[Federal Register Volume 83, Number 220 (Wednesday, November 14, 2018)]
[Rules and Regulations]
[Pages 56736-56739]
[FR Doc No: 2018-24743]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2017-0661; FRL-9986-32-Region 9]

Air Plan Approval; Arizona; Hayden and Miami Areas; Lead and
Sulfur Dioxide Control Measures--Copper Smelters

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking final
action to approve revisions to the Arizona State Implementation Plan
(SIP). These revisions concern emissions of lead and sulfur dioxide
(SO2) from the copper smelter at Hayden, AZ and
SO2 from the copper smelter at Miami, AZ. We are approving
local rules that regulate these emission sources under the Clean Air
Act (CAA or the Act).

DATES: This rule will be effective on December 14, 2018.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-R09-OAR-2017-0661. All documents in the docket are
listed on the https://www.regulations.gov website. Although listed in
the index, some information is not publicly available, e.g.,
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Certain other material, such as
copyrighted material, is not placed on the internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available through https://www.regulations.gov, or please
contact the person identified in the FOR FURTHER INFORMATION CONTACT
section for additional availability information.

FOR FURTHER INFORMATION CONTACT: Kevin Gong, EPA Region IX, (415) 972-
3073, [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to the EPA.

Table of Contents

I. Proposed Action
II. Public Comments and EPA Responses
III. EPA Action
IV. Incorporation by Reference
V. Statutory and Executive Order Reviews

I. Proposed Action

    On March 30, 2018 (83 FR 13716), the EPA proposed to approve the
following rules into the Arizona SIP.\1\
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    \1\ In addition to the rules addressed in this action, ADEQ's
April 6, 2017 submittal also included R18-2-B1301.01--Limits on
Lead-Bearing Fugitive Dust from the Hayden Smelter; R18-2-B1302--
Limits on SO2 Emissions from the Hayden Smelter; R18-2-
715--Standards of Performance for Existing Primary Copper Smelters:
Site-Specific Requirements; and R18-2-715.01--Standards of
Performance for Existing Primary Copper Smelters; Compliance and
Monitoring. The EPA has already approved R18-2-B1301.01 into the
SIP, 83 FR 7614 (February 22, 2018) and intends to take action on
the remaining rules in a separate rulemaking.

----------------------------------------------------------------------------------------------------------------
            Rule citation                      Rule title                     Effective              Submitted
----------------------------------------------------------------------------------------------------------------
R18-2-B1301.........................  Limits on Lead Emissions      7/1/2018 or 180 calendar            4/6/2017
                                       from the Hayden Smelter.      days after completion of
                                                                     all Converter Retrofit
                                                                     Project improvements
                                                                     authorized by Significant
                                                                     Permit Revision No. 60647.
R18-2-C1302.........................  Limits on SO2 Emissions from  On the later of the                 4/6/2017
                                       the Miami Smelter.            effective date of the EPA
                                                                     Administrator's action
                                                                     approving it as part of the
                                                                     state implementation plan
                                                                     or January 1, 2018.
Appendix 14.........................  Procedures for Sulfur         5/7/2017....................        4/6/2017
                                       Dioxide and Lead Fugitive
                                       Emissions Studies for the
                                       Hayden Smelter.
R18-2-715.02........................  Standards of Performance for  5/7/2017....................        4/6/2017
                                       Existing Primary Copper
                                       Smelters; Fugitive
                                       Emissions.
----------------------------------------------------------------------------------------------------------------

    We proposed to approve these rules because we determined that they
comply with the relevant CAA requirements. Our proposed action contains
more information on the rules and our evaluation.

