[Federal Register Volume 81, Number 211 (Tuesday, November 1, 2016)]
[Notices]
[Pages 75885-75894]
[FR Doc No: 2016-26297]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79157; File No. SR-MIAX-2016-38]

Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule To Adopt Fees and
Credits for Transactions Involving Complex Orders

October 26, 2016.
    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 October 21, 2016, Miami
International Securities Exchange LLC (``MIAX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') a proposed
rule change as described in Items I, II, and III below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Options Fee
Schedule (the ``Fee Schedule'').
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.miaxoptions.com/filter/wotitle/rule_filing, at
MIAX's principal office, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its Fee Schedule to adopt fees and
credits for transactions involving complex orders. The Securities and
Exchange Commission (``SEC'' or ``Commission'') recently approved
Exchange rules \3\ that authorize and govern the trading of complex
orders \4\ on MIAX utilizing the MIAX System.\5\ Accordingly, the
Exchange is proposing to adopt certain fees and credits that will apply
to Exchange Members \6\ for transactions involving complex orders. All
complex order fees will be charged on a per contract per side basis.
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    \3\ See Securities Exchange Act Release No. 79072 (October 7,
2016), 81 FR 71131 (October 14, 2016) (SR-MIAX-2016-26).
    \4\ A ``complex order'' is any order involving the concurrent
purchase and/or sale of two or more different options in the same
underlying security (the ``legs'' or ``components'' of the complex
order), for the same account, in a ratio that is equal to or greater
than one-to-three (.333) and less than or equal to three-to-one
(3.00) and for the purposes of executing a particular investment
strategy. A complex order can also be a ``stock-option'' order,
which is an order to buy or sell a stated number of units of an
underlying security coupled with the purchase or sale of options
contract(s) on the opposite side of the market, subject to certain
contingencies set forth in the proposed rules governing complex
orders. See Securities Exchange Act Release No. 78620 (August 18,
2016), 81 FR 58770 (August 25, 2016) (SR-MIAX-2016-26).
    \5\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
    \6\ 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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Market Maker Transaction Fees
    Section (1)(a)(i) of the Fee Schedule sets forth the Exchange's
Market Maker Sliding Scale for Market Maker Transaction Fees (the
``Sliding Scale''). The Sliding Scale assesses a per contract
transaction fee on a Market Maker \7\ for the execution of simple
orders and quotes (collectively, ``simple orders''). The amount of the
transaction fee is based on the Market Maker's percentage of total
national market maker volume in an options class that trades on the
Exchange during a particular calendar month. The Sliding Scale applies
to all Market Makers for transactions in all products (except for mini-
options, for which there are separate product fees), with fees
established for option classes in the Penny Pilot Program \8\ (``penny
option classes'') and separate fees for non-penny option classes.
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    \7\ The term ``Market Makers'' refers to Lead Market Makers
(``LMMs''), Primary Lead Market Makers (``PLMMs''), and Registered
Market Makers (``RMMs'') collectively. See Exchange Rule 100. A
Directed Order Lead Market Maker (``DLMM'') and Directed Primary
Lead Market Maker (``DPLMM'') is a party to a transaction being
allocated to the LMM or PLMM and is the result of an order that has
been directed to the LMM or PLMM. See Fee Schedule note 2.
    \8\ See Securities Exchange Act Release No. 78080 (June 15,
2016), 81 FR 40377 (June 21, 2016) (SR-MIAX-2016-16).
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    The Exchange is proposing to use the same Sliding Scale structure
to establish per contract transaction fees for executions in complex
orders. More specifically, the Exchange is proposing to use the same
tiers and percentage thresholds that it uses for the execution of
simple orders for the execution of complex orders and quotes
(collectively, ``complex orders''), and will aggregate the volume
executed by Market Makers in both simple orders and complex orders for
purposes of determining the applicable tier and corresponding per
contract transaction fee amount.\9\
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    \9\ The calculation of the volume thresholds does not include
QCC Orders, PRIME AOC Responses, and PRIME Participating Quotes or
Orders. For a discussion of these exclusions, see Securities
Exchange Act Release No. 78299 (July 12, 2016), 81 FR 46734 (July
18, 2016) (SR-MIAX-2016-20).
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    Since the Exchange will aggregate the number of contracts executed
in both simple orders and complex orders in its calculation of the
Market Maker's relevant tier, Market Maker transaction fees in both
simple orders and complex orders will be incrementally reduced once the
Market Maker reaches a higher tier. The Exchange believes that
aggregating simple and complex volume will provide a direct benefit to
Market Makers, because it provides Market Makers with enhanced
potential to lower their incremental transaction fees on the Exchange.
Furthermore, it should encourage Market Makers to provide complex order
liquidity on the Exchange because their executed volume in complex
orders will enhance their ability to achieve discounted transaction
fees in simple orders.
    Since the Exchange provides discounted transaction fees for Members
and their qualified Affiliates that achieve certain volume thresholds
through the submission of Priority Customer \10\ orders under the
Exchange's Priority Customer Rebate Program (``PCRP''),\11\ the Sliding
Scale contains two tables: One setting forth the transaction fees
applicable to Members and their Affiliates \12\ that are in PCRP volume
Tier 3 or higher; and the other setting forth the transaction fees
applicable to Members and their Affiliates that are not in PCRP volume

