Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period Applicable to Rule 530 Relating To Limit Up/Limit Down, 10196-10198 [2015-03815]
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10196
Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices
the proposed rule changes are consistent
with Section 6 of the Act ‘‘by avoiding
the regulatory compliance issue of
improperly listing the ETFs without
CSSAs, or without Commission
approval, while providing a clear
mechanism to acquire surveillance and
trading information when necessary
from a foreign regulator via the
Commission.’’ 23
asabaliauskas on DSK5VPTVN1PROD with NOTICES
III. Discussion
Under section 19(b)(2)(C) of the Act,
the Commission shall approve a
proposed rule change of a selfregulatory organization (‘‘SRO’’) if it
finds that such proposed rule change is
consistent with the requirements of the
Act, and the rules and regulations
thereunder that are applicable to such
organization.24 The Commission shall
disapprove a proposed rule change if it
does not make such a finding.25
After careful consideration, the
Commission does not find that the
proposed rule changes are consistent
National Commission for Banking and Securities
dated as of October 18, 1990, see Securities
Exchange Act Release Nos. 53824 (May 17, 2006),
71 FR 30003 (May 24, 2006) (SR–Amex–2006–43),
56324 (August 27, 2007), 72 FR 50426 (August 31,
2007) (SR–ISE–2007–72), 56778 (November 9,
2007), 72 FR 65113 (November 19, 2007) (SR–
Amex–2007–100), 57013 (December 20, 2007), 72
FR 73923 (December 28, 2007) (SR–CBOE–2007–
140), and 57014 (December 20, 2007), 72 FR 73934
(December 28, 2007) (SR–ISE–2007–111). See MIAX
Letter, supra note 6, at 3 nn.7–9 and accompanying
text. The Commission notes that these agreements
are not at issue in the present proposed rule
changes. MIAX also noted that it had previously
filed another proposed rule change that was
immediately effective using a similar approach to
list options on shares of the iShares MSCI Mexico
Index Fund. See Securities Exchange Act Release
No. 72213 (May 21, 2014), 79 FR 30669 (May 28,
2014) (SR–MIAX–2014–19). In that instance, the
Exchange relied on an agreement between The
National Commission for Banking and Securities
and the Commission dated as of October 18, 1990.
The Commission notes that the Commission had
previously determined that this agreement could be
used for surveillance purposes. See Securities
Exchange Act Release No. 36415 (October 25, 1995),
60 FR 55620 (November 1, 1995) (SR–CBOE–95–
45).
23 See MIAX Letter, supra note 6 at 4.
24 See 15 U.S.C. 78s(b)(2)(C)(i).
25 See 15 U.S.C. 78s(b)(2)(C)(ii); see also 17 CFR
201.700(b)(3) (‘‘The burden to demonstrate that a
proposed rule change is consistent with the
Exchange Act and the rules and regulations issued
thereunder . . . is on the self-regulatory
organization that proposed the rule change. . . . A
mere assertion that the proposed rule change is
consistent with those requirements . . . is not
sufficient.’’). The description of a proposed rule
change, its purpose and operation, its effect, and a
legal analysis of its consistency with applicable
requirements must all be sufficiently detailed and
specific to support an affirmative Commission
finding. See 17 CFR 201.700(b)(3). Any failure of a
SRO to provide the information elicited by Form
19b–4 may result in the Commission not having a
sufficient basis to make an affirmative finding that
a proposed rule change is consistent with the
Exchange Act and the rules and regulations issued
thereunder that are applicable to the SRO. Id.
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with the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.26 In particular, the
Commission does not find that the
proposed rule changes are consistent
with Section 6(b)(5) of the Act, which
requires that the rules of a national
securities exchange be designed, among
other things, ‘‘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 mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.’’ 27
As noted by MIAX, the Commission
has permitted an SRO to rely on an
agreement between the Commission and
the applicable foreign regulator in the
absence of a CSSA only if the SRO
receives an assurance from the
Commission that such an agreement can
be relied on for surveillance purposes
and provides, at a minimum, for the
exchange of transaction, clearing and
customer information necessary to
conduct an investigation.28 This
assurance is necessary, because the
Commission may enter into a variety of
agreements with foreign regulators some
of which may be unrelated to the
sharing of surveillance information.
