[Federal Register Volume 86, Number 23 (Friday, February 5, 2021)]
[Notices]
[Pages 8455-8464]
[FR Doc No: 2021-02405]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91033; File No. SR-EMERALD-2021-03]

Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule To Adopt Monthly Trading Permit Fees

February 1, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 22, 2021, MIAX Emerald, LLC (``MIAX Emerald'' 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 Emerald Fee
Schedule (the ``Fee Schedule'') to establish monthly Trading Permit \3\
fees for Exchange Members.\4\
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    \3\ The term ``Trading Permit'' means a permit issued by the
Exchange that confers the ability to transact on the Exchange. See
Exchange Rule 100.
    \4\ 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 and the Definitions Section of the Fee Schedule.
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    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/emerald, at MIAX's
principal office, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend the Fee Schedule to adopt monthly
Trading Permit fees (the ``Proposed Access Fees'') depending on the
Member's status as either an Electronic Exchange Member (``EEM'') \5\
or as a Market Maker.\6\ MIAX Emerald commenced

operations as a national securities exchange registered under Section 6
of the Act \7\ on March 1, 2019.\8\ The Exchange adopted its
transaction fees and certain of its non-transaction fees in its filing
SR-EMERALD-2019-15.\9\ In that filing, the Exchange expressly waived,
among other fees, the Proposed Access Fees for the Waiver Period,\10\
to provide an incentive to prospective EEMs and Market Makers to become
Members of the Exchange. When the Exchange adopted the framework for
its fees, it stated that it would provide notice to market participants
when the Exchange intended to terminate the Waiver Period for the
Proposed Access Fees. Accordingly, on September 15, 2020, the Exchange
issued a Regulatory Circular which announced that the Exchange would be
ending the Waiver Period for the Proposed Access Fees, among other non-
transaction fees, beginning October 1, 2020.\11\
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    \5\ ``Electronic Exchange Member'' or ``EEM'' means the holder
of a Trading Permit who is not a Market Maker. Electronic Exchange
Members are deemed ``members'' under the Exchange Act. See Exchange
Rule 100 and the Definitions Section of the Fee Schedule.
    \6\ The term ``Market Makers'' refers to ``Lead Market Makers'',
``Primary Lead Market Makers'' and ``Registered Market Makers''
collectively. See Exchange Rule 100 and the Definitions Section of
the Fee Schedule.
    \7\ 15 U.S.C. 78f.
    \8\ See Securities Exchange Act Release No. 84891 (December 20,
2018), 83 FR 67421 (December 28, 2018) (File No. 10-233) (order
approving application of MIAX Emerald, LLC for registration as a
national securities exchange).
    \9\ See Securities Exchange Act Release No. 85393 (March 21,
2019), 84 FR 11599 (March 27, 2019) (SR-EMERALD-2019-15) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Establish the MIAX Emerald Fee Schedule).
    \10\ ``Waiver Period'' means, for each applicable fee, the
period of time from the initial effective date of the MIAX Emerald
Fee Schedule until such time that the Exchange has an effective fee
filing establishing the applicable fee. The Exchange will issue a
Regulatory Circular announcing the establishment of an applicable
fee that was subject to a Waiver Period at least fifteen (15) days
prior to the termination of the Waiver Period and effective date of
any such applicable fee. See the Definitions Section of the Fee
Schedule.
    \11\ See MIAX Emerald Regulatory Circular 2020-41 available at
https://www.miaxoptions.com/sites/default/files/circular-files/MIAX_Emerald_RC_2020_41.pdf.
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    The Exchange initially filed its proposal to establish the Proposed
Access Fees on October 1, 2020.\12\ The First Proposed Rule Change was
published for comment in the Federal Register on October 21, 2020.\13\
On November 25, 2020, the Exchange withdrew the First Proposed Rule
Change \14\ and refiled its proposal to establish monthly Trading
Permit fees.\15\ The Second Proposed Rule Change was published for
comment in the Federal Register on December 14, 2020.\16\ The Exchange
notes that the Second Proposed Rule Change did not receive any comment
letters. Nonetheless, on January 22, 2021, the Exchange withdrew the
Second Proposed Rule Change and resubmitted this proposal.\17\
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    \12\ See Securities Exchange Act Release Nos. 90196 (October 15,
2020), 85 FR 67064 (October 21, 2020) (SR-EMERALD-2020-11) (Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule To Adopt One-Time Membership Application Fees
and Monthly Trading Permit Fees) (the ``First Proposed Rule
Change''). The Exchange notes that it refiled its proposal to
establish the one-time membership application fee in a separate
filing. See SR-EMERALD-2021-01.
    \13\ See id.
    \14\ See Comment Letter from Joseph W. Ferraro III, SVP, Deputy
General Counsel, the Exchange, dated November 20, 2020, notifying
the Commission that the Exchange will withdraw the First Proposed
Rule Change.
    \15\ See Securities Exchange Act Release Nos. 90601 (December 8,
2020), 85 FR 80864 (December 14, 2020) (SR-EMERALD-2020-18) (the
``Second Proposed Rule Change'').
    \16\ See id.
    \17\ See Comment Letter from Joseph W. Ferraro III, SVP, Deputy
General Counsel, the Exchange, dated January 15, 2021, notifying the
Commission that the Exchange will withdraw the Second Proposed Rule
Change.
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    Trading Permits are issued to Members who are either EEMs or Market
Makers. Trading Permits grant access to the Exchange, thus providing
the ability to quote and trade on the Exchange, in the manner defined
in the relevant Trading Permit. Without a Trading Permit, a Member
cannot directly trade on the Exchange. Therefore, a Trading Permit is a
means to directly access the Exchange (which offers meaningful value),
and the Exchange now proposes to adopt a monthly fee designed to
recover a portion of the costs associated with directly accessing the
Exchange. The Exchange proposes to assess the Proposed Access Fees
depending upon the category of Member that is issued a Trading Permit.
Members issued Trading Permits during a calendar month will be assessed
monthly Trading Permit Fees. The Exchange notes that the Exchange's
affiliate, Miami International Securities Exchange, LLC (``MIAX''),
charges a similar, fixed trading permit fee to its EEMs, and a similar,
varying trading permit fee to its Market Makers, based upon the number
of assignments of option classes or the percentage of volume in option
classes.\18\
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    \18\ See the MIAX Fee Schedule, Section 3)b).
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    The Exchange proposes that monthly Trading Permit fees will be
assessed, with respect to the calculation of such fee to EEMs (other
than clearing firms), in any month the EEM is certified in the
membership system and is credentialed to use one or more Financial
Information Exchange (``FIX'') \19\ ports in the production
environment. Further, the Exchange proposes that monthly Trading Permit
fees will be assessed with respect to EEM clearing firms in any month
the clearing firm is certified in the membership system to clear
transactions on the Exchange.
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    \19\ ``FIX Port'' means an interface with MIAX Emerald systems
that enables the Port user to submit simple and complex orders
electronically to MIAX Emerald. See the Definitions Section of the
Fee Schedule.
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    The Exchange proposes to assess EEMs a monthly fee of $1,000 for
each Trading Permit. Below is the proposed table showing the Trading
Permit fees for EEMs:

------------------------------------------------------------------------
                                                               Monthly
                                                                 MIAX
                  Type of trading  permit                      Emerald
                                                               trading
                                                              permit fee
------------------------------------------------------------------------
Electronic Exchange Member.................................    $1,000.00
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    The Exchange proposes to assess monthly Trading Permit fees for
Market Makers in any month the Market Maker (including a Registered
Market Maker, Lead Market Maker, and Primary Lead Market Maker) is
certified in the membership system, is credentialed to use one or more
MIAX Emerald Express Interface (``MEI'') \20\ ports in the production
environment and is assigned to quote in one or more classes.
Specifically, the Exchange proposes to adopt the following Trading
Permit fees for Market Makers: (i) $7,000 for Market Maker Assignments
in up to 10 option classes or up to 20% of option classes by national
average daily volume (``ADV''); (ii) $12,000 for Market Maker
Assignments in up to 40 option classes or up to 35% of option classes
by ADV; (iii) $17,000 for Market Maker Assignments in up to 100 option
classes or up to 50% of option classes by ADV; and (iv) $22,000 for
Market Maker Assignments in over 100 option classes or over 50% of
option classes by ADV up to all option classes listed on MIAX Emerald.
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    \20\ The MEI is a connection to the MIAX Emerald System that
enables Market Makers to submit simple and complex electronic quotes
to MIAX Emerald. The Exchange offers Full Service MEI Ports, which
provide Market Makers with the ability to send Market Maker simple
and complex quotes, eQuotes, and quote purge messages to the MIAX
Emerald System. Full Service MEI Ports are also capable of receiving
administrative information. Market Makers are limited to two Full
Service MEI Ports per Matching Engine. The Exchange also offers
Limited Service MEI Ports, which provide Market Makers with the
ability to send simple and complex eQuotes and quote purge messages
only, but not Market Maker Quotes, to the MIAX Emerald System.
Limited Service MEI Ports are also capable of receiving
administrative information. Market Makers initially receive two
Limited Service MEI Ports per Matching Engine. See the Definitions
Section of the Fee Schedule.
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    The Exchange also proposes to adopt an alternative lower Trading
Permit fee for Market Makers who fall within the following Trading
Permit fee levels, which represent the 3rd and 4th levels of the Market
Maker Trading Permit fee

table: (i) Market Maker Assignments in up to 100 option classes or up
to 50% of option classes by volume; and (ii) Market Maker Assignments
in over 100 option classes or over 50% of option classes by volume up
to all option classes listed on MIAX Emerald. Specifically, the
Exchange proposes to adopt footnote ``[ssquf]'' following the Market
Maker Trading Permit fee table for these Monthly Trading Permit tier
levels, if the Market Maker's total monthly executed volume during the
relevant month is less than 0.025% of the total monthly executed volume
reported by OCC in the customer account type for MIAX Emerald-listed
option classes for that month, then the fee will be $15,500 instead of
the fee otherwise applicable to such level.
    Below is the proposed table showing the Trading Permit fees for
Market Makers:

----------------------------------------------------------------------------------------------------------------
                                                          Market maker assignments (the lesser of the applicable
                                           Monthly MIAX                     measurements below)
         Type of trading permit               Emerald    -------------------------------------------------------
                                          trading permit                                 % of National average
                                                fee                Per class                 daily volume
----------------------------------------------------------------------------------------------------------------
Market Maker (includes RMM, LMM, PLMM)..       $7,000.00  Up to 10 Classes..........  Up to 20% of Classes by
                                                                                volume.
                                               12,000.00  Up to 40 Classes..........  Up to 35% of Classes by
                                                                                volume.
                                                 [ssquf]  Up to 100 Classes.........  Up to 50% of Classes by
                                               17,000.00                               volume
                                                 [ssquf]  Over 100 Classes..........  Over 50% of Classes by
                                               22,000.00                               volume up to all Classes
                                                                                listed on MIAX Emerald.
----------------------------------------------------------------------------------------------------------------
[ssquf] For these Monthly MIAX Emerald Trading Permit tier levels, if the Market Maker's total monthly executed
  volume during the relevant month is less than 0.025% of the total monthly executed volume reported by OCC in
  the customer account type for MIAX Emerald-listed option classes for that month, then the fee will be $15,500
  instead of the fee otherwise applicable to such level.

    For the calculation of the monthly Market Maker Trading Permit
fees, the number of classes is defined as the greatest number of
classes the Market Maker was assigned to quote in on any given day
within the calendar month and the class volume percentage is based on
the total national ADV in classes listed on MIAX Emerald in the prior
calendar quarter. Newly listed option classes are excluded from the
calculation of the monthly Market Maker Trading Permit fee until the
calendar quarter following their listing, at which time the newly
listed option classes will be included in both the per class count and
the percentage of total national average daily volume. The Exchange
proposes to assess MIAX Emerald Market Makers the monthly Market Maker
Trading Permit fee based on the greatest number of classes listed on
MIAX Emerald that the Market Maker was assigned to quote in on any
given day within a calendar month and the applicable fee rate that is
the lesser of either the per class basis or percentage of total
national ADV measurement.
    The purpose of the alternative lower fee designated in proposed
footnote ``[ssquf]'' is to provide a lower fixed cost to those Market
Makers who are willing to quote the entire Exchange market (or
substantial amount of the Exchange market), as objectively measured by
either number of classes assigned or national ADV, but who do not
otherwise execute a significant amount of volume on the Exchange. The
Exchange believes that, by offering lower fixed costs to Market Makers
that execute less volume, the Exchange will retain and attract smaller-
scale Market Makers, which are an integral component of the option
marketplace, but have been decreasing in number in recent years, due to
industry consolidation and lower market maker profitability. Since
these smaller-scale Market Makers utilize less Exchange capacity due to
lower overall volume executed, the Exchange believes it is reasonable
and equitable to offer such Market Makers a lower fixed cost. The
Exchange notes that the Exchange's affiliate, MIAX, provides a similar
alternative lower Trading Permit fee for Market Makers who quote the
entire MIAX market (or substantial amount of the MIAX market), as
objectively measured by either number of classes assigned or national
ADV, but who do not otherwise execute a significant amount of volume on
MIAX.\21\ The Exchange also notes that other options exchanges assess
certain of their membership fees at different rates, based upon a
member's participation on that exchange,\22\ and, as such, this concept
is not new or novel. The proposed changes to the Trading Permit fees
for Market Makers who fall within the 3rd and 4th levels of the fee
table are based upon a business determination of current Market Maker
assignments and trading volume.
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    \21\ See supra note 18.
    \22\ See e.g., NYSE Arca Options Fees and Charges, p.1
(assessing market makers $6,000 for up to 175 option issues, an
additional $5,000 for up to 350 option issues, an additional $4,000
for up to 1,000 option issues, an additional $3,000 for all option
issues on the exchange, and an additional $1,000 for the fifth
trading permit and for each trading permit thereafter); NYSE
American Options Fee Schedule, p. 23 (assessing market makers $8,000
for up to 60 plus the bottom 45% of option issues, an additional
$6,000 for up to 150 plus the bottom 45% of option issues, an
additional $5,000 for up to 500 plus the bottom 45% of option
issues, and additional $4,000 for up to 1,100 plus the bottom 45% of
option issues, an additional $3,000 for all issues traded on the
exchange, and an additional $2,000 for 6th to 9th ATPs; plus an
addition fee for premium products). See also Cboe BZX Options
Exchange (``BZX Options'') assesses the Participant Fee, which is a
membership fee, according to a member's ADV. See Cboe BZX Options
Exchange Fee Schedule under ``Membership Fees''. The Participant Fee
is $500 if the member ADV is less than 5000 contracts and $1,000 if
the member ADV is equal to or greater than 5000 contracts. Id.
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    MIAX Emerald believes that exchanges, in setting fees of all types,
should meet very high standards of transparency to demonstrate why each
new fee or fee increase meets the requirements of the Act that fees be
reasonable, equitably allocated, not unfairly discriminatory, and not
create an undue burden on competition among members and markets. MIAX
Emerald believes this high standard is especially important when an
exchange imposes various access fees for market participants to access
an exchange's marketplace. MIAX Emerald deems Trading Permit fees to be
access fees. It records these fees as part of its ``Access Fees''
revenue in its financial statements. The Exchange believes that it is
important to demonstrate that these fees are based on its costs and
reasonable business needs. The Exchange believes the Proposed Access
Fees will allow the Exchange to offset expense the Exchange has and
will incur, and that the Exchange is providing sufficient transparency
(as described below) into how the Exchange determined to charge such
fees. Accordingly, the Exchange is providing

