change filed by the Exchange's affiliate, MIAX
Options,\104\ the Exchange does not believe that its proposal will
impose any burden on inter-market competition as it would offer its
Members similar functionality to that of the Exchange's affiliate, and
allow MIAX Emerald to compete with other exchanges that provide this
allocation option to exchange participants.
---------------------------------------------------------------------------

    \103\ See Cboe Exchange Rule 5.38(e)(5) (stating that if the
Initiating Trading Permit Holder selects a single-price submission,
it may elect for the Initiating Order to have last priority to trade
against the Agency Order and then notwithstanding the Price
Improvement provisions as laid out in subparagraphs (e)(1) and (2),
the System only executes the Initiating Order against any remaining
Agency Order contracts at the stop price after the Agency Order is
allocated to all other contra-side interest at all prices equal to
or better than the stop price).
    \104\ See supra note 52.
---------------------------------------------------------------------------

    The Exchange does not believe that its proposal will impose any
burden on intra-market competition as all Members of the Exchange that
submit cPRIME Orders will be able to elect last priority in allocation.
Offering Initiating Members that submit cPRIME Agency Orders an
additional allocation choice gives Members more flexibility and control
over their orders and may result in the submission of more cPRIME
Orders which would benefit competition on the Exchange.
    For all the reasons stated, the Exchange does not believe that the
proposed rule change will impose any burden on competition not
necessary or appropriate in furtherance of the purposes of the Act, and
believes the proposed changes will in fact enhance competition.
(v) ISO PRIME
    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. The Exchange believes the
proposed rule change will benefit inter-market competition as it will
allow the Exchange to compete with other markets that already allow an
ISO Order type in their price improvement mechanisms.\105\
---------------------------------------------------------------------------

    \105\ See supra note 93.
---------------------------------------------------------------------------

    The Exchange's proposal to adopt an ISO PRIME order type benefits
intra-market competition because it will enable the Exchange to provide
market participants with an additional method of seeking price
improvement through the PRIME. The Exchange does not believe that the
proposed rule change will impose any burden on intra-market competition
as the Rules of the Exchange apply equally to all Exchange Members, and
all Exchange Members may submit an ISO PRIME order.
    The Exchange does not believe its proposal to amend Exchange Rule
515A(a)(2)(iii)(C) to adopt a new allocation hierarchy to further
apportion Market Maker allocation at the conclusion of an Auction of an
ISO PRIME order will impose any burden on intra-market competition but
rather promotes intra-market competition as it provides a further
incentive to Market Makers to provide their most aggressive quotes to
the market throughout the entire trading session and may increase
liquidity available during a PRIME Auction. The proposal provides
Market Makers with priority quotes on the Book, that participate in an
associated ISO sweep, with priority over other Market Makers, which
benefits intra-market competition as it also provides an incentive to
Market Makers to provide their most aggressive quotes to the market
during the entire trading session to be in position to participate in
any potential ISO sweeps.
    The Exchange's proposal does not change existing order allocation
under Exchange Rule 515A(2)(iii) and the Exchange does not believe its
proposal will impose any burden on inter-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act, but
rather will promote inter-market competition as it provides an
additional incentive to Market Makers on the Exchange to provide their
most aggressive quotes to the market at all times, which could result
in tighter quotes and greater liquidity being available in the market
place, which would benefit all investors. Moreover, since the proposed
rule change is identical to a rule change filed by the Exchange's
affiliate, MIAX Options,\106\ the Exchange does not believe that its
proposal will impose any burden on inter-market competition as it would
offer its Members similar functionality to that of the Exchange's
affiliate.
---------------------------------------------------------------------------

    \106\ See supra note 52.
---------------------------------------------------------------------------

    The Exchange believes its proposal to amend Exchange Rule
515A(a)(2)(iii)(J) promotes just and equitable principles of trade and
removes impediments to and perfects the mechanism of a free and open
market and a national market system because the proposed rule change
provides additional detail and further clarifies the rule. The Exchange
does not believe its proposal is a burden on inter-market competition
as the change is not competitive in nature and only clarifies the
operation of the rule. Additionally, the Exchange does not believe its
proposal is a burden on intra-market competition as the Exchange's
rules apply equally to all Members, and any Member may submit an ISO
Prime order to the Exchange. Further, the Exchange believes the
proposed change adds additional detail to the Exchange's rules, and it
is in the public interest for rules to be clear and concise so as to
eliminate the potential for confusion.

