[Federal Register Volume 85, Number 121 (Tuesday, June 23, 2020)]
[Notices]
[Pages 37719-37721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13430]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89085; File No. SR-MIAX-2020-16]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Exchange Rule 518, Complex Orders
June 17, 2020.
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 June 12, 2020, Miami International Securities Exchange, LLC
(``MIAX'' or the ``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 Exchange Rule 518,
Complex Orders.
The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/ 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 Exchange Rule 518, Complex Orders,
to adopt a new order type, Complex Attributable Order.
Currently, the Exchange offers an Attributable Order \3\ in its
simple market.\4\ Current Exchange Rule 516(e) states that an
Attributable Order is a market \5\ or limit order \6\ which displays
the user firm ID for purposes of trading on the Exchange. Use of
Attributable Orders is voluntary. Attributable Orders entered into the
Exchange System \7\ will be available for execution but may not display
the user firm ID for all Exchange processes. The Exchange will issue a
Regulatory Circular specifying the Exchange processes and the class(es)
of securities for which the Attributable Order type shall be
available.\8\ Currently, an Attributable Order in the simple market
will display the Executing Broker MPID \9\ when it triggers either a
liquidity refresh pause,\10\ or a Route Timer.\11\ Attributable Orders
were made available on the Exchange on June 17, 2013, for the
aforementioned liquidity seeking events.\12\ The Attributable Order
type is available for all option classes and can be activated on an
order-by-order basis with the default set to off.\13\
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\3\ See Exchange Rule 516(e).
\4\ The Exchange has a Simple Order Book, which is the
Exchange's regular electronic book of orders and quotes. See
Exchange Rule 518(a)(15). The Exchange also has a Strategy Order
book, which is the Exchange's electronic book of complex orders and
complex quotes. See Exchange Rule 518(A)(17).
\5\ A market order is an order to buy or sell a stated number of
option contracts at the best price available at the time of
execution. See Exchange Rule 516(a).
\6\ A limit order is an order to buy or sell a stated number of
option contracts at a specified price or better. See Exchange Rule
516(b).
\7\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
\8\ See Exchange Rule 516(e).
\9\ An MPID is a Market Participant Identifier used by the
Exchange.
\10\ See Exchange Rule 515(c)(3).
\11\ See Exchange Rule 529(b)(2).
\12\ See MIAX Options Regulatory Circular 2013-33, Attributable
Order (June 13, 2013) available at https://www.miaxoptions.com/sites/default/files/circular-files/MIAX_RC_2013_33.pdf.
\13\ Id.
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[[Page 37720]]
The Exchange now proposes to adopt new subparagraph (8) to Exchange
Rule 518(b) which will similarly provide that a Complex Attributable
Order is a market or limit order which displays the user firm ID for
purposes of trading on the Exchange. Use of Complex Attributable Orders
is voluntary. Complex Attributable Orders entered into the Exchange
System will be available for execution but may not display the user
firm ID for all Exchange processes. Complex Attributable Orders will be
used similarly for liquidity seeking events that occur on the
Exchange's Strategy Book, such as Complex Auctions. If enabled, the
MPID will be displayed on the MIAX Order Feed (``MOR'') and the MIAX
Administrator Information Subscriber (``AIS'') Feed. The Exchange will
issue a Regulatory Circular specifying the Exchange processes and the
class(es) of securities for which the Complex Attributable Order type
shall be available.\14\
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\14\ The ability to display information pertaining to a single
order depends upon the Exchange's ability to broadcast that
information to its members. This is currently accomplished through
the Exchange's market data products, which for example includes the
Administrative Information Subscriber Feed (``AIS''). Thus, the
functionality of a Complex Attributable Order is linked to what is
technologically feasible through the Exchange's market data
products. The definition of a Complex Attributable Order will
acknowledge this relationship and allow the functionality of the
Complex Attributable Order type to develop and be deployed
correspondingly with technical advances related to its market data
products. In its definition of a Complex Attributable Order the
Exchange proposes to state that, ``Complex Attributable Orders
entered into the Exchange System will be available for execution but
may not display the user firm ID for all Exchange processes.'' This
will serve to put MIAX members on notice that the functionality of a
Complex Attributable Order to display the user firm ID, as it
continually develops, may not be available during all Exchange
processes.
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The Exchange will announce the implementation date of the proposed
rule change by Regulatory Circular to be published no later than 90
days following the operative date of the proposed rule. The
implementation date will be no later than 90 days following the
issuance of the Regulatory Circular.
2. Statutory Basis
MIAX believes that its proposed rule change is consistent with
Section 6(b) of the Act \15\ in general, and furthers the objectives of
Section 6(b)(5) of the Act \16\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in, securities, to remove impediments to and perfect the mechanisms of
a free and open market and a national market system and, in general, to
protect investors and the public interest.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
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The Exchange believes its proposal to adopt a Complex Attributable
Order promotes just and equitable principles of trade, and removes
impediments to and perfects the mechanisms of a free and open market
system and, in general, protects investors and the public interest by
introducing an order type for use on the complex market that is
currently available for use on the Exchange's simple market. Use of
Complex Attributable Orders is voluntary and provides Members \17\ of
the Exchange similar order types for use on both the simple market and
the complex market for use during liquidity seeking events to
facilitate executions.
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\17\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associate with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
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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 that is not necessary or appropriate
in furtherance of the purposes of the Act.
The Exchange does not believe that the proposed rule change to
adopt a Complex Attributable Order will impose any burden on inter-
market competition but rather may increase competition among
exchanges.\18\ The Exchange notes that it operates in a highly
competitive market in which market participants can readily direct
order flow to competing venues who offer similar functionality. The
Exchange believes the proposed rule change will enhance competition
among the various markets for complex order execution, potentially
resulting in more active complex order trading on all exchanges.
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\18\ The Nasdaq ISE Exchange and Nasdaq MRX Exchange currently
offer Attributable Complex Orders. See Nasdaq ISE Exchange, Options
3, Section 14, Complex Orders (b)(4); and Nasdaq MRX Exchange,
Options 3, Section 14, Complex Orders (b)(4).
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The Exchange does not believe that the proposed rule change to
adopt a Complex Attributable Order will impose any burden on intra-
market competition as use of a Complex Attributable Order is voluntary
and all Members of the Exchange have the option to use a Complex
Attributable Order when submitting a complex order to the Exchange.
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \19\ and Rule 19b-4(f)(6) \20\
thereunder.
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\19\ 15 U.S.C. 78s(b)(3)(A).
\20\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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.
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 protected]. Please include
File Number SR-MIAX-2020-16 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-MIAX-2020-16. This file
number should be included on the
[[Page 37721]]
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-
MIAX-2020-16 and should be submitted on or before July 14, 2020.
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\21\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-13430 Filed 6-22-20; 8:45 am]
BILLING CODE 8011-01-P