an analysis of its revenues, costs, and profitability associated with
the Proposed Access Fees. This analysis includes information regarding
its methodology for determining the costs and revenues associated with
the Proposed Access Fees.
    In order to determine the Exchange's costs to provide the access
services associated with the Proposed Access Fees, the Exchange
conducted an extensive cost review in which the Exchange analyzed every
expense item in the Exchange's general expense ledger to determine
whether each such expense relates to the Proposed Access Fees, and, if
such expense did so relate, what portion (or percentage) of such
expense actually supports the access services. The sum of all such
portions of expenses represents the total cost of the Exchange to
provide the access services associated with the Proposed Access Fees.
For the avoidance of doubt, no expense amount was allocated twice. The
Exchange is also providing detailed information regarding the
Exchange's cost allocation methodology--namely, information that
explains the Exchange's rationale for determining that it was
reasonable to allocate certain expenses described in this filing
towards the cost to the Exchange to provide the access services
associated with the Proposed Access Fees.
    In order to determine the Exchange's projected revenues associated
with the Proposed Access Fees, the Exchange analyzed the number of
Members currently utilizing the Trading Permits, and, utilizing a
recent monthly billing cycle representative of 2020 monthly revenue,
extrapolated annualized revenue on a going-forward basis. The Exchange
does not believe it is appropriate to factor into its analysis future
revenue growth or decline into its projections for purposes of these
calculations, given the uncertainty of such projections due to the
continually changing access needs of market participants, discounts
that can be achieved due to lower trading volume and vice versa, market
participant consolidation, etc. Additionally, the Exchange similarly
does not factor into its analysis future cost growth or decline. The
Exchange is presenting its revenue and expense associated with the
Proposed Access Fees in this filing in a manner that is consistent with
how the Exchange presents its revenue and expense in its Audited
Unconsolidated Financial Statements. The Exchange's most recent Audited
Unconsolidated Financial Statement is for 2019. However, since the
revenue and expense associated with the Proposed Access Fees were not
in place in 2019 or for the first three quarters of 2020, the Exchange
believes its 2019 Audited Unconsolidated Financial Statement is not
useful for analyzing the reasonableness of the total annual revenue and
costs associated with the Proposed Access Fees. Accordingly, the
Exchange believes it is more appropriate to analyze the Proposed Access
Fees utilizing its 2020 revenue and costs, as described herein, which
utilize the same presentation methodology as set forth in the
Exchange's previously-issued Audited Unconsolidated Financial
Statements. Based on this analysis, the Exchange believes that the
Proposed Access Fees are fair and reasonable because they will not
result in excessive pricing or supra-competitive profit when comparing
the Exchange's total annual expense associated with providing the
services associated with the Proposed Access Fees versus the total
projected annual revenue the Exchange will collect for providing those
services.
* * * * *
    On March 29, 2019, the Commission issued its Order Disapproving
Proposed Rule Changes to Amend the Fee Schedule on the BOX Market LLC
Options Facility to Establish BOX Connectivity Fees for Participants
and Non-Participants Who Connect to the BOX Network (the ``BOX
Order'').\23\ On May 21, 2019, the Commission issued the Staff Guidance
on SRO Rule Filings Relating to Fees.\24\ Accordingly, the Exchange
believes that the Proposed Access Fees are consistent with the Act
because they (i) are reasonable, equitably allocated, not unfairly
discriminatory, and not an undue burden on competition; (ii) comply
with the BOX Order and the Guidance; (iii) are supported by evidence
(including comprehensive revenue and cost data and analysis) that they
are fair and reasonable because they not result in excessive pricing or
supra-competitive profit; and (iv) utilize a cost-based justification
framework that is substantially similar to a framework previously used
by the Exchange to establish other non-transaction fees. Accordingly,
the Exchange believes that the Commission should find that the Proposed
Access Fees are consistent with the Act.
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    \23\ See Securities Exchange Act Release No. 85459 (March 29,
2019), 84 FR 13363 (April 4, 2019) (SR-BOX-2018-24, SR-BOX-2018-37,
and SR-BOX-2019-04).
    \24\ See Staff Guidance on SRO Rule Filings Relating to Fees
(May 21, 2019), at https://www.sec.gov/tm/staff-guidance-sro-rule-filings-fees (the ``Guidance'').
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    The proposed rule change is immediately effective upon filing with
the Commission pursuant to Section 19(b)(3)(A) of the Act.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \25\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \26\ in
particular, in that it is an equitable allocation of reasonable dues,
fees and other charges among its members and issuers and other persons
using its facilities. The Exchange also believes the proposal furthers
the objectives of Section 6(b)(5) of the Act in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest and is not designed to permit unfair discrimination between
customers, issuers, brokers and dealers.
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    \25\ 15 U.S.C. 78f(b).
    \26\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange launched trading on March 1, 2019. For the month of
December 2020, the Exchange had only a 3.58% market share of the U.S.
options industry.\27\ The Exchange is not aware of any evidence that a
market share of approximately 3.6% provides the Exchange with anti-
competitive pricing power. If the Exchange were to attempt to establish
unreasonable pricing, then no market participant would join or connect,
and existing market participants would disconnect.
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    \27\ See The Options Clearing Corporation (``OCC'') publishes
options and futures volume in a variety of formats, including daily
and monthly volume by exchange, available here: https://www.theocc.com/market-data/volume/default.jsp.
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    Separately, the Exchange is not aware of any reason why market
participants could not simply drop their access to an exchange (or not
initially access an exchange) if an exchange were to establish prices
for its non-transaction fees that, in the determination of such market
participant, did not make business or economic sense for such market
participant to access such exchange. No options market participant is
required by rule, regulation, or competitive forces to be a Member of
the Exchange. As evidence of the fact that market participants can and
do drop their access to exchanges based on non-transaction fee pricing,
R2G Services LLC (``R2G'') filed a comment letter after BOX's proposed
rule changes to increase its connectivity fees (SR-BOX-2018-24, SR-BOX-
2018-37, and SR-BOX-2019-04). The R2G Letter stated, ``[w]hen BOX
instituted a $10,000/month price increase for connectivity;

we had no choice but to terminate connectivity into them as well as
terminate our market data relationship. The cost benefit analysis just
didn't make any sense for us at those new levels.'' Since the Exchange
issued its notice instituting the Proposed Access Fees, one Member
dropped its access to the Exchange as a result of the Proposed Access
Fees. Accordingly, these examples show that if an exchange sets too
high of a fee for connectivity and/or other non-transaction fees for
its relevant marketplace, market participants can choose to drop their
access to such exchange.
    The Exchange believes that its proposal is consistent with Section
6(b)(4) of the Act because the Proposed Access Fees will not result in
excessive or supra-competitive profit. The costs associated with
providing access to Exchange Members and non-Members, as well as the
general expansion of a state-of-the-art infrastructure, are extensive,
have increased year-over-year, and are projected to increase year-over-
year in the future. In particular, the Exchange has experienced a
material increase in its costs in 2020, in connection with a project to
make its network environment more transparent and deterministic, based
on customer demand. This project will allow the Exchange to enhance its
network architecture with the intent of ensuring a best-in-class,
transparent and deterministic trading system while maintaining its
industry leading latency and throughput capabilities. In order to
provide this greater amount of transparency and higher determinism,
MIAX Emerald has made significant capital expenditures (``CapEx''),
incurred increased ongoing operational expenditures (``OpEx''), and
undertaken additional engineering research and development (``R&D'') in
the following areas: (i) Implementing an improved network design to
ensure the minimum latency between multicast market data signals
disseminated by the Exchange across the extranet switches, improving
the unicast jitter profile to reduce the occurrence of message sequence
inversions from Members to the Exchange quoting gateway processors, and
introducing a new optical fiber network infrastructure that ensures the
optical fiber path for participants within extremely tight tolerances;
(ii) introducing a re-architected and engineered participant quoting
gateway that ensures the delivery of messages to the match engine with
absolute determinism, eliminating the message processing inversions
that can occur with messages received nanoseconds apart; and (iii)
designing an improved monitoring platform to better measure the
performance of the network and systems at extremely tight tolerances
and to provide Members with reporting on the performance of their
systems. The CapEx associated with only phase 1 of this project in 2020
was approximately $1.85 million. This expense does not include the
significant increase in employee time and other resources necessary to
maintain and service this network, which expense is captured in the
operating expense discussed below. This project, which results in a
material increase in expense of the Exchange, is, among other things,
intended to enhance the overall trading experience at the Exchange,
making it a venue that market participants want to access.
    The Exchange believes the proposed Trading Permit fees are
equitably allocated between EEMs and Market Makers, when these fees are
viewed in the context of the overall trading volume on the Exchange, as
Market Makers: (1) Consume the most bandwidth and resources of the
network; (2) transact the vast majority of the volume on the Exchange;
and (3) require the high touch network support services provided by the
Exchange and its staff, including more costly network monitoring,
reporting and support services, resulting in a much higher cost to the
Exchange. Further, the Exchange believes the Proposed Access Fees are
equitably allocated because of customer demand for an even more
transparent and deterministic network, as described above, which has
resulted in higher CapEx, increasingly higher OpEx, and increased costs
to engineering R&D. The Proposed Access Fees are equitably allocated in
this regard because the majority of customer demand is coming from
Market Makers, who transact the vast majority of volume on the
Exchange. Accordingly, the Exchange believes it is reasonable,
equitably allocated and not unfairly discriminatory to recoup the
majority of its costs associated with providing Trading Permits from
Market Makers quoting the most classes on the Exchange.
    The Exchange believes that the proposed Trading Permit fees are
equitably allocated between EEMs and Market Makers, as Market Makers
consume the most bandwidth and resources of the network. Specifically,
the Exchange notes that these users account for approximately greater
than 99% of message traffic over the network, while EEMs account for
approximately less than 1% of message traffic over the network. In the
Exchange's experience, most EEMs do not have a business need for the
high performance network solutions required by Market Makers. The
Exchange's high performance network solutions and supporting
infrastructure (including employee support), provides unparalleled
system throughput and the capacity to handle approximately 18 million
quote messages per second. On an average day, the Exchange handles over
approximately 3 billion total messages. Of those, Market Makers
generate approximately 3 billion messages, and EEMs generate 500,000
messages. However, in order to achieve a consistent, premium network
performance, the Exchange must build out and maintain a network that
has the capacity to handle the message rate requirements of its most
heavy network consumers. These billions of messages per day consume the
Exchange's resources and significantly contribute to the overall
expense for storage and network transport capabilities. Given this
difference in network utilization rate, the Exchange believes that it
is reasonable, equitable, and not unfairly discriminatory that Market
Makers pay for the vast majority of the access costs designed to be
recovered via Trading Permit fees.
    In order to provide more detail and to quantify the Exchange's
costs associated with providing access to the Exchange in general, the
Exchange notes that there are material costs associated with providing
the infrastructure and headcount to fully-support access to the
Exchange. The Exchange incurs technology expense related to
establishing and maintaining Information Security services, enhanced
network monitoring and customer reporting, as well as Regulation SCI
mandated processes, associated with its network technology. While some
of the expense is fixed, much of the expense is not fixed, and thus
increases as the services associated with the Proposed Access Fees
increase. For example, new Market Makers to the Exchange may require
the purchase of additional hardware to support those Members as well as
enhanced monitoring and reporting of customer performance that MIAX
Emerald and its affiliates provide. Further, as the total number Market
Makers increase, MIAX Emerald and its affiliates may need to increase
their data center footprint and consume more power, resulting in
increased costs charged by their third-party data center provider.
Accordingly, the cost to MIAX Emerald and its affiliates to provide
access to its Members is not fixed. The Exchange believes the Proposed
Access