Tier 3 or higher. The Exchange is proposing to maintain that same, two
table construct, and establish a per contract transaction fee for
complex orders per tier level. Although the proposed per transaction
fees for complex orders will be included in both tables (i.e., one for
Members and their Affiliates that are in PCRP volume Tier 3 or higher
and the other for Members and their Affiliates that are not in PCRP
volume Tier 3 or higher), the per contract fees for complex orders will
be the same in each table. Furthermore, the Exchange is not proposing a
different maker and taker fee in each tier for complex orders. Instead,
the Exchange will assess one per contract fee for complex orders in
each tier for penny option classes, and one per contract fee for
complex orders in non-penny option classes, with a surcharge for
removing liquidity, as described below. The Exchange believes that,
with respect to transaction fees for complex orders, it is appropriate
to distinguish between (and thus have different transaction fee amounts
for) penny option classes and non-penny option classes, as is the case
with the current Fee Schedule for transaction fees for simple orders.
Accordingly, the Exchange is proposing separate per contract
transaction fees for penny option classes and non-penny option classes
for complex orders. Specifically, the Exchange would charge a Market
Maker a per contract fee in penny option classes of: $0.25 in Tier 1,
$0.19 in Tier 2, $0.12 in Tier 3, $0.07 in Tier 4, $0.05 in Tier 5. The
Exchange would charge a Market Maker a per contract fee in non-penny
option classes of: $0.29 in Tier 1, $0.23 in Tier 2, $0.16 in Tier 3,
$0.11 in Tier 4, $0.09 in Tier 5.
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    \10\ 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). A
``Priority Customer Order'' means an order for the account of a
Priority Customer. See Exchange Rule 100.
    \11\ Under the PCRP, MIAX credits each Member the per contract
amount resulting from each Priority Customer order transmitted by
that Member which is executed electronically on the Exchange in all
multiply-listed option classes (excluding QCC Orders, mini-options,
Priority Customer-to-Priority Customer Orders, PRIME AOC Responses,
PRIME Contra-side Orders, PRIME Orders for which both the Agency and
Contra-side Order are Priority Customers, and executions related to
contracts that are routed to one or more exchanges in connection
with the Options Order Protection and Locked/Crossed Market Plan
referenced in MIAX Rule 1400), provided the Member meets certain
percentage thresholds in a month as described in the Priority
Customer Rebate Program table. See Fee Schedule, Section
(1)(a)(iii).
    \12\ For purposes of the MIAX Options Fee Schedule, the term
``Affiliate'' means an affiliate of a Member of at least 75% common
ownership between the firms as reflected on each firm's Form BD,
Schedule A (``Affiliate''). See Fee Schedule note 1.
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    The proposed Market Maker transaction fees are generally in line
with the Market Maker transaction fees charged by other exchanges for
executing complex orders.\13\ The Exchange believes that the proposed
transaction fees for complex orders are reasonable, and have been set
at an initial level that is favorable to Market Makers and are designed
to encourage Market Makers to provide complex order liquidity on the
Exchange.
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    \13\ See, e.g., CBOE Fees Schedule Options Transaction Fees;
NASDAQ PHLX LLC (``Phlx'') Pricing Schedule, Section II;
International Securities Exchange LLC (``ISE'') Schedule of Fees,
Section II.
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    For simple orders, the Sliding Scale assesses a per contract
transaction fee, which is based upon whether the Market Maker is a
``maker'' or a ``taker.'' \14\ As an incentive for Market Makers to
provide liquidity on the Exchange, the Exchange's ``maker'' fees are
lower than the ``taker'' fees. The Exchange is not proposing to
distinguish between a ``maker'' and a ``taker'' for complex order
executions as it does in the traditional construct for simple orders.
Rather, the Exchange proposes to adopt a surcharge of $0.08 per
executed contract for executions in complex orders assessed to a Market
Maker and all other market participants except Priority Customers when
it removes liquidity by trading against a Priority Customer order that
is resting on the Strategy Book.\15\ Market Maker complex orders
resting on the Strategy Book before executing against a Priority
Customer order would not be assessed the $0.08 per contract surcharge,
as reflected in the below tables. The Exchange believes that this $0.08
surcharge is a reasonable alternative to the maker/taker pricing
structure in place for simple orders, and is substantially similar in
structure and amount to a CBOE surcharge of the same type.\16\
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    \14\ See Securities Exchange Act Release No. 78519 (August 9,
2016), 81 FR 54162 (August 15, 2016) (SR-MIAX-2016-21).
    \15\ The ``Strategy Book'' is the Exchange's electronic book of
complex orders and complex quotes. See Exchange Rule 518(a)(17).
    \16\ See CBOE Fees Schedule, Complex Taker Fee, and note 35. The
Exchange notes that, although its base fee is slightly higher (with
a similar complex fee approach), the Exchange believes that this is
fair and equitable because the Exchange offers technology with
unique risk mitigation features not available elsewhere, such as the
Implied Away Best Bid or Offer (``ixABBO'') Price Protection. See
Exchange Rule 518.05(d).
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    All fees assessed under the Sliding Scale will be assessed on a per
contract/per side basis. The fees will apply to complex orders when
those complex orders are matched against other complex orders on the
Strategy Book, and will also apply, to the complex side of the trade,
when they leg into and match against simple orders in the simple order
book. Additionally, for the avoidance of doubt, when legging into the
simple order book, the contracts that were entered directly in to the
simple order book will be subject to all standard transaction fees,
marketing fees, rebates, and credits, as set forth in the Exchange's
Fee Schedule and as applicable to simple orders.
    The revised Market Maker Sliding Scale tables proposed by the
Exchange will be as follows (with new text in italics):

                              Members and Their Affiliates \17\ In Priority Customer Rebate Program Volume Tier 3 or Higher
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Simple                                 Complex
                                                                          ------------------------------------------------------------------------------
                                                                            Per contract fee    Per contract fee                          Per contract
                                                                            for penny classes     for non-penny                          surcharge for
                                                                          --------------------       classes                    Per         removing
                                                                                --------------------    Per    contract  liquidity against
                                         Tier      Percentage thresholds                                           contract   fee for      a resting
                                                                                fee for    non-    priority customer
                                                                            Maker *    Taker                         penny     penny    complex order on
                                                                                Maker *    Taker    classes   classes  the strategy book
                                                                                for penny and non-
                                                                                penny classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              1  0.00%-0.075%............     $0.21     $0.23     $0.25     $0.30     $0.25     $0.29              $0.08
                                              2  Above 0.075%-0.60%......     $0.15     $0.22     $0.19     $0.27     $0.19     $0.23              $0.08
All MIAX Market Makers...............         3  Above 0.60%-1.00%.......     $0.08     $0.15     $0.12     $0.20     $0.12     $0.16              $0.08
                                              4  Above 1.00%-1.50%.......     $0.04     $0.06     $0.08     $0.12     $0.07     $0.11              $0.08
                                              5  Above 1.50%.............     $0.02     $0.04     $0.06     $0.10     $0.05     $0.09              $0.08
--------------------------------------------------------------------------------------------------------------------------------------------------------

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    \17\ For purposes of the MIAX Options Fee Schedule, the term
``Affiliate'' means an affiliate of a Member of at least 75% common
ownership between the firms as reflected on each firm's Form BD,
Schedule A (``Affiliate'').

                              Members and Their Affiliates Not In Priority Customer Rebate Program Volume Tier 3 or Higher
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Simple                                  Complex
                                                                        --------------------------------------------------------------------------------
                                                                          Per contract fee    Per contract fee                           Per contract
                                                                          for penny classes     for non-penny                           surcharge for
                                                                        --------------------       classes          Per       Per     removing liquidity
                                        Tier     Percentage thresholds                      -------------------- contract  contract   against a resting
                                                                                fee for   fee for   priority customer
                                                                                penny     non-      complex order on
                                                                          Maker *    Taker    Maker *    Taker    classes    penny    the strategy book
                                                                                classes   for penny and non-
                                                                                penny classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             1  0.00%-0.075%...........     $0.23     $0.25     $0.27     $0.32     $0.25     $0.29                $0.08
                                             2  Above 0.075%-0.60%.....     $0.17     $0.24     $0.21     $0.29     $0.19     $0.23                $0.08
All MIAX Market Makers..............         3  Above 0.60%-1.00%......     $0.10     $0.17     $0.14     $0.22     $0.12     $0.16                $0.08
                                             4  Above 1.00%-1.50%......     $0.06     $0.08     $0.10     $0.14     $0.07     $0.11                $0.08
                                             5  Above 1.50%............     $0.04     $0.06     $0.08     $0.12     $0.05     $0.09                $0.08
--------------------------------------------------------------------------------------------------------------------------------------------------------

