[Federal Register Volume 84, Number 201 (Thursday, October 17, 2019)]
[Notices]
[Pages 55675-55677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22598]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87280; File No. SR-MIAX-2019-41]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Exchange Rule 519, MIAX Order Monitor
October 10, 2019.
Pursuant to the provisions of 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 October 2, 2019, Miami International Securities
Exchange, LLC (``MIAX Options'' or the ``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') a proposed rule
change as described in Items I and II 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 519, MIAX
Order Monitor.
The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/ at MIAX Options'
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 519, MIAX Order
[[Page 55676]]
Monitor (``MOM'') to remove a term in the Exchange's rule which creates
an ambiguity concerning the application of the rule. Specifically,
subsection (4) of paragraph (a), Limit Orders to Sell, provides that
``[f]or options with a National Best Bid (``NBB'') equal to or greater
than $0.25 the System \3\ will reject an incoming limit order that has
a limit price equal to or less than the NBB by the lesser of (i) $2.50,
or (ii) 50% of the NBB price.'' The second provision of the rule
provides that, ``[f]or options with an NBB of $0.25 or less the System
will accept any incoming limit order.''
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\3\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
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The statements an NBB ``equal to or greater than $0.25'' and ``an
NBB of $0.25 or less'' both contemplate the NBB being equal to $0.25.
The operation of the rule requires a bifurcation at $0.25 and only one
action (accepting or rejecting an incoming order) can occur when the
NBB is equal to $0.25. The desired behavior by the Exchange, for limit
orders to sell, is to accept an order at any price when the NBB is
equal to $0.25 or less. Therefore the Exchange proposes to remove the
phrase ``equal to or'' from the first sentence in the rule.
The new proposed rule text will provide that, ``[f]or options with
a National Best Bid (``NBB'') greater than $0.25 the System will reject
an incoming limit order that has a limit price equal to or less than
the NBB by the lesser of (i) $2.50, or (ii) 50% of the NBB price. For
options with an NBB of $0.25 or less the System will accept any
incoming limit order.
The Exchange believes its proposed change provides additional
detail and clarity to the Exchange's rule and eliminates any
inadvertent ambiguity in the rule text concerning order protections for
incoming limit orders to sell.
2. Statutory Basis
MIAX believes that its proposed rule change is consistent with
Section 6(b) of the Act \4\ in general, and furthers the objectives of
Section 6(b)(5) of the Act \5\ 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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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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The Exchange believes its proposal promotes just and equitable
principles of trade, removes impediments to and perfects the mechanisms
of a free and open market and a national market system, and in general,
protects investors and the public interest by providing clarity and
precision in the Exchange's rule text. Additionally, the proposed
change is consistent with the current System behavior as described in
the Exchange's User Manual.\6\
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\6\ MIAX Options User's Manual, August 2019, p 38, https://www.miaxoptions.com/exchange-functionality-data.
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The Exchange believes that the proposed change to the rule text
provides further clarification to Members,\7\ investors, and the
public, regarding the Exchange's handling of limit orders to sell. The
Exchange believes it is in the interest of investors and the public to
accurately describe the behavior of the Exchange's System in its rules
as this information may be used by investors to make decisions
concerning the submission of their orders. Transparency and clarity are
consistent with the Act because it removes impediments to and helps
perfect the mechanism of a free and open market and a national market
system, and, in general, protects investors and the public interest by
accurately describing the behavior of the Exchange's System.
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\7\ 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.
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The Exchange believes that the proposed change promotes just and
equitable principles of trade and removes impediments to and perfects
the mechanism of a free and open market and a national market system
and, in general, protects investors and the public interest by
providing additional detail and clarity in the Exchange's rules.
Further, the Exchange's proposal provides transparency and clarity in
the rule and is consistent with the Act because it removes impediments
to and helps perfect the mechanism of a free and open market and a
national market system, and, in general, protects investors and the
public interest by accurately describing the behavior of the Exchange's
System. In particular, the Exchange believes that the proposed rule
change will provide greater clarity to Members and the public regarding
the Exchange's Rules, and it is in the public interest for rules to be
accurate and concise so as to eliminate the potential for confusion.
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 proposed rule change is
designed to remove an unintentional ambiguity introduced in a prior
rule change.\8\
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\8\ See Securities Exchange Release No. 86024 (June 4, 2019), 84
FR 26924 (June 10, 2019) (SR-MIAX-2019-26).
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The Exchange does not believe that the proposed rule change will
impose any burden on inter-market competition as the Rules apply
equally to all Exchange Members. The proposed rule change is not a
competitive filing and is intended to improve the clarity and precision
of the Exchange's rule text.
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 \9\ and Rule 19b-4(f)(6) \10\
thereunder.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay. The Exchange
believes that waiver is consistent with the protection of investors and
the public
[[Page 55677]]
interest because it would remove any ambiguity in the Exchange's rule
concerning its handling of limit orders to sell. The Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest because the
proposal does not raise any new or novel issues and makes a non-
substantive change to clarify the rule text. Accordingly, the
Commission designates the proposed rule change to be operative on upon
filing.\13\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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-2019-41 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-2019-41. This file
number should be included on the 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-2019-41 and should be submitted on
or before November 7, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-22598 Filed 10-16-19; 8:45 am]
BILLING CODE 8011-01-P