II. Public Comments and EPA Responses

    The EPA's notice of proposed rulemaking provided a 30-day public
comment period. During this period, we received 15 comments. Nine of
these comments address issues not related to the subject of this
rulemaking, including: Environmental quality issues in Asia, climate
change policy, and other federal requirements not related to
SO2 or lead pollution in Arizona. Six comments are germane
to this rulemaking, and are supportive of the EPA's proposal to approve
these regulations. One of these commenters raised a concern about the
State and the EPA's statement that controlling emissions from the
1,000-foot stack would result in improved air quality at the ground
level monitors at Hillcrest and Globe Highway in the Hayden Area. This
commenter also suggested that the EPA should pay additional attention
to fugitive lead emissions that may result from other smelter
processes, including furnace dust and from residue from converter bed
cleaning. We thank the commenter for the questions and suggestion and
address the issues raised below.
    The Arizona Department of Environmental Quality (ADEQ) and the EPA
believe that the prime contributors to lead nonattainment are fugitive
emissions from smelter operations and leaded dust surrounding the
smelter. Rule R18-2-B1301.01, approved into the Arizona SIP in 83 FR
7614, addresses leaded dust control measures for non-smelting process
sources, which includes sources such as the bedding plant and reverts
piles. Dust and material generated from smelter process sources, such
as furnace and converter dust, are collected and deposited in these
non-smelting process sources for disposal or reintroduction into the
smelter process. Rule R18-2-B1301 addresses fugitive emissions from
smelter operations by establishing operational standards for process
equipment and control devices, requirements for the process gas capture
system and control devices operations and maintenance plan (O&M plan),
performance testing and compliance demonstration requirements, and
recordkeeping and reporting requirements. However, Rule R18-2-B1301
does not include a numeric fugitive lead emissions limit. The EPA
recognized this issue during the rule development process and requested
that ADEQ provide supplementary analysis to address this concern. ADEQ
responded on October 11, 2018, stating that continuous monitoring of
fugitive lead emissions is technically infeasible, and that parametric
monitoring of capture and control device efficiency (which would
minimize uncontrolled fugitive emissions, and increase the volume of
process gas directed to control devices and ultimately the 1,000-foot
stack) was a suitable proxy for a numeric fugitive lead limit. ADEQ
also reiterated that the fugitive emissions analyses required by
Appendix 14 would be used to validate this approach.\2\ The EPA
generally agrees with this reasoning.
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    \2\ Letter from Timothy S. Franquist, Director, Air Quality
Division, Arizona Department of Environmental Quality, to Michael
Stoker, Regional Administrator, U.S. Environmental Protection
Agency, Region 9, ``Re: Justification and Clarification on Arizona
Administrative Code R18-2-B1301, Limits on Lead Emissions from the
Hayden Smelter,'' dated October 11, 2018.
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    The EPA also requested that ADEQ address an issue regarding the
allowance for alternative sampling points for SO2 at the
Miami Smelter. Specifically, we requested that ADEQ eliminate a
provision that allowed for the owner or operator of the Miami Smelter
to petition for an alternative sampling point if the current locations
proved infeasible. Such flexibility might have been necessary at the
time of rule development, as capture and control upgrades were still
being installed; however, now that the upgrades are complete, we do not
believe this flexibility is still necessary. ADEQ agreed to withdraw
subsection (E)(6) of Rule R18-2-C1302 allowing for alternative sampling
point since none are needed at the Miami Smelter.\3\
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    \3\ Letter from Timothy S. Franquist, Director, Air Quality
Division, Arizona Department of Environmental Quality, to Michael
Stoker, Regional Administrator, U.S. Environmental Protection
Agency, Region 9, ``Re: Request to Withdraw from EPA Consideration,
Arizona Administrative Code R18-2-C1302, Subsection (E)(6),'' dated
August 27, 2018.
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    The comments and additional analysis from ADEQ have been added to
the docket for this action and are accessible at https://www.regulations.gov/docket?D=EPA-R09-OAR-2017-0661.

III. EPA Action

    No comments were submitted that change our assessment of the rules
as described in our proposed action. Therefore, as authorized in
section 110(k)(3) of the Act, the EPA is approving these rules into the
Arizona SIP, with the exception of subsection (E)(6) in Rule R18-2-
C1302, which was withdrawn by ADEQ. The EPA is also approving Appendix
14 and revised R18-2-715.02.

