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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices quotes and orders and allow for a higher throughput rates than other ports offered by the Exchange, such as FIX
ports.8
Full Service MEO Ports are of two types: Bulk and Single.9 An options Member using Full Service MEO Ports may be allocated up to two 2 Full Service MEO Ports for each Matching Engine to which it connects two Bulk, two Single, or one of each, and the monthly fee for Full Service MEO Port use will be determined by volume, according to tiered schedules.10 More specifically, the Exchange assesses Members Full Service MEO Port fees based upon the monthly total volume executed by a Member and its Affiliates 11 on the Exchange across all origin types, not including Excluded Contracts,12 as compared to the Total Consolidated Volume TCV,13 in all MIAX Pearl-listed options, with separate schedules for Bulk and Single.
The Exchange proposes to increase fees for all Full Service MEO Port as follows:
For Full Service MEO PortsBulk, if the Members relevant monthly volume falls within the parameters of:
Tier 1 up to 0.30% TCV: The monthly fee would increase from $3,000
to $5,000;
Tier 2 above 0.30%, up to 0.60%
TCV: The monthly fee would increase from $4,500 to $7,500; and Tier 3 above 0.60% TCV: The monthly fee would increase from $5,000
to $10,000.
For Full Service MEO PortsSingle, if the Members relevant monthly volume falls within the parameters of:
8 See
Notice, supra note 5, at 37349.
Notice, supra note 5, at 37348 n. 56. Full Service MEO PortBulk means an MEO port that supports all MEO input message types and binary bulk order entry Full Service MEO PortSingle means an MEO port that supports all MEO input message types and binary order entry on a single order-by-order basis, but not bulk orders.
10 See Notice, supra note 5, at 37348. The Exchange states that it currently has twelve matching engines, which means that for a single monthly fee, a Member may receive up to twentyfour Full Service MEO Ports for that single fee. Id.
11 Affiliate means i an affiliate of a Member of at least 75% common ownership between the firms as reflected on each firms Form BD, Schedule A, or ii the Appointed Market Maker of an Appointed EEM or, conversely, the Appointed EEM of an Appointed Market Maker. See Notice, supra note 5, at 37348 n.11.
12 Excluded Contracts means any contracts routed to an away market for execution. See Notice, supra note 5, at 37348 n.12.
13 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 of time in which the Exchange experiences an Exchange System Disruption solely in the option classes of the affected Matching Engine. See Notice, supra note 5, at 37348 n.13.

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Tier 1 up to 0.30% TCV: The monthly fee would increase from $2,000
to $2,500;
Tier 2 above 0.30%, up to 0.60%
TCV: The monthly fee would increase from $3,375 to $3,500; and Tier 3 above 0.60% TCV: The monthly fee would increase from $3,750
to $4,500.
III. Suspension of the Proposed Rule Change Pursuant to Section 19b3C of the Act,14 at any time within 60 days of the date of filing of an immediately effective proposed rule change pursuant to Section 19b1 of the Act,15 the Commission summarily may temporarily suspend the change in the rules of a self-regulatory organization SRO 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. As discussed below, the Commission believes a temporary suspension of the proposed rule change is necessary and appropriate to allow for additional analysis of the proposed rule changes consistency with the Act and the rules thereunder.
In support of the proposed fee increases, the Exchange argues principally that the fees for Full Service MEO Ports are constrained by competitive forces, and that this is supported by their revenue and cost analysis. In particular, the Exchange states that there are 16 options markets that are highly competitive and that reliance on competitive markets is an appropriate means to ensure equitable and reasonable prices.16 In further support of its argument that competitive forces constrain its proposed Full Service MEO Port fee increases, the Exchange states that there is no regulatory requirement that any market participant connect to the Exchange or that any market participant connect at any specific connection speed.17 The Exchange further states no options market participant is required by rule, regulation, or competitive forces to be a Member of the Exchange, which the Exchange believes is illustrated by the fact that it is unaware of any one options exchange whose membership 14 15

U.S.C. 78sb3C.
U.S.C. 78sb1.
16 See id. at 37350. The Exchange adds that the Exchange had combined market share of 5.31% in June 2021 and it is aware of no evidence that this provides the Exchange with anti-competitive pricing power.
17 See id. at 37354.
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includes every registered brokerdealer.18
The Exchange also states that the proposed fees are designed to recover a portion of the costs associated with directly accessing the Exchange and that the proposed increases are reasonable and appropriate to allow the Exchange to offset expenses the Exchange has and will incur in relation to providing the Full Service MEO Ports.19 The Exchange provides an analysis of its revenues, costs, and profitability associated with these fees, which it references as Proposed Access Fees. The Exchange states that this analysis reflects an extensive cost review in which the Exchange analyzed every expense item in the Exchanges 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.20 The Exchange states that this analysis shows fee increase will not result in excessive pricing or supracompetitive profits when compared to the Exchanges annual expense associated with providing the MEO
Ports versus the annual revenue for the MEO Ports.21
The Exchange states that for 2021, the total annual expense for providing the access services associated with the Proposed Access Fees for the Exchange is projected to be approximately $897,084.22 The $897,084 in projected total annual expense is comprised of the following, all of which the Exchange states are directly related to the access services associated with the Proposed Access Fees: 1 Third-party expense, relating to fees paid by the Exchange to third-parties for certain products and services; and 2 internal expense, relating to the internal costs of the Exchange to provide the services associated with the Proposed Access Fees. The Exchange states that the $897,084 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.
The Exchange states that the total third-party expense, relating to fees paid by the Exchange to third-parties for 18 See
Notice, supra note 5, at 3745455.
Notice, supra note 5, at 37349.
20 See Notice, supra note 5, at 37350. The Exchange also states that no expense amount is allocated twice and the expenses only cover the MIAX Pearl options market. Id. at 37354. Expenses associated with the MIAX Pearl equities market are accounted for separately and are not within the scope of this filing. See id. at 37384.
21 See Notice, supra note 5, at 37350.
22 See Notice, supra note 5, at 37351.
19 See
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