Other Market Participant Transaction Fees
    Section (1)(a)(ii) of the Fee Schedule sets forth, in a single
table format, transaction fees for Other Market Participants, including
Priority Customers, Public Customers \18\ that are not Priority
Customers, non-MIAX Market Makers, non-Member Broker-Dealers, and Firms
\19\ (the ``Fee Table''). The Fee Table currently assesses on
participants that are non-MIAX Market Makers a per contract transaction
fee for simple order executions. The Fee Table applies to the listed
participants for transactions in all products (except mini-options, for
which there are separate product fees), with fees established for penny
option classes and separate fees for non-penny option classes.
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    \18\ The term ``Public Customer'' means a person that is not a
broker or dealer in securities. See Exchange Rule 100.
    \19\ A ``Firm'' fee is assessed on a MIAX Electronic Exchange
Member ``EEM'' that enters an order that is executed for an account
identified by the EEM for clearing in the Options Clearing
Corporation (``OCC'') ``Firm'' range. See Fee Schedule, Section
(1)(a)(ii).
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    The Exchange is proposing to use the same Fee Table structure to
establish per contract transaction fees for executions in complex
orders. The Exchange is also proposing to assess the same per-contract
transaction fee amounts that are set forth in the Fee Table for
execution of simple orders for the execution of complex orders. Thus,
as proposed, a participant would be charged the same fee per contract
for executing a complex order as it would for executing a simple order
for the same option class for the same participant type. Accordingly,
the Exchange would charge a Member: $0.00 per contract per complex
order executed in both penny option classes and non-penny option
classes for a Priority Customer; $0.47 per contract per complex order
executed in a penny option class for a Public Customer that is not a
Priority Customer, for a non-MIAX Market Maker, and for a non-Member
Broker-Dealer (and $0.75 per contract per complex order executed in a
non-penny option class for each of those participant types); $0.45 per
contract per complex order executed in a penny option class for a Firm
(and $0.75 per contract per complex order executed in a non-penny
option class for a Firm). The Exchange believes that the proposed fees
for complex orders are reasonable and appropriate because they apply to
all similarly situated participants equally. The Exchange's proposal to
assess the same fees for simple and complex orders to other market
participants (listed in Section (1)(a)(ii) of the Fee Schedule) for
complex orders is reasonable and not unfairly discriminatory because
the fees apply equally to all similarly situated market participants.
Just as with the current fees assessed for simple orders in Section
(1)(a)(ii), the PCRP tier discounts will not apply to these
participants because Market Makers, who qualify for the discounts, have
quoting and other obligations that these other market participants do
not have, and the Exchange believes that the PCRP tier discounts are
thus equitable and not unfairly discriminatory.\20\
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    \20\ The Commission notes that the Exchange currently offers a
discount to the standard option transaction fees for simple orders
for Members that qualify for the PCRP volume Tier 3 or higher in
Section (1)(a)(ii). The Exchange is not proposing to offer that
discount to the standard option transaction fees for complex orders.
See footnotes 4, 5, and 8-13 in Section (1)(a)(ii) of the Fee
Schedule.
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    The Exchange also proposes to assess the same $0.08 per contract
surcharge that it assesses on Market Makers for removing liquidity
against a resting Priority Customer on the Strategy Book on other
market participants, specifically: (i) Public Customers that are not
Priority Customers; (ii) non-MIAX Market Makers; (iii) non-Member
Broker-Dealers; and (iv) Firms. The purpose of this proposed surcharge
is to encourage Members to add liquidity to the Strategy Book, and to
recoup costs associated with the execution of complex orders on the
Strategy Book. Moreover, the Exchange believes that the proposed fee
structure may also narrow the MIAX Bid and Offer (``MBBO'') on the
Strategy Book because assessing the surcharge only on participants
removing liquidity effectively subsidizes, and thus encourages, the
posting of liquidity. The Exchange believes that this fee structure
will also provide MIAX Market Makers with greater incentive to either
match or improve upon the best price displayed on the Strategy Book,
all to the benefit of investors and the public in the form of improved
execution prices.
    The revised Fee Table proposed by the Exchange will be as follows:

                                    Other Market Participant Transaction Fees
----------------------------------------------------------------------------------------------------------------
                                   Standard Options      Per Contract       Mini Options
                                    Transaction Fee     Surcharge for      Transaction Fee
                                    for Simple and         Removing         (per executed
                                    Complex Orders    Liquidity Against       contract)        These fees will
      Types of Other Market          (per executed        a Resting     -------------------- apply to all option
          Participants                 contract)      Priority Customer                       classes  traded on
                                 --------------------  Complex Order on              Non-            MIAX
                                              Non-    the Strategy Book    Penny     Penny
                                    Penny     Penny   for Penny and Non-  Classes   Classes
                                   Classes   Classes    Penny  Classes
----------------------------------------------------------------------------------------------------------------
Priority Customer...............     $0.00     $0.00              $0.00    $0.000    $0.000  There is no fee
                                                                                assessed to an
                                                                                Electronic
                                                                                Exchange Member
                                                                                (an ``EEM,'' as
                                                                                defined in MIAX
                                                                                Rule 100) that
                                                                                enters an order
                                                                                that is executed
                                                                                for the account of
                                                                                a Priority
                                                                                Customer.
Public Customer that is Not a        $0.47     $0.75              $0.08     $0.05     $0.07  This fee is
 Priority Customer.                                                                           assessed to an EEM
                                                                                that enters an
                                                                                order that is
                                                                                executed for the
                                                                                account of a
                                                                                Public Customer
                                                                                \21\ that does not
                                                                                meet the criteria
                                                                                for designation as
                                                                                a Priority
                                                                                Customer. This fee
                                                                                will also be
                                                                                charged to an EEM
                                                                                that enters an
                                                                                order for the
                                                                                account of a
                                                                                Public Customer
                                                                                that has elected
                                                                                to be treated as a
                                                                                Voluntary
                                                                                Professional.\22\
Non-MIAX Market Maker...........     $0.47     $0.75              $0.08    $0.045     $0.07  This fee is
                                                                                assessed to an EEM
                                                                                that enters an
                                                                                order that is
                                                                                executed for the
                                                                                account of a non-
                                                                                MIAX market maker.
                                                                                A non-MIAX market
                                                                                maker is a market
                                                                                maker registered
                                                                                as such on another
                                                                                options exchange.
Non-Member Broker-Dealer........     $0.47     $0.75              $0.08    $0.045     $0.07  This fee is
                                                                                assessed to an EEM
                                                                                that enters an
                                                                                order that (i) is
                                                                                executed for the
                                                                                account of a non-
                                                                                Member Broker-
                                                                                Dealer, and (ii)
                                                                                is identified by
                                                                                the EEM for
                                                                                clearing in the
                                                                                Options Clearing
                                                                                Corporation
                                                                                (``OCC'')
                                                                                ``customer''
                                                                                range. A non-
                                                                                Member Broker-
                                                                                Dealer is a broker-
                                                                                dealer that is not
                                                                                a member of the
                                                                                OCC, and that is
                                                                                not registered as
                                                                                a Member at MIAX
                                                                                or another options
                                                                                exchange.
Firm............................     $0.45     $0.75              $0.08     $0.04     $0.07  This fee is
                                                                                assessed to an EEM
                                                                                that enters an
                                                                                order that is
                                                                                executed for an
                                                                                account identified
                                                                                by the EEM for
                                                                                clearing in the
                                                                                OCC ``Firm''
                                                                                range.
----------------------------------------------------------------------------------------------------------------