IV. Incorporation by Reference

    In this rule the EPA is finalizing regulatory text that includes
incorporation by reference. In accordance with requirements of 1 CFR
51.5, the EPA is finalizing the incorporation by reference of the ADEQ
rules described in the amendments to 40 CFR part 52 set forth below.
The EPA has made, and will continue to make, these documents available
through www.regulations.gov and at the EPA Region IX Office (please
contact the person identified in the FOR FURTHER INFORMATION CONTACT
section of this preamble for more information). Therefore, these
materials have been approved by the EPA for inclusion in the SIP, have
been incorporated by

reference by the EPA into that plan, are fully federally enforceable
under sections 110 and 113 of the CAA as of the effective date of the
final rulemaking of the EPA's approval, and will be incorporated by
reference in the next update to the SIP compilation.\4\
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    \4\ 62 FR 27968 (May 22, 1997).
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V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, the EPA's role is to approve state choices,
provided that they meet the criteria of the CAA. Accordingly, this
action merely approves state law as meeting Federal requirements and
does not impose additional requirements beyond those imposed by state
law. For that reason, this action:
     Is not a significant regulatory action subject to review
by the Office of Management and Budget under Executive Orders 12866 (58
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Is not an Executive Order 13771 (82 FR 9339, February 2,
2017) regulatory action because SIP approvals are exempted under
Executive Order 12866;
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide the EPA with the discretionary authority
to address, as appropriate, disproportionate human health or
environmental effects, using practicable and legally permissible
methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, the SIP is not approved to apply on any Indian
reservation land or in any other area where the EPA or an Indian tribe
has demonstrated that a tribe has jurisdiction. In those areas of
Indian country, the rule does not have tribal implications and will not
impose substantial direct costs on tribal governments or preempt tribal
law as specified by Executive Order 13175 (65 FR 67249, November 9,
2000).
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. Section 804, however, exempts from section 801 the
following types of rules: Rules of particular applicability; rules
relating to agency management or personnel; and rules of agency
organization, procedure, or practice that do not substantially affect
the rights or obligations of non-agency parties. 5 U.S.C. 804(3).
Because this is a rule of particular applicability, the EPA is not
required to submit a rule report regarding this action under section
801.
    Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by January 14, 2019. Filing a petition for
reconsideration by the Administrator of this final rule does not affect
the finality of this action for the purposes of judicial review nor
does it extend the time within which a petition for judicial review may
be filed, and shall not postpone the effectiveness of such rule or
action. This action may not be challenged later in proceedings to
enforce its requirements. (See section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Lead, Reporting and
recordkeeping requirements, Sulfur oxides.

    Dated: October 30, 2018.
Michael Stoker,
Regional Administrator, Region IX.

    Part 52, Chapter I, Title 40 of the Code of Federal Regulations is
amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority:  42 U.S.C. 7401 et seq.

Subpart D--Arizona

0
2. In Sec.  52.120, table 2 in paragraph (c) is amended by:
0
a. Revising the entry ``R18-2-715.02'';
0
b. Adding the entry ``R18-2-B1301'' after the subheading ``Article 13
(State Implementation Plan Rules for Specific Locations)''; and
0
c. Adding the entries ``R18-2-C1302, excluding subsection (E)(6)'' and
``Appendix 14'' after the entry ``R18-2-B1301.01''.
    The revision and additions read as follows:

Sec.  52.120   Identification of plan.

* * * * *
    (c) * * *

                                    Table 2--EPA-Approved Arizona Regulations
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                                                             State                               Additional
        State citation               Title/subject      effective date  EPA approval date       explanation
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                          Article 7 (Existing Stationary Source Performance Standards)
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
R18-2-715.02..................  Standards of                  5/7/2017  11/14/2018,        Submitted by the
                                 Performance for                         [insert Federal    Governor's designee
                                 Existing Primary                        Register           on April 6, 2017.
                                 Copper Smelters;                        citation].
                                 Fugitive Emissions.

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                       Article 13 (State Implementation Plan Rules for Specific Locations)
----------------------------------------------------------------------------------------------------------------
R18-2-B1301...................  Limits on Lead                7/1/2018  11/14/2018,        Submitted by the
                                 Emissions from the                      [insert Federal    Governor's designee
                                 Hayden Smelter.                         Register           on April 6, 2017.
                                                                         citation].