Fees are reasonable in order to offset a portion of the costs to the
Exchange associated with providing access to its network
infrastructure.
    Market Makers account for the vast majority of network capacity
utilization and volume executed on the Exchange, as discussed
throughout. Accordingly, the Exchange believes that it is reasonable
and appropriate to charge Market Makers more than EEMs for Trading
Permits to access the Exchange.
    The Exchange only has four primary sources of revenue: transaction
fees, access fees (which includes the Proposed Access Fees), regulatory
fees, and market data fees. Accordingly, the Exchange must cover all of
its expenses from these four primary sources of revenue.
    The Exchange believes that the Proposed Access Fees are fair and
reasonable because they will not result in excessive pricing or supra-
competitive profit, when comparing the total annual expense that the
Exchange projects to incur in connection with providing these access
services versus the total annual revenue that the Exchange projects to
collect in connection with the associated Trading Permit fees. For
2020,\28\ the total annual expense for providing the access services
associated with the Proposed Access Fees for MIAX Emerald is projected
to be approximately $2.5 million. The $2.5 million in projected total
annual expense is comprised of the following, all of which are directly
related to the access services associated with the Proposed Access
Fees: (1) Third-party expense, relating to fees paid by MIAX Emerald to
third-parties for certain products and services; and (2) internal
expense, relating to the internal costs of MIAX Emerald to provide the
services associated with the Proposed Access Fees. As noted above, the
Exchange believes it is more appropriate to analyze the Proposed Access
Fees utilizing its 2020 revenue and costs, which utilize the same
presentation methodology as set forth in the Exchange's previously-
issued Audited Unconsolidated Financial Statements.\29\ The $2.5
million in projected total annual expense is directly related to the
access services associated with the Proposed Access Fees, and not any
other product or service offered by the Exchange. It does not include
general costs of operating matching systems and other trading
technology, and no expense amount was allocated twice.
---------------------------------------------------------------------------

    \28\ The Exchange has not yet finalized its 2020 year end
results.
    \29\ For example, the Exchange previously noted that all third-
party expense described in its prior fee filing was contained in the
information technology and communication costs line item under the
section titled ``Operating Expenses Incurred Directly or Allocated
From Parent,'' in the Exchange's 2019 Form 1 Amendment containing
its financial statements for 2018. See Securities Exchange Act
Release No. 87877 (December 31, 2019), 85 FR 738 (January 7, 2020)
(SR-EMERALD-2019-39). Accordingly, the third-part expense described
in this filing is attributed to the same line item for the
Exchange's 2020 Form 1 Amendment, which will be filed in 2021.
---------------------------------------------------------------------------

    As discussed, the Exchange conducted an extensive cost review in
which the Exchange analyzed every expense item in the Exchange's
general expense ledger (this includes over 150 separate and distinct
expense items) to determine whether each such expense relates to the
access services associated with the Proposed Access Fees, and, if such
expense did so relate, what portion (or percentage) of such expense
actually supports those services, and thus bears a relationship that
is, ``in nature and closeness,'' directly related to those services.
The sum of all such portions of expenses represents the total cost of
the Exchange to provide access services associated with the Proposed
Access Fees.
    For 2020, total third-party expense, relating to fees paid by MIAX
Emerald to third-parties for certain products and services for the
Exchange to be able to provide the access services associated with the
Proposed Access Fees, is projected to be $190,621. This includes, but
is not limited to, a portion of the fees paid to: (1) Equinix, for data
center services, for the primary, secondary, and disaster recovery
locations of the MIAX Emerald trading system infrastructure; (2) Zayo
Group Holdings, Inc. (``Zayo'') for network services (fiber and
bandwidth products and services) linking MIAX Emerald's office
locations in Princeton, NJ and Miami, FL to all data center locations;
(3) Secure Financial Transaction Infrastructure (``SFTI''),\30\, which
supports connectivity and feeds for the entire U.S. options industry;
(4) various other services providers (including Thompson Reuters, NYSE,
Nasdaq, and Internap), which provide content, connectivity services,
and infrastructure services for critical components of options
connectivity and network services; and (5) various other hardware and
software providers (including Dell and Cisco, which support the
production environment in which Members connect to the network to
trade, receive market data, etc.).
---------------------------------------------------------------------------

    \30\ In fact, on October 22, 2019, the Exchange was notified by
SFTI that it is again raising its fees charged to the Exchange by
approximately 11%, without having to show that such fee change
complies with the Act by being reasonable, equitably allocated, and
not unfairly discriminatory. It is unfathomable to the Exchange
that, given the critical nature of the infrastructure services
provided by SFTI, that its fees are not required to be rule-filed
with the Commission pursuant to Section 19(b)(1) of the Act and Rule
19b-4 thereunder. See 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b-4,
respectively.
---------------------------------------------------------------------------

    For clarity, only a portion of all fees paid to such third-parties
is included in the third-party expense herein, and no expense amount is
allocated twice. Accordingly, MIAX Emerald does not allocate its entire
information technology and communication costs to the access services
associated with the Proposed Access Fees.
    The Exchange believes it is reasonable to allocate such third-party
expense described above towards the total cost to the Exchange to
provide the access services associated with the Proposed Access Fees.
In particular, the Exchange believes it is reasonable to allocate the
identified portion of the Equinix expense because Equinix operates the
data centers (primary, secondary, and disaster recovery) that host the
Exchange's network infrastructure. This includes, among other things,
the necessary storage space, which continues to expand and increase in
cost, power to operate the network infrastructure, and cooling
apparatuses to ensure the Exchange's network infrastructure maintains
stability. Without these services from Equinix, the Exchange would not
be able to operate and support the network and provide the access
services associated with the Proposed Access Fees to its Members and
their customers. The Exchange did not allocate all of the Equinix
expense toward the cost of providing the access services associated
with the Proposed Access Fees, only that portion which the Exchange
identified as being specifically mapped to providing the access
services associated with the Proposed Access Fees, approximately 10% of
the total Equinix expense. The Exchange believes this allocation is
reasonable because it represents the Exchange's actual cost to provide
the access services associated with the Proposed Access Fees, and not
any other service, as supported by its cost review.
    The Exchange believes it is reasonable to allocate the identified
portion of the Zayo expense because Zayo provides the internet, fiber
and bandwidth connections with respect to the network, linking MIAX
Emerald with its affiliates, MIAX and MIAX PEARL, LLC (``MIAX PEARL''),
as well as the data center and disaster recovery locations. As such,
all of the trade data, including the billions of messages each day per
exchange, flow through Zayo's