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    \21\ The term ``Public Customer'' means a person that is not a
broker or dealer in securities. See Exchange Rule 100.
    \22\ The term ``Voluntary Professional'' means any Public
Customer that elects, in writing, to be treated in the same manner
as a broker or dealer in securities for purposes of Rule 514, as
well as the Exchange's schedule of fees. See Exchange Rule 100.
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    The Exchange currently offers a discount to the standard option
transaction fees for simple orders for Members that qualify for the
PCRP volume Tier 3 or higher. The Exchange is not proposing to offer
that discount to the standard option transaction fees for complex
orders. Thus, the Exchange is proposing to amend Footnotes 4, 5, and 8-
13 in Section (1)(a)(ii) of the Fee Schedule to explicitly state that
these discounts only apply for standard options in simple order
executions. Additionally, pursuant to Footnote 8 of the Fee Schedule,
the Exchange currently assesses Members a $0.48 per contract
transaction fee (and a $0.50 per contract transaction fee for non-MIAX
market makers) for transactions that occur on or after September 1,
2016 and extending through October 31, 2016 in options overlying EEM,
GLD, IWM, QQQ, and SPY. The Exchange is not proposing to apply that
transaction fee to complex orders. Thus, the Exchange is proposing to
further amend Footnote 8 in Section (1)(a)(ii) of the Fee Schedule to
explicitly state that such fees only apply for standard options in
simple order executions.
Priority Customer Rebate Program
    The Exchange also proposes to amend the PCRP contained in Section
1)a)iii) of the Fee Schedule by adopting per contract credits for
complex orders. Currently, with respect to simple orders, the Exchange
credits each Member the per contract amount set forth in the table
below resulting from each Priority Customer order transmitted by that
Member which is executed electronically on the Exchange in all
multiply-listed option classes (excluding QCC Orders, mini-options,
Priority Customer-to-Priority Customer Orders, PRIME AOC Responses,
PRIME Contra-side Orders, PRIME Orders for which both the Agency and
Contra-side Order are Priority Customers, and executions related to
contracts that are routed to one or more exchanges in connection with
the Options Order Protection and Locked/Crossed Market Plan referenced
in MIAX Rule 1400), provided the Member meets certain volume thresholds
in a month as described below. The volume thresholds are calculated
based on the customer average daily volume over the course of the
month. Volume is recorded for and credits are delivered to the Member
that submits the order to the Exchange. The Exchange proposes to extend
this per contract credit to executions in complex orders.
    The Exchange proposes to apply the same volume tier thresholds in
the PCRP for complex orders that it

currently applies to simple orders. In the same manner that the
Exchange proposes to aggregate simple order volume and complex order
volume of Market Makers towards the volume tiers in the Sliding Scale,
the Exchange proposes to aggregate contract volume for both simple and
complex orders in the calculation of the PCRP volume tier threshold
applicable to each transaction, and to effect the same exclusions for
transactions involving both simple and complex orders, as applicable,
with respect to the PCRP volume tier calculation.\23\
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    \23\ MIAX excludes contracts executed as part of QCC Orders,
mini-options, Priority Customer-to-Priority Customer Orders, PRIME
Agency Orders, PRIME AOC Responses, PRIME Contra-side Orders, PRIME
Orders for which both the Agency and Contra-side Order are Priority
Customers, and executions related to contracts that are routed to
one or more exchanges in connection with the Options Order
Protection and Locked/Crossed Market Plan referenced in MIAX Rule
1400 from this calculation. See Fee Schedule Section 1)a)iii.
---------------------------------------------------------------------------

    The Exchange proposes to distinguish the amount of the proposed per
contract credits in the PCRP for complex orders from the credits
currently available to simple orders, except for Tier 1 transactions,
for which there would be a $0.00 per contract credit for both simple
and complex orders. The proposed per contract credits for complex
orders would be: $0.21 for PCRP Tier 2 transactions; $0.24 for PCRP
Tier 3 transactions, and $0.25 for PCRP Tier 4 transactions,
respectively. The proposed per contract credits for complex orders are
greater than the current per contract credits for simple orders. As a
new entrant in the complex order marketplace, the Exchange believes
that it is appropriate to establish aggressive per contract credits in
order to attract order flow in this new segment of the Exchange.
    For simple orders, the Exchange currently assesses different PCRP
credit amounts for executions in the MIAX Select Symbols \24\ versus
non-MIAX Select Symbols. The PCRP table in the Fee Schedule will
reflect these different credits in simple orders for MIAX Select
Symbols versus non-MIAX Select Symbols. The Exchange, however, does not
believe it is necessary at this time to distinguish the amount of the
proposed PCRP credits for executions in the MIAX Select Symbols versus
non-MIAX Select Symbols for complex orders, and thus the per contract
credit for complex orders will be the same for transactions involving
complex orders in both MIAX Select Symbols and non-MIAX Select Symbols.
---------------------------------------------------------------------------

    \24\ The term ``MIAX Select Symbols'' means options overlying
AA, AAL, AAPL, AIG, AMAT, AMD, AMZN, BA, BABA, BBRY, BIDU, BP, C,
CAT, CBS, CELG, CLF, CVX, DAL, EBAY, EEM, FB, FCX, GE, GILD, GLD,
GM, GOOGL, GPRO, HAL, HTZ, INTC, IWM, JCP, JNJ, JPM, KMI, KO, MO,
MRK, NFLX, NOK, NQ, ORCL, PBR, PFE, PG, QCOM, QQQ, RIG, S, SPY,
SUNE, T, TSLA, USO, VALE, VXX, WBA, WFC, WMB, WY, X, XHB, XLE, XLF,
XLP, XOM, XOP and YHOO. See Fee Schedule note 14.
---------------------------------------------------------------------------

    The Exchange is not proposing to establish at this time a price
improvement mechanism for complex orders, such as the Exchange has for
simple orders, known as MIAX PRIME.\25\ Thus, the Exchange proposes to
amend the narrative portion of Section 1)a)iii) to state that, for each
Priority Customer order submitted into a PRIME auction as a PRIME
agency simple order, MIAX shall credit each Member at the separate per
contract rate for PRIME agency simple orders; however, no rebates will
be paid if the PRIME agency simple order executes against a contra-side
order which is also a Priority Customer. The purpose of this proposed
amendment is to explicitly state that these provisions apply only to
simple orders, and not to complex orders.
---------------------------------------------------------------------------

    \25\ The MIAX Price Improvement Mechanism (``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. See Exchange Rule 515A.
---------------------------------------------------------------------------

    The Exchange currently credits each MIAX ``Qualifying Member'' \26\
$0.03 per contract (except exclusions) \27\ resulting from each
Priority Customer order that falls within the PCRP volume Tier 1, as
set forth below. The Exchange believes that it is appropriate to extend
this credit to complex orders. Thus, the Exchange proposes to amend the
narrative portion of Section 1)a)iii) to state that such credits will
apply to both simple and complex order executions.
---------------------------------------------------------------------------

    \26\ A ``Qualifying Member'' is a Member or its Affiliate that
qualifies for the Professional Rebate Program and achieves a volume
increase in excess of 0.065% for Professional orders transmitted by
that Member which are executed electronically on the Exchange in all
multiply-listed option classes for the account(s) of a Professional
and which qualify for the Professional Rebate Program during a
particular month relative to the applicable Baseline Percentage (as
defined under the Professional Rebate Program).
    \27\ MIAX excludes contracts executed as part of QCC Orders,
mini-options, Priority Customer-to-Priority Customer Orders, PRIME
Agency Orders, PRIME AOC Responses, PRIME Contra-side Orders, PRIME
Orders for which both the Agency and Contra-side Order are Priority
Customers, and executions related to contracts that are routed to
one or more exchanges in connection with the Options Order
Protection and Locked/Crossed Market Plan referenced in MIAX Rule
1400 from this credit. See Fee Schedule Section 1)a)iii.
---------------------------------------------------------------------------