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

    Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \107\ and
Rule 19b-4(f)(6) thereunder.\108\
---------------------------------------------------------------------------

    \107\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \108\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    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.

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 protected]. Please include
File Number SR-EMERALD-2022-25 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-EMERALD-2022-25. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (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-EMERALD-2022-25, and should be submitted
on or before August 18, 2022.
---------------------------------------------------------------------------

    \109\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\109\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-16148 Filed 7-27-22; 8:45 am]
BILLING CODE 8011-01-P


FLUTOLANIL 128975

Screening Level Usage Analysis (SLUA)

Date: January 25, 2008

What is a Screening Level Usage Analysis (SLUA)?

Available estimates of pesticide usage data for a particular active
ingredient that is used on agricultural crops in the United States.

Pesticide usage data obtained from various sources.  The data are then
merged, averaged, and rounded so that the presented information is not
proprietary, business confidential, or trade secret.

What does it contain?

Pesticide usage data for a single active ingredient only.

Agricultural use sites (crops) that the pesticide is reported to be used
on.

Available pesticide usage information from U.S. states that produce 80%
or more of a crop, in most cases, or less than 80%, in rare cases,
depending on the scope of the survey and available resources.

Annual percent of crop treated (average & maximum) for each agricultural
crop.

Average annual pounds of the pesticide applied for each agricultural
crop (i.e., for the states surveyed, not for the entire United States).

What assumptions can I make about the reported data?

Average pounds of active ingredient applied - Values are calculated by
merging pesticide usage data sources together; averaging across all
observations, then rounding.  Note:  If the estimated value is less than
500, then that value is labeled <500.  Estimated values between 500 &
<1,000,000 are rounded to 1 significant digit.  Estimated values of
1,000,000 or greater are rounded to 2 significant digits.)

Average percent of crop treated - Values are calculated by merging data
sources together; averaging by year, averaging across all years, &
rounding to the nearest multiple of 5.  Note:  If the estimated value is
less than 1, then the value is labeled <1.

Maximum percent of crop treated - Value is the single maximum value
reported across all data sources, across all years, & rounded up to the
nearest multiple of 5.  Note:  If the estimated value is less than 2.5,
then the value is labeled <2.5.

What are the data sources used?

USDA-NASS (United States Department of Agriculture’s National
Agricultural Statistics Service) – pesticide usage data from 2001 to
2006.

Private pesticide market research – pesticide usage data from 2001 to
2006.

NPUD 2002 (National Pesticide Use Database) pesticide usage data from
NPUD 02 of the CropLife Foundation are used only if data are not
available from the other sources.

California Department of Pesticide Regulation (DPR) Pesticide Use
Reporting (PUR) data for 2000 to 2005 when 95% or more of a crop is
grown California.

What are the limitations to the data?

Additional registered uses may exist but are not included because the
available surveys do not report usage (e.g., small acreage crops).

Lack of reported usage data for the pesticide on a crop does not imply
zero usage.

Usage data on a particular site may be noted in data sources, but not
quantified.  In these instances, the site would not be reported in the
SLUA.

Non-agricultural use sites (e.g., turf, post-harvest, mosquito control,
etc.) are not reported in the SLUA.  A separate request must be made to
receive these estimates.

Some sites show some use, even though they are not on the label.  This
usage could be due to various factors, including, but not limited to
Section 18 requests, existing stocks of the chemical, data collection
errors, and experimental use permits (EUPs).

FLR 10/24/2007

January 25, 2008

Screening Level Estimates of Agricultural Uses of FLUTOLANIL 128975

Sorted Alphabetically

		Crop				Lbs A.I.			Percent Crop Ttd.

	  	 								Avg.		Max.

	1 	Peanuts	60,000	5                   10

	2 	Potatoes	20,000	5                   10

	3 	Rice	3,000	<1               <2.5

	4 	Watermelons	2,000	<1               <2.5

______________________________________

All numbers rounded.

'<500' indicates less than 500 pounds of active ingredient.

'<2.5' indicates less than 2.5 percent of crop is treated.

'<1' indicates less than 1 percent of crop is treated.

SLUA data sources include:

	USDA-NASS (United States Department of Agriculture's National
Agricultural Statistics Service);

            2001-2006

	Private Pesticide Market Research, 2001-2006

	NPUD 2002 (National Pesticide Use Database) of the CropLife America
Foundation

	These results reflect amalgamated data developed by the Agency and are
releasable to the public.