infrastructure over the Exchange's network. Without these services from
Zayo, the Exchange would not be able to operate and support the network
and provide the access services associated with the Proposed Access
Fees. The Exchange did not allocate all of the Zayo expense toward the
cost of providing the access services associated with the Proposed
Access Fees, only the portion which the Exchange identified as being
specifically mapped to providing the Proposed Access Fees,
approximately 1% of the total Zayo expense. The Exchange believes this
allocation is reasonable because it represents the Exchange's actual
cost to provide the access services associated with the Proposed Access
Fees, and not any other service, as supported by its cost review.
    The Exchange believes it is reasonable to allocate the identified
portions of the SFTI expense and various other service providers'
(including Thompson Reuters, NYSE, Nasdaq, and Internap) expense
because those entities provide connectivity and feeds for the entire
U.S. options industry, as well as the content, connectivity services,
and infrastructure services for critical components of the network.
Without these services from SFTI and various other service providers,
the Exchange would not be able to operate and support the network and
provide access to its Members and their customers. The Exchange did not
allocate all of the SFTI and other service providers' expense toward
the cost of providing the access services associated with the Proposed
Access Fees, only the portions which the Exchange identified as being
specifically mapped to providing the access services associated with
the Proposed Access Fees, approximately 1% of the total SFTI and other
service providers' expense. The Exchange believes this allocation is
reasonable because it represents the Exchange's actual cost to provide
the access services associated with the Proposed Access Fees.
    The Exchange believes it is reasonable to allocate the identified
portion of the other hardware and software provider expense because
this includes costs for dedicated hardware licenses for switches and
servers, as well as dedicated software licenses for security monitoring
and reporting across the network. Without this hardware and software,
the Exchange would not be able to operate and support the network and
provide access to its Members and their customers. The Exchange did not
allocate all of the hardware and software provider expense toward the
cost of providing the access services associated with the Proposed
Access Fees, only the portions which the Exchange identified as being
specifically mapped to providing the access services associated with
the Proposed Access Fees, approximately 10% of the total hardware and
software provider expense. The Exchange believes this allocation is
reasonable because it represents the Exchange's actual cost to provide
the access services associated with the Proposed Access Fees.
    For 2020, total projected internal expense, relating to the
internal costs of MIAX Emerald to provide the access services
associated with the Proposed Access Fees, is projected to be
$2,046,137. This includes, but is not limited to, costs associated
with: (1) employee compensation and benefits for full-time employees
that support the access services associated with the Proposed Access
Fees, including staff in network operations, trading operations,
development, system operations, business, as well as staff in general
corporate departments (such as legal, regulatory, and finance) that
support those employees and functions (including an increase as a
result of the higher determinism project); (2) depreciation and
amortization of hardware and software used to provide the access
services associated with the Proposed Access Fees, including equipment,
servers, cabling, purchased software and internally developed software
used in the production environment to support the network for trading;
and (3) occupancy costs for leased office space for staff that provide
the access services associated with the Proposed Access Fees. The
breakdown of these costs is more fully-described below. For clarity,
only a portion of all such internal expenses are included in the
internal expense herein, and no expense amount is allocated twice.
Accordingly, MIAX Emerald does not allocate its entire costs contained
in those items to the access services associated with the Proposed
Access Fees.
    The Exchange believes it is reasonable to allocate such internal
expense described above towards the total cost to the Exchange to
provide the access services associated with the Proposed Access Fees.
In particular, MIAX Emerald's employee compensation and benefits
expense relating to providing the access services associated with the
Proposed Access Fees is projected to be $1,403,101, which is only a
portion of the $9,354,009 total projected expense for employee
compensation and benefits. The Exchange believes it is reasonable to
allocate the identified portion of such expense because this includes
the time spent by employees of several departments, including
Technology, Back Office, Systems Operations, Networking, Business
Strategy Development (who create the business requirement documents
that the Technology staff use to develop network features and
enhancements), Trade Operations, Finance (who provide billing and
accounting services relating to the network), and Legal (who provide
legal services relating to the network, such as rule filings and
various license agreements and other contracts). As part of the
extensive cost review conducted by the Exchange, the Exchange reviewed
the amount of time spent by each employee on matters relating to the
provision of access services associated with the Proposed Access Fees.
Without these employees, the Exchange would not be able to provide the
access services associated with the Proposed Access Fees to its Members
and their customers. The Exchange did not allocate all of the employee
compensation and benefits expense toward the cost of the access
services associated with the Proposed Access Fees, only the portions
which the Exchange identified as being specifically mapped to providing
the access services associated with the Proposed Access Fees,
approximately 15% of the total employee compensation and benefits
expense. The Exchange believes this allocation is reasonable because it
represents the Exchange's actual cost to provide the access services
associated with the Proposed Access Fees, and not any other service, as
supported by its cost review.
    MIAX Emerald's depreciation and amortization expense relating to
providing the access services associated with the Proposed Access Fees
is projected to be $571,888, which is only a portion of the $3,812,590
total projected expense for depreciation and amortization. The Exchange
believes it is reasonable to allocate the identified portion of such
expense because such expense includes the actual cost of the computer
equipment, such as dedicated servers, computers, laptops, monitors,
information security appliances and storage, and network switching
infrastructure equipment, including switches and taps that were
purchased to operate and support the network and provide the access
services associated with the Proposed Access Fees. Without this
equipment, the Exchange would not be able to operate the network and
provide the access services associated with the Proposed Access Fees to
its Members and their customers. The