    The revised PCRP table proposed by the Exchange will be as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Percentage  thresholds of      Per contract    Per contract
                                                           national customer  volume in     credit for      credit for     Per contract    Per contract
                    Origin                       Tier        multiply- listed options      simple orders   simple orders    credit for      credit for
                                                             classes listed on  MIAX        in non-MIAX   in MIAX select   prime agency   complex orders
                                                                    (monthly)             select symbols      symbols          order
--------------------------------------------------------------------------------------------------------------------------------------------------------
Priority Customer............................         1  0.00%-0.50%....................           $0.00           $0.00           $0.10           $0.00
                                                      2  Above 0.50%-1.20%..............            0.10            0.10            0.10            0.21
                                                      3  Above 1.20%-1.75%..............            0.15            0.20            0.10            0.24
                                                      4  Above 1.75%....................            0.21            0.24            0.10            0.25
--------------------------------------------------------------------------------------------------------------------------------------------------------

Professional Rebate Program
    Under the Professional Rebate Program (``PRP''), the Exchange
credits each Member the per contract amount listed in the table below
resulting from any contracts executed from an order submitted by a
Member for the account(s) of a (i) Public Customer that is not a
Priority Customer; (ii) non-MIAX Market Maker; (iii) non-Member Broker-
Dealer; or (iv) Firm (for purposes of the Professional Rebate Program,
``Professionals''). The Exchange proposes to amend Section 1)a)iv) of
the Fee Schedule to include per contract credits for complex orders in
the Exchange's PRP.
    The PRP affords a per contract credit based upon the increase in
the total volume submitted by a Member and executed for the account(s)
of a Professional on MIAX (not including Excluded Contracts) \28\
during a

particular month as a percentage of the total volume reported by the
Options Clearing Corporation (``OCC'') in MIAX classes during the same
month (the ``Current Percentage''), less the total volume submitted by
that Member and executed for the account(s) of a Professional on MIAX
(not including Excluded Contracts), during the fourth quarter of 2015
as a percentage of the total volume reported by OCC in MIAX classes
during the fourth quarter of 2015 (the ``Baseline Percentage''). The
Exchange proposes to use the same volume tier thresholds for complex
orders that it currently uses for simple orders, and proposes the
following per contract credits to Public Customers that are not a
Priority Customer, or are a non-MIAX market maker, non-Member broker-
dealer, or Firm: (i) $0.03 Per contract for contracts executed in Tier
1; (ii) $0.05 per contract for contracts executed in Tier 2; and (iii)
$0.07 per contract for contracts executed in Tier 3. The current
credits for contracts that are part of simple orders will remain
unchanged, and the amended table in Section 1(a)iv) will include
separate columns, one indicating the credits applicable to contracts
from simple orders, and the other indicating the credits applicable to
contracts from complex orders. Additionally, proposed amended Section
1)a)iv) will include a clarifying statement that volume for
transactions in both simple and complex orders will be aggregated to
determine the appropriate volume tier threshold applicable to each
transaction.
---------------------------------------------------------------------------

    \28\ Excluded Contracts are any contracts executed as mini-
options, Non-Priority Customer-to-Non-Priority Customer Orders, QCC
Orders, PRIME Orders, PRIME AOC Responses, PRIME Contra-side Orders,
and executions related to contracts that are routed to one or more
exchanges in connection with the Options Order Protection and
Locked/Crossed Market Plan referenced in MIAX Rule 1400.
---------------------------------------------------------------------------

    The revised PRP table proposed by the Exchange will be as follows:

                                           Professional Rebate Program
----------------------------------------------------------------------------------------------------------------
                                                        Percentage thresholds of
                                                           volume increase in      Per contract    Per contract
                                                         multiply-listed options  credit (except  credit (except
 Type of market participants eligible        Tier           (except excluded         excluded        excluded
              for rebate                                   contracts) for the     contracts) for  contracts) for
                                                         current month compared    simple orders  complex orders
                                                         to fourth quarter 2015
----------------------------------------------------------------------------------------------------------------
Public Customer that is Not a Priority               1  Above 0.00%-0.005%......           $0.10           $0.03
 Customer.
Non-MIAX Market Maker.................               2  Above 0.005%-0.020%.....            0.15            0.05
Non-Member Broker-Dealer Firm.........               3  Above 0.020%............            0.20            0.07
----------------------------------------------------------------------------------------------------------------

Marketing Fee
    Section 1)b) of the Fee Schedule describes Marketing Fees assessed
on all Market Makers for contracts, including mini options, they
execute in their assigned classes when the contra-party to the
execution is a Priority Customer. The current Marketing Fees are: (i)
$0.70 Per contract for transactions in standard option classes ($0.070
per contract for transactions in mini options) that are not penny
option classes; and (ii) $0.25 per contract for transactions in
standard option classes ($0.025 per contract for transactions in mini
options) that are penny option classes. The Exchange proposes to amend
Section 1)b) to state that the Marketing Fee applies to contracts in
simple and complex order executions, and that the Marketing Fee in
complex order executions will be assessed per contract whether the
transaction executes in the Strategy Book, a Complex Auction, or by
Legging into the simple order book (i.e., regardless of how the complex
contracts are executed).\29\
---------------------------------------------------------------------------

    \29\ For a discussion of these types of executions, see
Securities Exchange Act Release No. 78620 (August 18, 2016), 81 FR
58770 (August 25, 2016) (SR-MIAX-2016-26).
---------------------------------------------------------------------------

    The Exchange is not proposing to extend the Posted Liquidity
Marketing Fee to contracts executed from complex orders. Currently, for
transactions that occur on or after September 1, 2016 and extending
through October 31, 2016, MIAX assesses an additional $0.12 per
contract Posted Liquidity Marketing Fee to all Market Makers for any
standard options overlying EEM, GLD, IWM, QQQ and SPY that Market
Makers execute in their assigned class when the contra-party to the
execution is a Priority Customer and the Priority Customer order was
posted on the MIAX order book at the time of the execution. The
Exchange proposes to amend Section 1)b) to state that the Posted
Liquidity Marketing Fee applies only to contracts from simple order
executions. The revised Marketing Fee table proposed by the Exchange
will be as follows:

------------------------------------------------------------------------
 Amount of marketing fee assessed              Option classes
------------------------------------------------------------------------
$0.70 (per contract)..............  Simple and complex order t
                                     [T]ransactions in Standard Option
                                     Classes that are not in the Penny
                                     Pilot Program.
$0.25 \30\ (per contract).........  Simple and complex order t
                                     [T]ransactions in Standard Option
                                     Classes that are in the Penny Pilot
                                     Program (a List of those Standard
                                     Option Classes in the Penny Pilot
                                     Program is available on the MIAX
                                     Website).
$0.070 (per contract).............  Simple and complex order t
                                     [T]ransactions in Mini Options
                                     where the corresponding Standard
                                     Option is not in the Penny Pilot
                                     Program.
$0.025 (per contract).............  Simple and complex order t
                                     [T]ransactions in Mini Options
                                     where the corresponding Standard
                                     Option is in the Penny Pilot
                                     Program (a List of those Standard
                                     Option Classes in the Penny Pilot
                                     Program is available on the MIAX
                                     Website).
------------------------------------------------------------------------

    All other aspects of the Marketing Fee program of the Exchange will
remain unchanged. The proposed rule changes are scheduled to become
operative October 24, 2016.
---------------------------------------------------------------------------

    \30\ Extending through October 31, 2016, the Exchange will
assess an additional $0.12 per contract Posted Liquidity Marketing
Fee to all Market Makers for any simple orders in standard options
overlying EEM, GLD, IWM, QQQ, and SPY that Market Makers execute in
their assigned class when the contra-party to the execution is a
Priority Customer and the Priority Customer order was posted on the
MIAX Book at the time of the execution.