                                                  * * * * * * *
R18-2-C1302, excluding          Limits on SO2               12/14/2018  11/14/2018,        Submitted by the
 subsection (E)(6).              Emissions from the                      [insert Federal    Governor's designee
                                 Miami Smelter.                          Register           on April 6, 2017.
                                                                         citation].         Subsection (E)(6)
                                                                                was withdrawn by the
                                                                                Arizona Department
                                                                                of Environmental
                                                                                Quality.
Appendix 14...................  Procedures for Sulfur         5/7/2017  11/14/2018,        Submitted by the
                                 Dioxide and Lead                        [insert Federal    Governor's designee
                                 Fugitive Emissions                      Register           on April 6, 2017.
                                 Studies for the                         citation].
                                 Hayden Smelter.

                                                  * * * * * * *
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* * * * *
[FR Doc. 2018-24743 Filed 11-13-18; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 82, Number 89 (Wednesday, May 10, 2017)]
[Notices]
[Pages 21855-21858]
[FR Doc No: 2017-09421]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80592; File No. SR-PEARL-2017-19]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
PEARL Fee Schedule

May 4, 2017.
    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 April 26, 2017, MIAX PEARL, LLC (``MIAX PEARL''
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.
---------------------------------------------------------------------------

    \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 PEARL 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/rule-filings/pearl at MIAX
PEARL's principal office, and at the Commission's Public Reference
Room.