Exchange did not allocate all of the depreciation and amortization
expense toward the cost of providing the access services associated
with the Proposed Access Fees, only the portion which the Exchange
identified as being specifically mapped to providing the access
services associated with the Proposed Access Fees, approximately 15% of
the total depreciation and amortization expense, as these access
services would not be possible without relying on such. The Exchange
believes this allocation is reasonable because it represents the
Exchange's actual cost to provide the access services associated with
the Proposed Access Fees, and not any other service, as supported by
its cost review.
    MIAX Emerald's occupancy expense relating to providing the access
services associated with the Proposed Access Fees is projected to be
$71,148, which is only a portion of the $474,323 total projected
expense for occupancy. The Exchange believes it is reasonable to
allocate the identified portion of such expense because such expense
represents the portion of the Exchange's cost to rent and maintain a
physical location for the Exchange's staff who operate and support the
network, including providing the access services associated with the
Proposed Access Fees. This amount consists primarily of rent for the
Exchange's Princeton, NJ office, as well as various related costs, such
as physical security, property management fees, property taxes, and
utilities. The Exchange operates its Network Operations Center
(``NOC'') and Security Operations Center (``SOC'') from its Princeton,
New Jersey office location. A centralized office space is required to
house the staff that operates and supports the network. The Exchange
currently has approximately 150 employees. Approximately two-thirds of
the Exchange's staff are in the Technology department, and the majority
of those staff have some role in the operation and performance of the
access services associated with the proposed Trading Permit fees.
Without this office space, the Exchange would not be able to operate
and support the network and provide the access services associated with
the Proposed Access Fees to its Members and their customers.
Accordingly, the Exchange believes it is reasonable to allocate the
identified portion of its occupancy expense because such amount
represents the Exchange's actual cost to house the equipment and
personnel who operate and support the Exchange's network infrastructure
and the access services associated with the Proposed Access Fees. The
Exchange did not allocate all of the occupancy expense toward the cost
of providing the access services associated with the Proposed Access
Fees, only the portion which the Exchange identified as being
specifically mapped to operating and supporting the network,
approximately 15% of the total occupancy expense. The Exchange believes
this allocation is reasonable because it represents the Exchange's cost
to provide the access services associated with the Proposed Access
Fees, and not any other service, as supported by its cost review.
    The Exchange notes that a material portion of its total overall
expense is allocated to the provision of access services (including
connectivity, ports, and trading permits). The Exchange believes this
is reasonable and in line, as the Exchange operates a technology-based
business that differentiates itself from its competitors based on its
trading systems that rely on access to a high performance network,
resulting in significant technology expense. Over two-thirds of
Exchange staff are technology-related employees. The majority of the
Exchange's expense is technology-based. As described above, the
Exchange has only four primary sources of fees in to recover its costs,
thus the Exchange believes it is reasonable to allocate a material
portion of its total overall expense towards access fees.
    Accordingly, based on the facts and circumstances presented, the
Exchange believes that its provision of the access services associated
with the Proposed Access Fees will not result in excessive pricing or
supra-competitive profit. To illustrate, on a going-forward, fully-
annualized basis, the Exchange projects that its annualized revenue for
providing the access services associated with the Proposed Access Fees
would be approximately $2.5 million per annum, based on a recent
billing cycle. The Exchange projects that its annualized expense for
providing the access services associated with the Proposed Access Fees
would be approximately $2,236,758 per annum. Accordingly, on a fully-
annualized basis, the Exchange believes its total projected revenue for
the providing the access services associated with the Proposed Access
Fees will not result in excessive pricing or supra-competitive profit,
as the Exchange will make only a 10% profit margin on the Proposed
Access Fees ($2.5 million-$2,236,758 = $263,242 per annum). The
Exchange notes that the fee charged to each Market Maker for Trading
Permits can vary from month to month depending on the number of classes
in which the Market Maker was assigned to quote on any given day within
the calendar month, and upon certain class volume percentages. The
Exchange also provides a further discount for a Market Maker's Trading
Permit fees if the Market Maker's total monthly executed volume during
the relevant month is less than 0.025% of the total monthly executed
volume reported by OCC in the customer account type for MIAX Emerald-
listed option classes for that month. As such, the revenue projection
is not a static number, with monthly Trading Permit fees likely to
fluctuate month to month.
    For the avoidance of doubt, none of the expenses included herein
relating to the access services associated with the Proposed Access
Fees relate to the provision of any other services offered by MIAX
Emerald. Stated differently, no expense amount of the Exchange is
allocated twice. The Exchange notes that, with respect to the MIAX
Emerald expenses included herein, those expenses only cover the MIAX
Emerald market; expenses associated with the Exchange's affiliate
exchanges, MIAX and MIAX PEARL, are accounted for separately and are
not included within the scope of this filing. Stated differently, no
expense amount of the Exchange is also allocated to MIAX or MIAX PEARL.
    The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to allocate the respective percentages of each expense
category described above towards the total cost to the Exchange of
operating and supporting the network, including providing the access
services associated with the Proposed Access Fees because the Exchange
performed a line-by-line item analysis of all the expenses of the
Exchange, and has determined the expenses that directly relate to
providing access to the Exchange. Further, the Exchange notes that,
without the specific third-party and internal items listed above, the
Exchange would not be able to provide the access services associated
with the Proposed Access Fees to its Members and their customers. Each
of these expense items, including physical hardware, software, employee
compensation and benefits, occupancy costs, and the depreciation and
amortization of equipment, have been identified through a line-by-line
item analysis to be integral to providing access services. The Proposed
Access Fees are intended to recover the Exchange's costs of providing
access to Exchange Systems. Accordingly, the Exchange believes that the
Proposed Access Fees are fair and reasonable

because they do not result in excessive pricing or supra-competitive
profit, when comparing the actual costs to the Exchange versus the
projected annual revenue from the Proposed Access Fees.
    Further, the Exchange no longer believes it is necessary to waive
these fees to attract market participants to MIAX Emerald since this
market is now established and MIAX Emerald no longer needs to rely on
such waivers to attract market participants. The Exchange believes that
the proposal is equitable and not unfairly discriminatory because the
elimination of the fee waiver for the Proposed Access Fees will
uniformly apply to all EEMs and Market Makers of the Exchange. The
Exchange also notes that the Exchange's affiliate, MIAX, charges a
similar, fixed trading permit fee to its EEMs, and a similar, varying
trading permit fee to its Market Makers, based upon the number of
assignments of option classes or the percentage of volume in option
classes.\31\
---------------------------------------------------------------------------

    \31\ See supra note 18.
---------------------------------------------------------------------------

    The Exchange believes that the Proposed Access Fees are reasonable,
equitable and not unfairly discriminatory because they are within the
range of comparable fees at other competing options exchanges.\32\ The
Proposed Access Fees are fair and equitable and not unreasonably
discriminatory because they apply equally to all Market Makers
regardless of type and access to the Exchange is offered on terms that
are not unfairly discriminatory. The Exchange designed the fee rates in
order to provide objective criteria for Market Makers of different
sizes and business models that best matches their quoting activity on
the Exchange. The Exchange notes that trading volume and quoting
activity in the options market tends to be concentrated in the top
ranked options classes; with the vast majority of options classes being
thinly quoted and traded. The Exchange believes that the proposed fee
rates and criteria provide an objective and flexible framework that
will encourage Market Makers to be assigned and quote in option classes
with lower total national average daily volume while also equitably
allocating the fees in a reasonable manner amongst Market Maker
assignments to account for quoting and trading activity.
---------------------------------------------------------------------------

    \32\ See supra note 22.
---------------------------------------------------------------------------

    Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive. In such an environment, the Exchange must continually adjust
its fees for services and products, in addition to order flow, to
remain competitive with other exchanges. The Exchange believes that the
proposed changes reflect this competitive environment.
    The Exchange also points out that it is not seeking to recoup any
of its past costs associated with the provision of any Trading Permits
during the Waiver Period. The Exchange currently has 35 Members,\33\
all of whom did not pay Trading Permit fees during the Waiver Period
from the time these firms all became Members of the Exchange. Further,
the majority of firms that are Members of the Exchange's affiliate
options exchanges, MIAX and MIAX PEARL, also became Members of those
exchanges during similar Waiver Periods for the MIAX and MIAX PEARL
Trading Permit fees. Accordingly, the Exchange (and MIAX and MIAX
PEARL) have assumed approximately 100% of the costs associated with
providing Trading Permits for the majority of Member firms of the
Exchange, MIAX, and MIAX PEARL during their respective Waiver Periods.
Accordingly, the Exchange believes that it is reasonable, equitable,
and not unfairly discriminatory to now adopt Trading Permit fees that
are reasonably related to (and designed to recover) the Exchange's cost
associated with the provision of such Trading Permits.
---------------------------------------------------------------------------

    \33\ See https://www.miaxoptions.com/exchange-members/emerald.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
Intra-Market Competition
    The Exchange believes that the Proposed Access Fees do not place
certain market participants at a relative disadvantage to other market
participants because the Proposed Access Fees do not favor certain
categories of market participants in a manner that would impose a
burden on competition; rather, the fee rates are designed in order to
provide objective criteria for Market Makers of different sizes and
business models that best matches their quoting activity on the
Exchange. The Exchange notes that trading volume and quoting activity
in the options market tends to be concentrated in the top ranked
options classes; with the vast majority of options classes being thinly
quoted and traded. The Exchange believes that the proposed fee rates
and criteria provide an objective and flexible framework that will
encourage Market Makers to be assigned and quote in option classes with
lower total national average daily volume while also equitably
allocating the fees in a reasonable manner amongst Market Maker
assignments to account for quoting and trading activity.
Inter-Market Competition
    The Exchange believes the Proposed Access Fees do not place an
undue burden on competition on other SROs that is not necessary or
appropriate. In particular, options market participants are not forced
to become members of all options exchanges. The Exchange notes that it
has far less Members as compared to the much greater number of members
at other options exchanges. There are a number of large market makers
and broker-dealers that are members of other options exchange but not
Members of MIAX Emerald. The Exchange is also unaware of any assertion
that its existing fee levels or the Proposed Access Fees would somehow
unduly impair its competition with other options exchanges. To the
contrary, if the fees charged are deemed too high by market
participants, they can simply discontinue their membership with the
Exchange.
    The Exchange operates in a highly competitive market in which
market participants can readily favor one of the 15 competing options
venues if they deem fee levels at a particular venue to be excessive.
Based on publicly-available information, and excluding index-based
options, no single exchange has more than 16% market share. Therefore,
no exchange possesses significant pricing power in the execution of
multiply-listed equity and ETF options order flow. For the month of
December 2020, the Exchange had a market share of approximately 3.6% of
executed multiply-listed equity options \34\ and the Exchange believes
that the ever-shifting market share among exchanges from month to month
demonstrates that market participants can discontinue or reduce use of
certain categories of products, or shift order flow, in response to fee
changes. In such an environment, the Exchange must continually adjust
its fees and fee waivers to remain competitive with other exchanges and
to attract order flow to the Exchange.
---------------------------------------------------------------------------

    \34\ See supra note 27.