---------------------------------------------------------------------------

2. Statutory Basis
    MIAX believes that its proposed rule change is consistent with
Section 6(b) of the Act \31\ in general, and in particular, furthers
the objectives of Section 6(b)(4) of the Act,\32\ in that it is an
equitable allocation of reasonable fees and other charges among
Exchange members and issuers and other persons using its facilities,
and 6(b)(5) of the Act,\33\ 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.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78f(b).
    \32\ 15 U.S.C. 78f(b)(4).
    \33\ 15 U.S.C. 78f(b)(1) and (b)(5).
---------------------------------------------------------------------------

    The proposed fee structure is equitable and not unfairly
discriminatory because all similarly situated market participants are
subject to the same fee and rebate structure for complex order
transactions, and access to the Exchange is offered on terms that are
not unfairly discriminatory. The inclusion of the number of contracts
executed in both simple and complex orders in the calculation of the
Market Maker's monthly percentage threshold in Section 1)a)i) is
reasonable, equitable and not unfairly discriminatory because it
provides a direct and equal fee benefit to Market Makers that trade
complex orders. All complex order volume executed will count towards
the monthly percentage thresholds required to receive the enumerated
discounts in both simple and complex transactions, thus benefiting all
Market Makers equally. Furthermore, it should encourage Market Makers
to provide liquidity in complex orders on the Exchange because their
executed volume in complex orders will enhance their ability to achieve
discounted per contract transaction fees in transactions involving both
simple and complex orders, thus functioning to remove impediments to
and perfect the mechanisms of a free and open market and a national
market system.
    The Exchange's proposal to assess per contract transaction fees to
MIAX Market Makers for complex orders in penny option classes and non-
penny option classes is reasonable and not unfairly discriminatory
because it enhances the ability of Market Makers to achieve volume
levels that qualify them for fees in the higher tiers, and equally
rewards all Market Makers that achieve the tiers that include even
further discounted per contract transaction fees. The amount of the
fees in the tiers for complex orders are very similar to the amount of
the fees in the tiers for simple orders, therefore the Exchange
believes that fee amounts are reasonable and appropriate.
    The Exchange's proposal to assess the same fees for simple and
complex orders to other market participants (listed in Section 1)a)ii
of the Fee Schedule) for complex orders is reasonable and not unfairly
discriminatory because the fees apply equally to all similarly situated
market participants. Just as with the current fees assessed for simple
orders in Section 1)a)ii, the PCRP tier discounts will not apply to
these participants because Market Makers, who qualify for the
discounts, have quoting and other obligations that the listed other
market participants do not have and the Exchange believes that the PCRP
tier discounts are thus equitable and not unfairly discriminatory.\34\
---------------------------------------------------------------------------

    \34\ See supra note 20.
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable and not unfairly
discriminatory to offer discounted fees to Market Makers in simple
orders if they fall within PCRP volume Tier 3 or higher, while not
discounting the per contract fees for complex orders regardless of
their PCRP Tier level. While the Exchange has the ability to justify
and determine the level of incentives with respect to simple orders,
the Exchange believes it would be premature to offer additional
incentives and rewards to Market Makers above what the Exchange is
offering until Market Makers actually use the new and value-added
complex order functionality. The Exchange will better be able to
determine if additional incentives or rewards are warranted, and if so
at what level, once Market Makers begin using the new functionality and
have established a performance baseline for complex orders.
    The Exchange's proposal to offer certain credits for complex order
transactions under the PCRP and the PRP and to include contracts
executed from both simple and complex transactions in the calculation
of the various percentage volume thresholds is intended to encourage
participants to submit more orders to the Exchange, thus enhancing
liquidity and removing impediments to and perfecting the mechanisms of
a free and open market and a national market system.
    The Exchange notes that the proposed per contract credits for the
PCRP are higher for complex orders than they are for simple orders, and
the per contract credits for the PRP are lower for complex orders than
they are for simple orders. The Exchange believes that this is
equitable and reasonable because the nature of the two rebate programs
(PCRP and PRP) is fundamentally different in structure and purpose.
    On the one hand, the PCRP rewards executed Priority Customer volume
from ``contract-one.'' \35\ This structure is designed to enable the
Exchange to compete with the multitude of Priority Customer payment
programs, such as maker-taker rebates and payment for order flow
programs that are established in the industry. By offering an
aggressive incentive for Priority Customer volume beginning on day one,
the Exchange believes it can best compete for order flow in complex
orders as soon as they become available on the Exchange.
---------------------------------------------------------------------------

    \35\ The Priority Customer rebate payment will be calculated
from the first executed contract at the applicable threshold per
contract credit with rebate payments made at the highest achieved
volume tier for each contract traded in that month. See Fee
Schedule, Section 1)a)iii.
---------------------------------------------------------------------------

    On the other hand, the PRP credit is aimed at Professional volume
executed on the Exchange on an incremental basis. The PRP credit is
based on a volume increase above and beyond an established baseline.
Because the trading of complex orders on the Exchange represents new
functionality and new volume to the Exchange, all complex order volume
executed on the Exchange is by its nature incremental. As such, the
Exchange believes it is not necessary to provide rewards at the same
level to Professional complex orders that it provides for Professional
simple orders.
    The Exchange's proposal to establish and assess a surcharge of
$0.08 per contract for Market Makers and other participants for
removing liquidity by trading against a Priority Customer order on the
Strategy Book is consistent with Section 6(b)(4) of the Act \36\
because it applies equally to all participants that remove Priority
Customer liquidity from the Strategy Book, and does not apply to
participants whose orders or quotes resting on the Strategy Book are
executed against Priority Customer complex orders on the Strategy Book.
This incentive for providing resting liquidity applies to all
participants. Assessing the surcharge to market participants who take
liquidity from Priority Customers is reasonable and not unfairly
discriminatory because it will provide MIAX Market Makers with equal
surcharges for removing

liquidity, and no surcharge for resting liquidity. As stated above,
this is substantially similar to a surcharge assessed on another
exchange.\37\ The Exchange notes that, although its base fee is
slightly higher (with a similar complex fee approach), the Exchange
believes that this is fair and equitable because the Exchange offers
technology with unique risk mitigation features not available
elsewhere, such as the Implied Away Best Bid or Offer (``ixABBO'')
Price Protection. See Exchange Rule 518.05(d).
---------------------------------------------------------------------------

    \36\ 15 U.S.C. 78f(b)(4).
    \37\ See supra note 16.
---------------------------------------------------------------------------