After carefully and thoroughly
reviewing the agreements cited by the
Exchange in its proposals, the
Commission is unable to provide the
necessary assurance that such
agreements can be relied on for
surveillance purposes.29 Accordingly,
the Commission cannot approve MIAX’s
request to allow the listing and trading
of options on iShares ETFs and Market
Vectors ETFs, upon reliance on
agreements entered into between the
Commission and the applicable foreign
regulators in place of a CSSA, in
satisfaction of the Exchange’s Listing
Standards.30 According to MIAX, such
approval would be necessary to make
26 In disapproving the proposed rule changes, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
27 15 U.S.C. 78f(b)(5).
28 See Securities Exchange Act Release No. 40761
(December 8, 1998), 63 FR 70952, 70959 n.101
(December 22, 1998).
29 The Commission also notes that the particular
agreements referenced in MIAX’s letter, which the
Commission has previously allowed exchanges to
rely on in lieu of a CSSA between an exchange and
the applicable foreign market, are not at issue in the
present proposed rule changes. See supra note 22.
30 See iShares ETFs Proposal, supra note 3, and
Market Vectors ETFs Proposal, supra note 8.
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the ETFs compliant with all of the
applicable Listing Standards.31
The Commission notes that Rule
700(b)(3) of its Rules of Practice
reiterates that ‘‘[t]he burden to
demonstrate that a proposed rule change
is consistent with the Exchange Act . . .
is on the self-regulatory organization
that proposed the rule change.’’ 32 For
the reasons articulated above, the
Commission does not believe that MIAX
has met that burden in this case.
IV. Conclusion
For the foregoing reasons, the
Commission does not find that the
proposed rule changes are consistent
with the Act and the rules and
regulations thereunder applicable to a
national securities exchange, and, in
particular, with Section 6(b)(5) of the
Act.
It is therefore ordered, pursuant to
section 19(b)(2) of the Act, that the
proposed rule changes (SR–MIAX–
2014–30 and SR–MIAX–2014–39) be,
and hereby are, disapproved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.33
Brent J. Fields,
Secretary.
[FR Doc. 2015–03813 Filed 2–24–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74307; File No. SR–MIAX–
2015–11]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Extend the Pilot Period
Applicable to Rule 530 Relating To
Limit Up/Limit Down
February 19, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
18, 2015, Miami International Securities
Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
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
31 Id.
32 17
CFR 201.700(b)(3).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
33 17
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Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange is filing a proposal to
amend Exchange Rule 530 to extend the
pilot period for the treatment of
erroneous transactions during a Limit or
Straddle State.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.miaxoptions.com/filter/
wotitle/rule_filing, 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.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
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
Rule 530 (Limit Up-Limit Down) in
order to extend the pilot period for the
treatment of erroneous transactions that
occur in a Limit or Straddle State until
October 23, 2015.
Exchange Rule 530(j) provides for the
treatment of erroneous transactions
occurring during Limit and Straddle
States. Specifically, once an NMS Stock
has entered a Limit or Straddle State,
the Exchange will nullify a transaction
in an option overlying such an NMS
Stock as provided in the Rule 530(j).
This provision was adopted for a one
year pilot period beginning on the date
of the implementation of the Plan to
Address Extraordinary Market Volatility
Pursuant to Rule 608 of Regulation
NMS, April 8, 2013.3 The Exchange
previously extended the pilot period for
3 See Exchange Rule 503(j). See also Securities
Exchange Act Release Nos. 69210 (March 22, 2013),
78 FR 18637 (March 27, 2013) (SR–MIAX–2013–
12); 69342 (April 8, 2013), 78 FR 22017 (April 12,
2013) (SR–MIAX–2013–12); 69234 (March 25,
2013), 78 FR 19344 (March 29, 2013) (SR–MIAX–
2013–15); 69354 (April 9, 2013), 78 FR 22357 (April
15, 2013) (SR–MIAX–2013–15).
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18:05 Feb 24, 2015
Jkt 235001
Rule 530(j) until February 20, 2015.4
The Exchange now proposes to extend
the pilot period for Rule 530(j) until
October 23, 2015 in order to allow the
Exchange and the Commission
additional time to collect and analyze
data regarding the impact of Rule 530(j)
on liquidity and market quality in the
options markets.