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

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

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

1. Purpose
    The Exchange proposes to amend the Add/Remove Tiered Rebates/Fees
set forth in Section 1(a) of the Fee Schedule that apply to MIAX PEARL
Market Makers \3\ to (i) increase the ``Maker'' rebate in Tier 3 for
transactions of options in Penny classes (as defined below), and (ii)
add a new, alternative Volume Criteria to Tier 3 based upon the total
monthly volume executed by a Market Maker solely in SPY options on MIAX
PEARL, expressed as a percentage of total consolidated national volume
in SPY options. The Exchange also proposes to make a minor, non-
substantive technical correction to a definition contained in the
Definitions section of the Fee Schedule, as described below.
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    \3\ ``Market Maker'' means a Member registered with the Exchange
for the purpose of making markets in options contracts traded on the
Exchange. See the Definitions Section of the Fee Schedule and
Exchange Rule 100.
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    The Exchange currently assesses transaction rebates and fees to all
market participants which are based upon the total monthly volume
executed by the Member \4\ on MIAX PEARL in the relevant, respective
origin type (not including Excluded Contracts) \5\ expressed as a
percentage of TCV.\6\ In addition, the per contract transaction rebates
and fees are applied retroactively to all eligible volume for that
origin type once the respective threshold tier (``Tier'') has been
reached by the Member. The Exchange aggregates the volume of Members
and their Affiliates.\7\ Members that place resting liquidity, i.e.,
orders resting on the book of the MIAX PEARL System,\8\ are paid the
specified ``maker'' rebate (each a ``Maker''), and Members that execute
against resting liquidity are assessed the specified ``taker'' fee
(each a ``Taker''). For opening transactions and ABBO uncrossing
transactions, per contract transaction rebates and fees are waived for
all market participants. Finally, Members are assessed lower
transaction fees and receive lower rebates for order executions in
standard option classes in the Penny Pilot Program \9\ (``Penny
classes'') than for order executions in standard option classes which
are not in the Penny Pilot Program (``Non-Penny classes''), where
Members are assessed higher transaction fees and receive higher
rebates.
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    \4\ ``Member'' means an individual or organization that is
registered with the Exchange pursuant to Chapter II of the Exchange
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See the Definitions Section of
the Fee Schedule and Exchange Rule 100.
    \5\ ``Excluded Contracts'' means any contracts routed to an away
market for execution. See the Definitions Section of the Fee
Schedule.
    \6\ ``TCV'' means total consolidated volume calculated as the
total national volume in those classes listed on MIAX PEARL for the
month for which the fees apply, excluding consolidated volume
executed during the period time in which the Exchange experiences an
``Exchange System Disruption'' (solely in the option classes of the
affected Matching Engine (as defined below)). The term Exchange
System Disruption, which is defined in the Definitions section of
the Fee Schedule, means an outage of a Matching Engine or collective
Matching Engines for a period of two consecutive hours or more,
during trading hours. The term Matching Engine, which is also
defined in the Definitions section of the Fee Schedule, is a part of
the MIAX PEARL electronic system that processes options orders and
trades on a symbol-by-symbol basis. Some Matching Engines will
process option classes with multiple root symbols, and other
Matching Engines may be dedicated to one single option root symbol
(for example, options on SPY may be processed by one single Matching
Engine that is dedicated only to SPY). A particular root symbol may
only be assigned to a single designated Matching Engine. A
particular root symbol may not be assigned to multiple Matching
Engines. The Exchange believes that it is reasonable and appropriate
to select two consecutive hours as the amount of time necessary to
constitute an Exchange System Disruption, as two hours equates to
approximately 1.4% of available trading time per month. The Exchange
notes that the term ``Exchange System Disruption'' and its meaning
have no applicability outside of the Fee Schedule, as it is used
solely for purposes of calculating volume for the threshold tiers in
the Fee Schedule. See the Definitions Section of the Fee Schedule.
    \7\ ``Affiliate'' means (i) an affiliate of a Member of at least
75% common ownership between the firms as reflected on each firm's
Form BD, Schedule A, or (ii) the Appointed Market Maker of an
Appointed EEM (or, conversely, the Appointed EEM of an Appointed
Market Maker). An ``Appointed Market Maker'' is a MIAX PEARL Market
Maker (who does not otherwise have a corporate affiliation based
upon common ownership with an EEM) that has been appointed by an EEM
and an ``Appointed EEM'' is an EEM (who does not otherwise have a
corporate affiliation based upon common ownership with a MIAX PEARL
Market Maker) that has been appointed by a MIAX PEARL Market Maker,
pursuant to the process described in the Fee Schedule. See the
Definitions Section of the Fee Schedule.
    \8\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
    \9\ See Securities Exchange Act Release No. 79778 (January 12,
2017), 82 FR 6662 (January 19, 2017) (SR-PEARL-2016-01).
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    Transaction rebates and fees applicable to all Market Makers are
currently assessed according to the following table:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Per contract rebates/fees for   Per contract rebates/fees for
                                                                                Penny classes                 Non-Penny classes
              Origin                     Tier                  Volume criteria           ---------------------------------------------------------------
                                                                                Maker           Taker           Maker           Taker
--------------------------------------------------------------------------------------------------------------------------------------------------------
All MIAX..........................               1  0.00%-0.10%.........................         ($0.25)           $0.50         ($0.30)           $1.05
PEARL.............................               2  Above 0.10%-0.50%...................          (0.40)            0.48          (0.60)            1.03
 Market...........................               3  Above 0.50%-0.75%...................          (0.45)            0.47          (0.65)            1.02
Makers............................               4  Above 0.75%.........................          (0.48)            0.47          (0.70)            1.02
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Exchange proposes to increase the ``Maker'' rebate amount in
Tier 3 for Penny classes from ($0.45) to ($0.47). The purpose of
increasing the amount of the rebate is to provide a greater incentive
to Market Makers to reach Tier 3, thereby increasing the potential for
executing more volume at the Exchange and consequently receiving a
higher rebate. The Exchange believes that increased Maker volume by
Market Makers in Penny classes will attract more liquidity to the
Exchange, which in turn will benefit all market participants.
    The Exchange also proposes to add a new, alternative Volume
Criteria to Tier 3 based upon the total monthly volume executed by a
Market Maker solely in SPY options on MIAX PEARL, expressed as a
percentage of total consolidated national volume in SPY options.
Pursuant to this alternative Volume Criteria, a Market Maker can now
reach the Tier 3 threshold if the Market Maker's total executed monthly
volume in SPY options on MIAX PEARL is above 2.0% of total consolidated
national monthly volume in SPY options. To be clear, volume that is
from resting liquidity (Maker) and taking liquidity (Taker) in SPY
options are counted towards this alternative Volume Criteria.
Accordingly, a Market Maker could now qualify for Tier 3 rebates and
fees which will then be applicable to all volume executed by the Market
Maker on MIAX PEARL. The two Volume Criteria available for Tier 3 are
now based upon either: (a) The total monthly volume executed by the
Market Maker in all options classes on MIAX PEARL, not including
Excluded Contracts, (as the numerator), expressed as a percentage of
(divided by) TCV (as the denominator); or (b) the total monthly volume
executed by the Market Maker solely in SPY options on MIAX PEARL, not
including Excluded Contracts, (as the numerator), expressed as a
percentage of (divided by) SPY TCV (as the denominator). Once either
Volume Criteria threshold in Tier 3 is reached by the Market Maker, the
Tier 3 per contract rebates and fees will apply to all volume in all
options classes executed by that Market Maker on MIAX PEARL.
    In addition to modifying the MIAX PEARL Market Maker table to
insert the new, alternative Volume Criteria threshold in Tier 3, in
order to provide a clear explanation of the requirements for achieving
that alternative Volume Criteria threshold in Tier 3, the Exchange is
proposing to (i) amend the explanatory paragraph beneath the tables in
Section 1(a) of the Fee Schedule, and (ii) add a new definition of
``SPY TCV'' to the Definitions Section of the Fee Schedule. The amended
explanatory paragraph will clarify that (except as otherwise set forth
in the Fee Schedule) the existing Volume Criteria threshold measures
volume in all options classes on MIAX PEARL, and that the new,
alternative Volume Criteria threshold in Tier 3 for Market Makers
measures volume solely in SPY options on MIAX PEARL. The new definition
of SPY TCV in the Definitions Section shall provide the following:
``SPY TCV'' means total consolidated volume in SPY calculated as the
total national volume in SPY for the month for which the fees apply,
excluding consolidated volume executed during the period of time in
which the Exchange experiences an Exchange System Disruption (solely in
SPY options).
    The Exchange believes that the proposed alternative Volume Criteria
threshold in Tier 3 for Market Makers will provide another opportunity
for those Market Makers that concentrate their trading activity in
limited options classes such as SPY options to reach a higher tier. The
Exchange believes that creating this alternative Volume Criteria will
extend the Tier 3 fee incentives to Market Makers that concentrate
their trading activity by sending significant volume in SPY options as
compared to other Market Makers that do trade in the broad range of
products listed on the Exchange.
    Finally, the Exchange is proposing to make a minor, non-substantive
technical correction to the definition of ``TCV'' to insert the word
``of'' in between the words ``period'' and ``time.'' This word was
inadvertently left out of the sentence when the definition of ``TCV''
was initially adopted, on February 6, 2017.\10\
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    \10\ See Securities Exchange Act Release No. 80061 (February 17,
2017), 82 FR 11676 (February 24, 2017) (SR-PEARL-2017-10).
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    The proposed rule change is scheduled to become operative May 1,
2017.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \11\ in general, and
furthers the objectives of Section 6(b)(4) of the Act,\12\ in that it
is an equitable allocation of reasonable fees and other charges among
Exchange members and other persons using its facilities, and 6(b)(5) of
the Act,\13\ 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.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4).
    \13\ 15 U.S.C. 78f(b)(1) and (b)(5).
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    The proposed Maker rebate increase in Penny classes applicable to
Market Makers that reach the Tier 3 threshold is reasonable, equitable
and not unfairly discriminatory because all similarly situated Market
Makers are subject to the same tiered rebates and fees and access to
the Exchange is offered on terms that are not unfairly discriminatory.
The Exchange initially set its Maker rebates at the various volume
levels based upon business determinations and an analysis of current
Maker rebates and volume levels at other exchanges. For competitive and
business reasons, the Exchange believes that a higher rebate to Market
Makers that add liquidity in Penny classes in a higher tier will
encourage Market Makers to execute more volume as a Maker in Penny
classes. The Exchange believes for these reasons that offering a higher
Maker rebate for transactions in Penny classes in Tier 3 for Market
Makers is equitable, reasonable and not