    The Exchange's proposal to assess the $.08 surcharge is also
consistent with Section 6(b)(5) of the Act \38\ because it perfects the
mechanisms of a free and open market and a national market system and
protect investors and the public interest by encouraging participants
to provide liquidity on the Strategy Book, which the Exchange believes
is an important competitive tool that directly or indirectly can
provide better prices for investors. The proposed fee structure may
narrow the MIAX Bid and Offer (``MBBO'') because not charging the $0.08
surcharge to participants with resting liquidity on the Strategy Book
effectively subsidizes, and thus encourages, the posting of liquidity
on MIAX. Giving greater incentive for Market Makers to either match or
improve upon the best price displayed on MIAX benefits investors and
the public by improving execution prices.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 78f(b)(1) and (b)(5).
---------------------------------------------------------------------------

    Non-Priority Customers, non-MIAX Market Makers, broker-dealers and
Firms that use sophisticated trading systems will be able to remove
liquidity quickly from the Strategy Book, and thus the Exchange
believes that assessing the surcharge to participants who remove
liquidity, and not assessing the surcharge to participants with complex
orders resting on the Strategy Book is reasonable and not unfairly
discriminatory. Moreover, the proposed surcharge is substantially
similar to the surcharge on CBOE,\39\ and has been accepted as not
unfairly discriminatory under the Act.\40\ The Exchange believes for
these reasons that the surcharge is equitable, reasonable and not
unfairly discriminatory, and thus consistent with the Act.
---------------------------------------------------------------------------

    \39\ See supra notes 16, 37.
    \40\ See CBOE Fees Schedule Complex Taker Fee, (describing a per
contract, per side surcharge at note 35); see also International
Securities Exchange (``ISE'') Schedule of Fees, Section II. ISE's
fee structure does not include a specific ``taker surcharge'' in the
same manner as CBOE (and which is also proposed by the Exchange) but
instead includes a higher taker fee for complex transactions that
remove liquidity from the complex order book.
---------------------------------------------------------------------------

    The proposed assessment of the Marketing Fee for all complex order
transactions that are executed by a Market Maker in their assigned
classes when the contra-party to the trade is a Priority Customer is
equitable and not unfairly discriminatory because the fee will apply
equally to all Market Makers in their assigned classes. Further, the
assessment of a Marketing Fee for complex transactions is a common
practice of other exchanges.\41\ Attracting more order flow to the
Exchange will bring greater volume and liquidity which in turn benefits
all market participants by providing more trading opportunities and
tighter spreads.
---------------------------------------------------------------------------

    \41\ See CBOE Fees Schedule, p. 4; see also Phlx Pricing
Schedule, Section II.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
believes that the proposed fee structure for complex order transactions
is intended to promote narrower spreads and greater liquidity at the
best prices. The fee-based incentives for market participants to
provide liquidity by submitting complex orders to the Exchange, and
thereafter to improve the MBBO to ensure participation, should enable
the Exchange to attract order flow and compete with other exchanges
which also provide such incentives to their market participants for
similar transactions.\42\
---------------------------------------------------------------------------

    \42\ See, e.g., Phlx Pricing Schedule, Section B (Customer
Rebate Program).
---------------------------------------------------------------------------

    The Exchange believes that increased complex order flow will bring
greater volume and liquidity which in turn benefits all market
participants by providing more trading opportunities and tighter
spreads. Therefore, any potential effects that the adoption of the
complex transaction fees may have on intra-market competition are
justifiable due to the reasons stated above.
    The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues if they
deem fee levels at a particular venue to be excessive. In such an
environment, the Exchange must continually adjust its fees to remain
competitive with other exchanges and to attract order flow. The
Exchange believes that the proposed rule changes reflect this
competitive environment because they modify the Exchange's fees in a
manner that encourages market participants to provide liquidity and to
send order flow to the Exchange.

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

    Written comments were neither solicited nor received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\43\ and Rule 19b-4(f)(2) \44\ thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \43\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \44\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-MIAX-2016-38 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MIAX-2016-38. 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 Web site (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 Web site 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; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-MIAX-2016-38, and should be
submitted on or before November 22, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\45\
---------------------------------------------------------------------------

    \45\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-26297 Filed 10-31-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 129 (Thursday, July 5, 2018)]
[Notices]
[Pages 31435-31436]
[FR Doc No: 2018-14357]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-349, OMB Control No. 3235-0395]

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736

Extension:
    Rule 15g-6

    Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the

Office of Management and Budget (``OMB'') a request for approval of
extension of the previously approved collection of information provided
for in Rule 15g-6--Account Statements for Penny Stock Customers--(17
CFR 240.15g-6) under the Securities Exchange Act of 1934 (15 U.S.C. 78a
et seq.).
    Rule 15g-6 requires brokers and dealers that sell penny stocks to
provide their customers monthly account statements containing
information with regard to the penny stocks held in customer accounts.
The purpose of the rule is to increase the level of disclosure to
investors concerning penny stocks generally and specific penny stock
transactions.
    The Commission estimates that approximately 195 broker-dealers will
spend an average of 78 hours annually to comply with this rule. Thus,
the total compliance burden is approximately 15,210 burden-hours per
year.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
    The public may view background documentation for this information
collection at the following website: http://www.reginfo.gov. Comments
should be directed to: (i) Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10102, New Executive Office Building,
Washington, DC 20503 or by sending an email to:
[email protected]; and (ii) Pamela Dyson, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington, DC 20549 or by sending an email to
[email protected]. Comments must be submitted within 30 days of this
notice.

    Dated: June 28, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14357 Filed 7-3-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 74, Number 111 (Thursday, June 11, 2009)]
[Rules and Regulations]
[Pages 27704-27706]
[FR Doc No: E9-13137]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2007-29067; Directorate Identifier 2007-NM-148-AD;
Amendment 39-15926; AD 2009-12-03]
RIN 2120-AA64

Airworthiness Directives; Boeing Model 757-200, -200CB, and -300
Series Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: We are adopting a new airworthiness directive (AD) for certain
Boeing Model 757-200, -200CB, and -300 series airplanes. This AD
requires a detailed inspection for damage of the wire bundle of the
right recirculation fan, and repair if necessary. This AD also requires
re-routing the wire bundle of the right recirculation fan. This AD
results from a report indicating that, during landing of a Model 757
airplane, an overheat warning and smoke occurred in the main cabin, and
the right recirculation fan stopped operating. We are issuing this AD
to prevent damage of the wiring bundle of the right recirculation fan.
Such damage could result in a short circuit and possible fire in the
mix bay or smoke in the main cabin.

DATES: This AD is effective July 16, 2009.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in the AD as of July 16,
2009.

ADDRESSES: For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; telephone 206-
544-5000, extension 1; fax<PHONE_NUMBER>; e-mail

<EMAIL_ADDRESS>Internet https://www.myboeingfleet.com.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The address for the
Docket Office (telephone<PHONE_NUMBER>) is the Document Management
Facility, U.S. Department of Transportation, Docket Operations, M-30,
West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Philip Sheridan, Systems and Equipment
Branch, ANM-130S, FAA, Seattle Aircraft Certification Office, 1601 Lind
Avenue, SW., Renton, Washington 98057-3356; telephone<PHONE_NUMBER>;
fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an airworthiness directive (AD) that would apply to
certain Boeing Model 757-200, -200CB, and -300 series airplanes. That
NPRM was published in the Federal Register on August 31, 2007 (72 FR
50290). That NPRM proposed to require a detailed inspection for damage
of the wire bundle of the right recirculation fan, and repair if
necessary. That NPRM also proposed to require re-routing the wire
bundle of the right recirculation fan.

