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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices
Customer 8 order flow to the Exchange.
The Monthly Volume Credit is provided to Members whose executed Priority Customer volume along with that of its Affiliates,9 not including Excluded Contracts,10 is at least 0.30% of Exchange-listed Total Consolidated Volume TCV 11 and is $250 for Members that connect via the FIX
Interface and $1,000 for Members that connect via the MEO Interface or both interfaces.12 The Monthly Volume Credit is a single once-per-month credit towards the aggregate monthly total of non-transaction fees assessable to a Member.
Remove Trading Permit Fee Credit The Exchange also proposes to amend Section 3b of the Fee Schedule to remove a Trading Permit fee credit of $100 that is provided to Members who connect via both the MEO and FIX
Interfaces and is a monthly credit towards the Trading Permit fees applicable to the MEO Interface use.13

lotter on DSK11XQN23PROD with NOTICES1

Increase Monthly Trading Permit Fees The Exchange also proposes to amend Section 3b of the Fee Schedule to increase the amount of the monthly Trading Permit fees that are charged to Exchange Members that are Electronic Exchange Members or Market Makers.14
These fees are assessed in a tier-based fee structure based on the monthly total volume executed by a Member and its Affiliates on the Exchange across all origin types, not including Excluded Contracts, as compared to all Exchangelisted options and are also assessed 8 Priority Customer means a person or entity that i is not a broker or dealer in securities, and ii does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial accountss. The number of orders shall be counted in accordance with Interpretation and Policy .01 of Exchange Rule 100.
See Notice, supra note 5, at 37380 n.6.
9 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 37380 n.9.
10 Excluded Contracts means any contracts routed to an away market for execution. See Notice, supra note 5, at 37380 n.10.
11 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 37380 n.11.
12 The FIX Interface and MEO Interface are different interfaces for certain order types as set forth in Exchange Rule 516. See Notice, supra note 5, at 37380 n.78.
13 See Notice, supra note 5, at 37380.
14 See Notice, supra note 5, at 3738081.

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based upon the type of interface used by the Member to connect to the Exchange, specifically the FIX Interface and/or the MEO Interface.15
The Exchange proposes to increase fees for Trading Permits as follows:
For Members that connect via the FIX
Interface, if the Members relevant monthly volume falls within the parameters of:
Tier 1 up to 0.30% TCV: The monthly fee would increase from $250
to $500;
Tier 2 above 0.30%, up to 0.60%
TCV: The monthly fee would increase from $350 to $1,000; and Tier 3 above 0.60% TCV: The monthly fee would increase from $450
to $1,500.
For Members that connect via the MEO interface, if the Members relevant monthly volume falls within the parameters of:
Tier 1 up to 0.30% TCV: The monthly fee would increase from $300
to $2,500;
Tier 2 above 0.30%, up to 0.60%
TCV: The monthly fee would increase from $400 to $4,000; and Tier 3 above 0.60% TCV: The monthly fee would increase from $500
to $6,000.
III. Suspension of the Proposed Rule Change Pursuant to Section 19b3C of the Act,16 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,17 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 changes, the Exchange principally argues that these fees are constrained by competitive forces, and that this is supported by their revenue and cost analysis. In particular, the Exchange states that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a 15 See
Notice, supra note 5, at 37380.
U.S.C. 78sb3C.
17 15 U.S.C. 78sb1.
16 15

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particular venue to be excessive.18 In further support of its argument that competitive forces constrain its proposed fee changes, Exchange further states that if it were to attempt to establish unreasonable pricing, then no market participant would join or connect, and existing market participants would disconnect.19 In addition, the Exchange states that it 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 nontransaction fees that, in the determination of such market participant, did not make business or economic sense for such market participant to access such exchange, and claims that 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 includes every registered brokerdealer.20
The Exchange also states that these fees are designed to recover a portion of the costs associated with directly accessing the Exchange. The Exchange believes that Trading Permits are a means to directly access the Exchange and thus offers meaningful value and without a Trading Permit a Member cannot directly trade on the Exchange.
The Exchange provides an analysis of its revenues, costs, and profitability associated with these fees, which it references as Proposed Access Fees. 21
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.22 The Exchange states that this analysis shows that the Proposed Access Fees will not result in excessive pricing or supracompetitive profit when compared to the Exchanges annual expense associated with providing the services 18 See Notice, supra note 5, at 37387; see also id.
at 37382.
19 See Notice, supra note 5, at 37382.
20 See Notice, supra note 5, at 37387.
21 See Notice, supra note 5, at 3738186.
22 See Notice, supra note 5, at 37382. In addition, the Exchange notes that the expenses discussed within their filing 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.
See id. at 37384.

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