Voglio sapere a riguardo di…

khammond on DSKJM1Z7X2PROD with NOTICES

7586

Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices
for the Exchange that also increases year-over-year, and thus the Exchange believes that it is reasonable to offset those costs through the Proposed Access Fees. The Exchange invests in and offers a superior network infrastructure as part of its overall options exchange services offering, resulting in significant costs associated with maintaining this network infrastructure, which are directly tied to the amount of the Proposed Access Fees that must be charged to access it, in order to recover those costs.
For the avoidance of doubt, none of the expenses included herein relating to the services associated with the Proposed Access Fees also relate to the provision of any other services offered by the Exchange. Stated differently, no expense amount of the Exchange is allocated twice. The Exchange notes that it made certain representations in a previous filing 12 regarding its expense allocation for the provision of additional limited service ports. The Exchange represents that none of the expenses allocated to the provision of additional limited service ports are also allocated to the services associated with the Proposed Access Feesthat is, there is no overlap of any such expenses that are included in the costs associated with services the Exchange provides for the Proposed Access Fees and for the services the Exchange provides for ports. Lastly, the Exchange notes that, with respect to the MIAX PEARL
expenses included herein, those expenses only cover the MIAX PEARL
options market; expenses associated with the MIAX PEARL equities market are accounted for separately and are not included within the scope of this filing.
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 supracompetitive profit, when comparing the total annual expense of MIAX PEARL
and MIAX associated with providing these services versus the total projected annual revenue for both exchanges from these services. For 2020, the total annual expense for providing network connectivity services that is, the shared network connectivity of MIAX PEARL
and MIAX, but excluding MIAX
12 See Securities Exchange Act Release No. 90812
December 29, 2020 SRPEARL202035.

VerDate Sep<11>2014

17:43 Jan 28, 2021

Jkt 253001

Emerald is projected to be approximately $17.9 million. The $17.9
million in projected total annual expense is comprised of the following, all of which are directly related to the services associated with the Proposed Access Fees for MIAX PEARL and MIAX: 1 Third-party expense, relating to fees paid by MIAX PEARL and MIAX
to third-parties for certain products and services; and 2 internal expense, relating to the internal costs of MIAX
PEARL and MIAX 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 actual for the first 11
months and projected for the final 1
month revenue and costs, which utilize the same presentation methodology as set forth in the Exchanges previouslyissued Audited Unconsolidated Financial Statements.13 The $17.9
million in projected total annual expense is directly related to the services associated with providing network connectivity services, 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. As discussed, the Exchange conducted an extensive cost review in which the Exchange analyzed every expense item in the Exchanges general expense ledger this includes over 150
separate and distinct expense items to determine whether each such expense relates to the 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 to the Exchange to provide the services associated with the Proposed Access Fees.
For 2020, total third-party expense, relating to fees paid by MIAX PEARL
and MIAX to third-parties for certain products and services for the Exchange 13 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 Exchanges 2019 Form 1 Amendment containing its financial statements for 2018. See Securities Exchange Act Release No. 87876 December 31, 2019, 85 FR 757 January 7, 2020 SRPEARL
201936. Accordingly, the third-party expense described in this filing is attributed to the same line item for the Exchanges 2020 Form 1 Amendment, which will be filed in 2021.

PO 00000

Frm 00061

Fmt 4703

Sfmt 4703

to be able to provide network connectivity services, is projected to be $4,079,910. 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 PEARL
and MIAX trading system infrastructure;
2 Zayo Group Holdings, Inc. Zayo for connectivity services fiber and bandwidth connectivity linking MIAX
PEARL and MIAX office locations in Princeton, NJ and Miami, FL to all data center locations; 3 Secure Financial Transaction Infrastructure SFTI,14
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 5 various other hardware and software providers including Dell and Cisco, which support the production environment in which Members and non-Members connect to the network to trade, receive market data, etc..
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 PEARL and MIAX
do not allocate their entire information technology and communication costs to the 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 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 Exchanges 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 Exchanges network infrastructure maintains stability.
14 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 19b1 of the Act and Rule 19b4 thereunder. See 15 U.S.C. 78sb1 and 17
CFR 240.19b4, respectively.

E:FRFM29JAN1.SGM

29JAN1