Actions Since the NPRM Was Issued

    The NPRM referred to Boeing Service Bulletin 757-21-0109, dated
December 15, 2006, as the appropriate source of service information for
the proposed actions. Boeing has since revised that service bulletin.
Boeing Service Bulletin 757-21-0109, Revision 1, dated October 30,
2008, clarifies certain procedures but otherwise adds no new actions.
We have revised paragraphs (c) and (f) in this final rule to refer to
Revision 1 of the service bulletin. We have added a new paragraph (g)
to this final rule to provide credit for actions done before the
effective date of the AD in accordance with the original service
bulletin. We have renumbered subsequent paragraphs accordingly.

Comments

    We gave the public the opportunity to participate in developing
this AD. We considered the comments received from the two commenters.

Support for the NPRM

    Boeing concurs with the contents of the NPRM.

Request To Clarify Procedures

    Continental Airlines asks for clarification or instructions
regarding the filler material between the e-clip, part number 411A4902-
7, and the wire and the clip in the depiction in Boeing Service
Bulletin 757-21-0109, dated December 15, 2006.
    We agree that further clarification is needed on this point. Boeing
Service Bulletin 757-21-0109, Revision 1, dated October 30, 2008,
provides a filler rod part number and corrects the reference in note
(b) for Figure 3 and Figure 4 of that service bulletin. As stated
previously, we have changed the final rule to refer to Revision 1 of
the service bulletin as the appropriate source of service information
for this final rule.

Request To Include Instructions for Modified Airplanes

    Continental Airlines requests that we revise the NPRM to provide
instructions for airplanes that are not in the pre-modification state
depicted by Boeing Service Bulletin 757-21-0109, dated December 15,
2006.
    We find that clarification is necessary. Boeing Service Bulletin
757-21-0109, Revision 1, dated October 30, 2008, is now referenced in
the final rule. It addresses six new wire configurations which take
into account the known preexisting configurations. We have not changed
the final rule regarding this issue.

Request To Revise NPRM To Require Different Method of Compliance

    Continental Airlines suggests using a heat shrinkable sleeve in
place of the ``heat shrinkable'' sleeve TFE-2X, which the commenter
states is in fact not heat shrinkable. The commenter states that in its
experience tying the lacing tape around the sleeve is extremely
difficult, and it does not believe that the sleeve will stay on much
more than a year at best.
    We infer that the commenter is requesting a different method of
compliance. We disagree. Boeing Service Bulletin 757-21-0109, Revision
1, dated October 30, 2008, specifies to use a sleeve with part number
65C38488-2. We have not changed the final rule regarding this issue.
However, under the provisions of paragraph (h) of this AD, we may
approve a request for different compliance methods if the request
includes data that prove that the new method provides an acceptable
level of safety.

Explanation of Change to Final Rule

    We have clarified paragraph (h) of this AD to more accurately
identify the information for requesting approval of an alternative
method of compliance (AMOC).

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
the AD with the changes described previously. We also determined that
these changes will not increase the economic burden on any operator or
increase the scope of the AD.

Costs of Compliance

    There are about 920 airplanes of the affected design in the
worldwide fleet. This AD affects about 560 airplanes of U.S. registry.
The actions take about 2 work hours per airplane, at an average labor
rate of $80 per work hour. Required parts cost about $81 per airplane.
Based on these figures, the estimated cost of the AD for U.S. operators
is $134,960, or $241 per airplane.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
Requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.

    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979), and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    You can find our regulatory evaluation and the estimated costs of
compliance in the AD Docket.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

0
Accordingly, under the authority delegated to me by the Administrator,
the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new AD:

2009-12-03 Boeing: Amendment 39-15926. Docket No. FAA-2007-29067;
Directorate Identifier 2007-NM-148-AD.

Effective Date

    (a) This airworthiness directive (AD) is effective July 16,
2009.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to Boeing Model 757-200, -200CB, and -300
series airplanes; certificated in any category; as identified in
Boeing Service Bulletin 757-21-0109, Revision 1, dated October 30,
2008.

Unsafe Condition

    (d) This AD results from a report indicating that, during
landing of a Model 757 airplane, an overheat warning and smoke
occurred in the main cabin, and the right recirculation fan stopped
operating. We are issuing this AD to prevent damage of the wiring
bundle of the right recirculation fan. Such damage could result in a
short circuit and possible fire in the mix bay or smoke in the main
cabin.

Compliance

    (e) You are responsible for having the actions required by this
AD performed within the compliance times specified, unless the
actions have already been done.

Inspection and Corrective Actions

    (f) Within 24 months after the effective date of this AD, do the
actions required by paragraphs (f)(1) and (f)(2) of this AD, in
accordance with the Accomplishment Instructions of Boeing Service
Bulletin 757-21-0109, Revision 1, dated October 30, 2008.
    (1) Do a detailed inspection for damage of the wire bundle of
the right recirculation fan, and repair any damage before further
flight.
    (2) Re-route the wire bundle and re-orient the electrical
connector of the right recirculation fan.

Credit for Actions Done According to Previous Issue of Service Bulletin

    (g) Actions done before the effective date of this AD in
accordance with Boeing Service Bulletin 757-21-0109, dated December
15, 2006, are acceptable for compliance with the requirements of
paragraphs (f)(1) and (f)(2) of this AD.

Alternative Methods of Compliance (AMOCs)

    (h)(1) The Manager, Seattle Aircraft Certification Office, FAA,
has the authority to approve AMOCs for this AD, if requested using
the procedures found in 14 CFR 39.19. Send information to Attn:
Philip Sheridan, Systems and Equipment Branch, ANM-130S, FAA,
Seattle Aircraft Certification Office, 1601 Lind Avenue, SW.,
Renton, Washington 98057-3356; telephone<PHONE_NUMBER>; fax (425)
917-6590. Or, e-mail information to<EMAIL_ADDRESS>    (2) To request a different method of compliance or a different
compliance time for this AD, follow the procedures in 14 CFR 39.19.
Before using any approved AMOC on any airplane to which the AMOC
applies, notify your principal maintenance inspector (PMI) or
principal avionics inspector (PAI), as appropriate, or lacking a
principal inspector, your local Flight Standards District Office.
The AMOC approval letter must specifically reference this AD.

Material Incorporated by Reference

    (i) You must use Boeing Service Bulletin 757-21-0109, Revision
1, dated October 30, 2008, to do the actions required by this AD,
unless the AD specifies otherwise.
    (1) The Director of the Federal Register approved the
incorporation of this service information under 5 U.S.C. 552 (a) and
1 CFR part 51.
    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P. O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; telephone
206-544-5000, extension 1; fax<PHONE_NUMBER>; e-mail
<EMAIL_ADDRESS>Internet https://www.myboeingfleet.com.
    (3) You may review copies of the service information at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton,
Washington. For information on the availability of this material at
the FAA, call<PHONE_NUMBER> or<PHONE_NUMBER>.
    (4) You may also review copies of the service information that
is incorporated by reference at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.

    Issued in Renton, Washington, on June 1, 2009.
Stephen P. Boyd,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. E9-13137 Filed 6-10-09; 8:45 am]
BILLING CODE 4910-13-P