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

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,\35\ and Rule 19b-4(f)(2) \36\ 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.
---------------------------------------------------------------------------

    \35\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \36\ 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-EMERALD-2021-03 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-EMERALD-2021-03. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-EMERALD-2021-03 and should be submitted
on or before February 26, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-02405 Filed 2-4-21; 8:45 am]
BILLING CODE 8011-01-P


CONDUCT OF HUMAN VOLUNTEER STUDIES:

ETHICS & METHODOLOGIES Angus Cameron From 1985 to Feb 2002 Regulatory Affairs Manager at Inveresk Research, Tranent, Scotland Responsible for coordination of Independent Inveresk Research Ethics Committee 4 April 2006 Inveresk Research ° One of world's largest, full service, Contract Research Organisations ( CROs)

° Pre clinical testing in animals   pharmaceuticals ( human and veterinary), agrochemicals,

industrial chemicals ° Clinical testing in humans   healthy volunteer studies ( Phase I) and patient studies ( Phase II and III)

° Phase I Studies   testing of new and established molecules conducted in healthy volunteers at 62 bed clinical unit in Edinburgh Independent Inveresk Research Ethics Committee ° Committee established in 1979 to   " advise Inveresk Research on the ethical acceptability of clinical research"

° Written Constitution and committee processes controlled by SOPs   Standard Operating Procedures reviewed annually ° Initially, 21CFR ( FDA) used   USA only country with " codified" regulations ° Compliance with   Declaration of Helsinki   " Common Rule"

  Good Clinical Practice ( GCP) in accordance with ICH   UK/ RCP and UK/ ABPI recommendations Independent Inveresk Research Ethics Committee ° Committee comprises panel of approx 30 members   Hospital consultants ( physicians, haematologists,

obstetricians, neurologists, psychiatrists)

  General practitioners   Nurses   Lay ( ministers of religion, housewives, administrator)

° None of members has any affiliation with Inveresk Research or study sponsors   Compare with " Common Rule" IRB requirements   " at least one not affiliated with institution" Independent Inveresk Research Ethics Committee Process at meeting ° Chairman gives overview of study ° Roundtable discussion   input from each member ° Issues of concern minuted by committee secretary   all comments are unattributed and given equal weight ° Consensus is required   all members must agree to ethical acceptability of all studies ° Detailed draft Minutes prepared   sent to Chairman for approval and countersigning Independent Inveresk Research Ethics Committee Process after meeting ° Final approved Minutes   circulated to all committee members, Inveresk medical staff,

sponsoring company ° Responses to Minutes   issues raised must be responded to by clinical investigator in conjunction with study sponsor ° Responses plus amended documents   Sent to chairman for review and approval   Rarely whole committee requests to approve amendments ° Study cannot commence until   Formally approved minutes, approved protocol, consent and volunteer information available Safety ° Inveresk Research procedures are designed   To ensure complete safety of all subjects in all studies   To ensure highest ethical standards are met ° This is achieved by   Fully documented safety review process   Completely independent ethical review of all clinical studies   Careful selection of all volunteers   Intensive monitoring of volunteers by experienced medical and nursing staff   Conducting studies in a fully equipped clinical setting


[Federal Register: July 31, 2009 (Volume 74, Number 146)]
[Notices]
[Page 38209]
[DOCID:fr31jy09-77]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2009-N-0352]

Preparation for International Cooperation on Cosmetics
Regulations Meetings in Tokyo, Japan; Public Meeting

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of public meeting.

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SUMMARY: The Food and Drug Administration (FDA) is announcing a public
meeting entitled ``International Cooperation on Cosmetics Regulations
(ICCR)--Preparation for ICCR--3 Meetings in Tokyo, Japan'' to provide
information and receive comments on the International Cooperation on
Cosmetics Regulations (ICCR) as well as the upcoming meetings in Tokyo,
Japan. The topics to be discussed are the topics for discussion at the
forthcoming ICCR steering committee meeting. The purpose of the meeting
is to solicit public input prior to the next steering committee and
expert working group meetings in Tokyo, Japan, scheduled for the week
of September 7, 2009.
    Date and Time: The meeting will be held on September 2, 2009, from
1:30 p.m. to 3 p.m.
    Location: The meeting will be held in University Station, rm. 2073,
4300 River Rd., College Park, MD 20740.
    Contact Person: All participants must register with Mary Morrison,
Office of the Commissioner (HFG-1), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857, e-mail<EMAIL_ADDRESS>
FAX:<PHONE_NUMBER>.
    Registration and Requests for Oral Presentations: Send registration
information (including name, title, firm name, address, telephone, and
fax number), written material and requests to make oral presentation,
to the contact person by August 30, 2009.
    If you need special accommodations due to a disability, please
contact Mary Morrison (see Contact Person) at least 7 days in advance.
    Transcripts: Please be advised that as soon as a transcript is
available, it will be accessible at http://www.regulations.gov. It may
be viewed at the Division of Dockets Management (HFA-305), Food and
Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD. A
transcript will also be available in either hardcopy or on CD-ROM,
after submission of a Freedom of Information request. Written requests
are to be sent to the Division of Freedom of Information (HFI-35),
Office of Management Programs, Food and Drug Administration, 5600
Fishers Lane, rm. 6-30, Rockville, MD 20857.

SUPPLEMENTARY INFORMATION: The purpose of the multilateral framework on
the ICCR is to pave the way for the removal of regulatory obstacles to
international trade while maintaining global consumer protection.
    ICCR is a voluntary international group of cosmetics regulatory
authorities from the United States, Japan, the European Union, and
Canada. These regulatory authority members will enter into constructive
dialogue with their relevant cosmetics' industry trade associations.
Currently, the ICCR members are Health Canada; the European Directorate
General for Enterprise and Industry; the Ministry of Health, Labor and
Welfare of Japan; and the U.S. Food and Drug Administration. All
decisions made by the consensus will be compatible with the laws,
policies, rules, regulations, and directives of the respective
administrations and governments. Members will implement and/or promote
actions or documents within their own jurisdictions and seek
convergence of regulatory policies and practices. Successful
implementation will require input from stakeholders.
    Interested persons may present data, information, or views orally
or in writing, on issues pending at the public meeting. Time allotted
for oral presentations may be limited to 10 minutes. Those desiring to
make oral presentations should notify the contact person by August 30,
2009, and submit a brief statement of the general nature of the
evidence or arguments they wish to present, the names and addresses,
telephone number, fax, and e-mail of proposed participants, and an
indication of the approximate time requested to make their
presentation.
    The agenda for the public meeting will be made available on the
Internet at http://www.fda.gov/Cosmetics/InternationalActivities/
ConferencesMeetingsWorkshops/
InternationalCooperationonCosmeticsRegulationsICCR/default.htm.

    Dated: July 27, 2009.
Jeffrey Shuren,
Associate Commissioner for Policy and Planning.
[FR Doc. E9-18321 Filed 7-30-09; 8:45 am]

BILLING CODE 4160-01-S


[Federal Register Volume 77, Number 36 (Thursday, February 23, 2012)]
[Notices]
[Pages 10737-10738]
[FR Doc No: 2012-4185]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 2

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER12-1075-000
    Applicants: Xcel Energy Services Inc.
    Description: Notice of Termination of Service Schedule A to the
Municipal Interconnection and Interchange

Agreement between Northern States Power Company, a Minnesota
Corporation and the City of Buffalo.
    Filed Date: 2/14/12.
    Accession Number: 20120214-5059.
    Comments Due: 5 pm ET 3/6/12.

    Docket Numbers: ER12-922-000.
    Applicants: Phillips 66 Company.
    Description: Supplemental Information of Market Based Rate for
Phillips 66 Company.
    Filed Date: 2/14/12.
    Accession Number: 20120214-5074.
    Comments Due: 5 pm ET 2/28/12.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
pm Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: February 14, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-4185 Filed 2-22-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 79, Number 137 (Thursday, July 17, 2014)]
[Notices]
[Pages 41740-41741]
[FR Doc No: 2014-16797]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2004-17195; FMCSA-2011-0380; FMCSA-2012-0160]

Qualification of Drivers; Exemption Applications; Vision

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of renewal of exemptions; request for comments.