unfairly discriminatory, and thus consistent with the Act.
    Furthermore, the proposed increase to the Maker rebate amount in
Penny classes for Market Makers that reach Tier 3 promotes just and
equitable principles of trade, fosters cooperation and coordination
with persons engaged in facilitating transactions in securities, and
protects investors and the public interest because the proposed
increase in the rebate amount encourages Market Makers to send more
orders to the Exchange which add liquidity in order to achieve higher
thresholds and resulting higher rebates. To the extent that order flow
which adds liquidity in Penny classes is increased by the proposal,
market participants will increasingly compete for the opportunity to
trade on the Exchange, including sending more orders to reach higher
tiers. The resulting increased volume and liquidity will benefit all
Exchange participants by providing more trading opportunities and
tighter spreads.
    The Exchange's proposal to adopt the new, alternative Volume
Criteria for Tier 3 based on SPY volume executed on the Exchange is
reasonable, equitable, and not unfairly discriminatory, as it is a form
of pricing based upon trading activity in a select symbol, which is a
common practice on many U.S. options exchanges as a means to
incentivize order flow to be sent to an exchange for execution in
actively traded options classes. The Exchange's affiliate, Miami
International Securities Exchange, LLC (``MIAX Options''), offers
enhanced pricing for transactions in options underlying certain select
symbols.\14\ SPY options are the most actively traded class. Other
options exchanges' fee schedules distinguish by symbol and specifically
assess different fees and rebates for transactions in select symbols
and some exclusively for transactions in SPY options for the same
market participants.\15\
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    \14\ See MIAX Options Fee Schedule, Section (1)(a)(iii).
    \15\ See Chicago Board Options Exchange Incorporated (``CBOE'')
Fees Schedule; see also NASDAQ PHLX LLC (``PHLX'') Pricing Schedule,
Chapter B, Section I; see further International Securities Exchange
LLC (``ISE'') Fee Schedule, Sections I and II.
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    The Exchange is offering an alternative Tier 3 Volume Criteria
threshold based on SPY options volume in Tier 3 because, as previously
mentioned, SPY options are the most actively traded options in the
industry, and therefore the Exchange believes that incentivizing Market
Makers that concentrate their trading activity in SPY options will
consequently increase order flow sent to the Exchange, which will
benefit all market participants through increased liquidity, tighter
markets and order interaction.
    The Exchange believes that the proposed non-substantive, technical
correction will promote just and equitable principles of trade, remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it will improve the readability of the
rules. The proposed change does not alter the application of the rule.
As such, the proposed change would foster cooperation and coordination
with persons engaged in facilitating transactions in securities and
would remove impediments to and perfect the mechanism of a free and
open market and a national market system. In particular, the Exchange
believes that the proposed rule change will provide greater clarity to
Members and the public regarding 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.

