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Federal Register / Vol. 86, No. 189 / Monday, October 4, 2021 / Notices A. Self-Regulatory Organizations 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 a tiered-pricing structure for the 10 gigabit Gb ultralow latency ULL fiber connection available to Members 3 and nonMembers. The Exchange believes a tiered-pricing structure will encourage Members and non-Members to be more efficient and economical when determining how to connect to the Exchange. This should also enable the Exchange to better monitor and provide access to the Exchanges network to ensure sufficient capacity and headroom in the System.4
The Exchange initially filed this proposal on July 30, 2021, with the proposed fee changes effective beginning August 1, 2021.5 The First Proposed Rule Change was published for comment in the Federal Register on August 17, 2021.6 The Commission received one comment letter on the First Proposed Rule Change.7 The Exchange has withdrawn the First Proposed Rule Change and now submits this proposal, which is immediately effective. This proposal provides additional justification for the proposed fee changes and addresses certain points raised in the single comment letter that submitted on the First Proposed Rule Change.
10Gb ULL Tiered-Pricing Structure The Exchange proposes to amend Sections 5ab of the Fee Schedule to provide for a tiered-pricing structure for 10Gb ULL connections for Members and non-Members. Currently, the Exchange assesses Members and non-Members a flat monthly fee of $10,000 per 10Gb ULL connection for access to the Exchanges primary and secondary facilities.
The Exchange now proposes to move from a flat monthly fee per connection to a tiered-pricing structure under 3 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.
4 The term System means the automated trading system used by the Exchange for the trading of securities. See Exchange Rule 100.
5 See Securities Exchange Act Release No. 92645
August 11, 2021, 86 FR 46048 August 17, 2021
SREMERALD202123 the First Proposed Rule Change.
6 Id.
7 See Letter from Richard J. McDonald, Susquehanna International Group, LLC SIG, to Vanessa Countryman, Secretary, Commission, dated September 7, 2021 SIG Comment Letter.

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which the monthly fee would vary depending on the number of 10Gb ULL
connections each Member or nonMember elects to purchase per exchange. Specifically, the Exchange proposes to decrease the fee for the first and second 10Gb ULL connections for each Member and non-Member from the current flat monthly fee of $10,000 to $9,000 per connection. To encourage more efficient connectivity usage, the Exchange proposes to increase the per connection fee for Members and nonMembers that purchase more than two 10Gb ULL connections. In particular, i the third and fourth 10Gb ULL
connections for each Member or nonMember will increase from the current flat monthly fee of $10,000 to $11,000
per connection; and ii for the fifth 10Gb ULL connection, and each 10Gb ULL connection purchased by Members and non-Members thereafter, the fee will increase from the flat monthly fee of $10,000 to $13,000 per connection.
The proposed 10Gb ULL tiered-pricing structure and fees are collectively referred to herein as the Proposed Access Fees.
The Exchange will continue to assess monthly Member and non-Member network connectivity fees for connectivity to the primary and secondary facilities in any month the Member or non-Member is credentialed to use any of the MIAX Emerald APIs or market data feeds in the production environment. The Exchange proposes to pro-rate the fees when a Member or nonMember makes a change to the connectivity by adding or deleting connections with such pro-rated fees based on the number of trading days that the Member or non-Member has been credentialed to utilize any of the MIAX Emerald APIs or market data feeds in the production environment through such connection, divided by the total number of trading days in such month multiplied by the applicable monthly rate. The Exchange will continue to assess monthly Member and non-Member network connectivity fees for connectivity to the disaster recovery facility in each month during which the Member or non-Member has established connectivity with the disaster recovery facility.
2. Statutory Basis The Exchange believes that its proposal to amend its Fee Schedule is consistent with Section 6b of the Act 8
in general, and furthers the objectives of Section 6b4 of the Act 9 in particular, in that it provides for the equitable 8 15
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allocation of reasonable dues, fees and other charges among Exchange Members and issuers and other persons using any facility or system which the Exchange operates or controls. The Exchange also believes the proposal furthers the objectives of Section 6b5 of the Act 10
in that it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general protect investors and the public interest and is not designed to permit unfair discrimination between customers, issuers, brokers and dealers.
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 believes the proposal to move from a flat fee per month for the 10Gb ULL connection to a tiered-pricing structure is reasonable, equitably allocated and not unfairly discriminatory because the Exchange believes the proposed structure would encourage firms to be more economical and efficient in the number of connections they purchase. The Exchange believes this will enable the Exchange to better monitor and provide access to the Exchanges network to ensure sufficient capacity and headroom in the System.
The Exchange believes that the proposal to move to a tiered-pricing structure for its 10Gb ULL connections is reasonable, equitably allocated and not unfairly discriminatory because the majority of Members and non-Members that purchase 10Gb ULL connections will either save money or pay the same amount after the tiered-pricing structure is implemented. After the effective date of the First Proposed Rule Change on August 1, 2021, approximately 60% of the firms that purchased at least one 10Gb ULL connection experienced a decrease in their monthly connectivity fees while only approximately 40% of firms experienced an increase in their monthly connectivity fees as a result of the proposed tiered-pricing structure when compared to the flat monthly fee structure. To illustrate, firms that purchase only one 10Gb ULL
connection per month used to pay the 10 15

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