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SUMMARY: FMCSA announces its decision to renew the exemptions from the
vision requirement in the Federal Motor Carrier Safety Regulations for
5 individuals. FMCSA has statutory authority to exempt individuals from
the vision requirement if the exemptions granted will not compromise
safety. The Agency has concluded that granting these exemption renewals
will provide a level of safety that is equivalent to or greater than
the level of safety maintained without the exemptions for these
commercial motor vehicle (CMV) drivers.

DATES: This decision is effective August 27, 2014. Comments must be
received on or before August 18, 2014.

ADDRESSES: You may submit comments bearing the Federal Docket
Management System (FDMS) numbers: Docket No. [Docket No. FMCSA-2004-
17195; FMCSA-2011-0380; FMCSA-2012-0160], using any of the following
methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the on-line instructions for submitting
comments.
     Mail: Docket Management Facility; U.S. Department of
Transportation, 1200 New Jersey Avenue SE., West Building Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and
5 p.m., Monday through Friday, except Federal Holidays.
     Fax: 1-202-493-2251.
    Instructions: Each submission must include the Agency name and the
docket number for this notice. Note that DOT posts all comments
received without change to http://www.regulations.gov, including any
personal information included in a comment. Please see the Privacy Act
heading below.
    Docket: For access to the docket to read background documents or
comments, go to http://www.regulations.gov at any time or Room W12-140
on the ground level of the West Building, 1200 New Jersey Avenue SE.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The Federal Docket Management System (FDMS) is
available 24 hours each day, 365 days each year. If you want
acknowledgment that we received your comments, please include a self-
addressed, stamped envelope or postcard or print the acknowledgement
page that appears after submitting comments on-line.
    Privacy Act: Anyone may search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or of the person signing the comment, if
submitted on behalf of an association, business, labor union, etc.).
You may review DOT's Privacy Act Statement for the Federal Docket
Management System (FDMS) published in the Federal Register on January
17, 2008 (73 FR 3316).

FOR FURTHER INFORMATION CONTACT: Elaine M. Papp, Chief, Medical
Programs Division,<PHONE_NUMBER><EMAIL_ADDRESS>FMCSA,
Department of Transportation, 1200 New Jersey Avenue SE., Room W64-224,
Washington, DC 20590-0001. Office hours are from 8:30 a.m. to 5 p.m.
Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Background

    Under 49 U.S.C. 31136(e) and 31315, FMCSA may renew an exemption
from the vision requirements in 49 CFR 391.41(b)(10), which applies to
drivers of CMVs in interstate commerce, for a two-year period if it
finds ``such exemption would likely achieve a level of safety that is
equivalent to or greater than the level that would be achieved

absent such exemption.'' The procedures for requesting an exemption
(including renewals) are set out in 49 CFR part 381.

Exemption Decision

    This notice addresses 5 individuals who have requested renewal of
their exemptions in accordance with FMCSA procedures. FMCSA has
evaluated these 5 applications for renewal on their merits and decided
to extend each exemption for a renewable two-year period. They are:

Manuel A. Almeida (MA)
Kerry L. Baxter (UT)
Tyrane Harper (AL)
Gregory S. Smith (AR)
Scotty W. Sparks (KY)

    The exemptions are extended subject to the following conditions:
(1) That each individual has a physical examination every year (a) by
an ophthalmologist or optometrist who attests that the vision in the
better eye continues to meet the requirements in 49 CFR 391.41(b)(10),
and (b) by a medical examiner who attests that the individual is
otherwise physically qualified under 49 CFR 391.41; (2) that each
individual provides a copy of the ophthalmologist's or optometrist's
report to the medical examiner at the time of the annual medical
examination; and (3) that each individual provide a copy of the annual
medical certification to the employer for retention in the driver's
qualification file and retains a copy of the certification on his/her
person while driving for presentation to a duly authorized Federal,
State, or local enforcement official. Each exemption will be valid for
two years unless rescinded earlier by FMCSA. The exemption will be
rescinded if: (1) The person fails to comply with the terms and
conditions of the exemption; (2) the exemption has resulted in a lower
level of safety than was maintained before it was granted; or (3)
continuation of the exemption would not be consistent with the goals
and objectives of 49 U.S.C. 31136(e) and 31315.

Basis for Renewing Exemptions

    Under 49 U.S.C. 31315(b)(1), an exemption may be granted for no
longer than two years from its approval date and may be renewed upon
application for additional two year periods. In accordance with 49
U.S.C. 31136(e) and 31315, each of the 5 applicants has satisfied the
entry conditions for obtaining an exemption from the vision
requirements (69 FR 17263; 69 FR 31447; 71 FR 43557; 73 FR 42403; 75 FR
38602; 77 FR 17109; 77 FR 27845; 77 FR 38381; 77 FR 40946; 77 FR
51846). Each of these 5 applicants has requested renewal of the
exemption and has submitted evidence showing that the vision in the
better eye continues to meet the requirement specified at 49 CFR
391.41(b)(10) and that the vision impairment is stable. In addition, a
review of each record of safety while driving with the respective
vision deficiencies over the past two years indicates each applicant
continues to meet the vision exemption requirements. These factors
provide an adequate basis for predicting each driver's ability to
continue to drive safely in interstate commerce. Therefore, FMCSA
concludes that extending the exemption for each renewal applicant for a
period of two years is likely to achieve a level of safety equal to
that existing without the exemption.

Request for Comments

    FMCSA will review comments received at any time concerning a
particular driver's safety record and determine if the continuation of
the exemption is consistent with the requirements at 49 U.S.C. 31136(e)
and 31315. However, FMCSA requests that interested parties with
specific data concerning the safety records of these drivers submit
comments by August 18, 2014.
    FMCSA believes that the requirements for a renewal of an exemption
under 49 U.S.C. 31136(e) and 31315 can be satisfied by initially
granting the renewal and then requesting and evaluating, if needed,
subsequent comments submitted by interested parties. As indicated
above, the Agency previously published notices of final disposition
announcing its decision to exempt these 5 individuals from the vision
requirement in 49 CFR 391.41(b)(10). The final decision to grant an
exemption to each of these individuals was made on the merits of each
case and made only after careful consideration of the comments received
to its notices of applications. The notices of applications stated in
detail the qualifications, experience, and medical condition of each
applicant for an exemption from the vision requirements. That
information is available by consulting the above cited Federal Register
publications.
    Interested parties or organizations possessing information that
would otherwise show that any, or all, of these drivers are not
currently achieving the statutory level of safety should immediately
notify FMCSA. The Agency will evaluate any adverse evidence submitted
and, if safety is being compromised or if continuation of the exemption
would not be consistent with the goals and objectives of 49 U.S.C.
31136(e) and 31315, FMCSA will take immediate steps to revoke the
exemption of a driver.

Submitting Comments

    You may submit your comments and material online or by fax, mail,
or hand delivery, but please use only one of these means. FMCSA
recommends that you include your name and a mailing address, an email
address, or a phone number in the body of your document so that FMCSA
can contact you if there are questions regarding your submission.
    To submit your comment online, go to http://www.regulations.gov and
in the search box insert the docket numbers FMCSA-2004-17195; FMCSA-
2011-0380; FMCSA-2012-0160 and click the search button. When the new
screen appears, click on the blue ``Comment Now!'' button on the right
hand side of the page. On the new page, enter information required
including the specific section of this document to which each comment
applies, and provide a reason for each suggestion or recommendation. If
you submit your comments by mail or hand delivery, submit them in an
unbound format, no larger than 8\1/2\ by 11 inches, suitable for
copying and electronic filing. If you submit comments by mail and would
like to know that they reached the facility, please enclose a stamped,
self-addressed postcard or envelope.
    We will consider all comments and material received during the
comment period and may change this proposed rule based on your
comments. FMCSA may issue a final rule at any time after the close of
the comment period.

Viewing Comments and Documents

    To view comments, as well as any documents mentioned in this
preamble, To submit your comment online, go to http://www.regulations.gov and in the search box insert the docket number
FMCSA-2004-17195; FMCSA-2011-0380; FMCSA-2012-0160 and click
``Search.'' Next, click ``Open Docket Folder'' and you will find all
documents and comments related to the proposed rulemaking.

    Issued on: July 10, 2014.
 Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2014-16797 Filed 7-16-14; 8:45 am]
BILLING CODE 4910-EX-P