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

    MIAX PEARL does not believe that the proposed rule changes will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed Maker rebate
increase is intended to encourage the posting of liquidity. The
proposed rule change should enable the Exchange to attract and compete
for order flow with other exchanges and the greater rebate for adding
liquidity will encourage Market Makers to submit more order flow that
adds liquidity, not removes it. The Exchange also believes that paying
greater rebates may create competition among market participants.
However, this competition does not create an undue burden on
competition but rather offers all market participants the opportunity
to receive the benefit of the enhanced pricing.
    Further, the Exchange believes that the proposed alternative Volume
Criteria threshold in Tier 3 based on SPY options volume applicable to
Market Makers provides greater incentives to those Market Makers that
concentrate their trading activity in SPY options to send additional
SPY orders and creates additional opportunity for additional liquidity
to the market.
    The Exchange does not believe that the proposed rule change to make
a technical correction to its rules will impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act. The proposed rule change is not designed to address any
competitive issues but rather is designed to add additional clarity and
to remedy a minor, non-substantive issue in the text of a definition in
the Fee Schedule.
    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 rebates and 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,\16\ and Rule 19b-4(f)(2) \17\ thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \17\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or

     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-PEARL-2017-19 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-PEARL-2017-19. 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-PEARL-2017-19 and should be
submitted on or before May 31, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09421 Filed 5-9-17; 8:45 am]
 BILLING CODE 8011-01-P