To assist the Commission in its
analysis, the Exchange will provide the
Commission and the public with data
and analysis during the duration of the
pilot in order to evaluate the impact of
Limit and Straddle States on liquidity
and market quality in the options
markets. Specifically, by May 29, 2015,
the Exchange represents that it shall
provide the Commission and the public
assessments relating to the impact of the
obvious error Rules during Limit and
Straddle States that (i) evaluate the
statistical and economic impact of Limit
and Straddle States on liquidity and
market quality in the options markets;
and (ii) assess whether the lack of
obvious error rules in effect during the
Straddle and Limit States are
problematic. Additionally, each month
during the pilot period the Exchange
shall provide to the Commission and the
public a dataset containing the data for
each Straddle and Limit State in
optionable stocks. For each stock that
reaches a Straddle or Limit State, the
number of options included in the
dataset can be reduced by selecting
options in which at least one (1) trade
occurred on the Exchange during the
Straddle or Limit State. For each of
those options affected, each data record
should contain the following
information: (i) Stock symbol, option
symbol, time at the start of the straddle
or limit state, an indicator for whether
it is a straddle or limit state; and (ii) for
activity on the exchange—(A) executed
volume, time-weighted quoted bid-ask
spread, time-weighted average quoted
depth at the bid, time-weighted average
quoted depth at the offer, (B) high
execution price, low execution price, (C)
number of trades for which a request for
review for error was received during
Straddle and Limit States, (D) an
indicator variable for whether those
options outlined above have a price
change exceeding 30% during the
underlying stock’s Limit or Straddle
state compared to the last available
option price as reported by OPRA before
the start of the Limit or Straddle state (1
if observe 30% and 0 otherwise) and
another indicator variable for whether
the option price within five minutes of
4 See Securities Exchange Act Release No. 71881
(April 4, 2014), 79 FR 19956 (April 10, 2014) (SR–
MIAX–2014–14).
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10197
the underlying stock leaving the Limit
or Straddle state (or halt if applicable)
is 30% away from the price before the
start of the Limit or Straddle state.
2. Statutory Basis
MIAX believes that its proposed rule
change is consistent with Section 6(b) of
the Act 5 in general, and furthers the
objectives of Section 6(b)(5) of the Act 6
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 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. Specifically, the
proposal supports the objectives of
perfecting the mechanism of a free and
open market and the national market
system because it promotes uniformity
across markets concerning when and
how to halt trading in all stock options
as a result of extraordinary market
volatility. In addition, the Exchange
believes that the extension of the pilot
will help ensure that market
participants continue to benefit from the
protections of the Limit Up-Limit Down
Rules which will protect investors and
the public interest while allowing the
Exchange and the Commission
additional time to collect and analyze
data regarding the impact of Rules on
liquidity and market quality in the
options markets.
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 changes are being made to
extend the pilot program that provides
for how the Exchange shall treat orders
and quotes in options overlying NMS
stocks when the Limit Up-Limit Down
Plan is in effect and will not impose any
burden on competition while providing
certainty of treatment and execution of
options orders during periods of
extraordinary volatility in the
underlying NMS stock, and facilitating
appropriate liquidity during a Limit
State or Straddle State.
5 15
6 15
E:\FR\FM\25FEN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices
IV. Solicitation of Comments
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 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 from the date on
which it was filed, or such shorter time
as the Commission may designate if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 7 and Rule 19b–4(f)(6)(iii)
thereunder.8
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest, as it
will allow the obvious error pilot
program to continue uninterrupted
while the industry gains further
experience operating under the Plan to
Address Extraordinary Market
Volatility, and avoid any investor
confusion that could result from a
temporary interruption in the pilot
program. For this reason, the
Commission designates the proposed
rule change to be operative upon filing.9
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.
7 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). As required under
Rule 19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of 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.
9 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
asabaliauskas on DSK5VPTVN1PROD with NOTICES
8 17
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18:05 Feb 24, 2015
Jkt 235001
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:
[FR Doc. 2015–03815 Filed 2–24–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
MIAX–2015–11 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–MIAX–2015–11. 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 Web site (https://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 Web site 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 such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–MIAX–
2015–11, and should be submitted on or
before March 18, 2015.
PO 00000
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Brent J. Fields,
Secretary.
[Release No. 34–74309; File No. SR–
NYSEMKT–2015–10]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Extending the Pilot
Period Applicable to Rule 953.1NY(c),
Obvious and Catastrophic Errors, Until
October 23, 2015
February 19, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
18, 2015, NYSE MKT LLC (the
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to extend the
pilot period applicable to Rule
953.1NY(c), which addresses how the
Exchange treats Obvious and
Catastrophic Errors during periods of
extreme market volatility, until October
23, 2015. The pilot period is currently
set to expire on February 20, 2015. The
text of the proposed rule change is
available on the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, 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
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 80, Number 37 (Wednesday, February 25, 2015)]
[Notices]
[Pages 10196-10198]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-03815]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74307; File No. SR-MIAX-2015-11]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Extend the Pilot Period Applicable to Rule 530
Relating To Limit Up/Limit Down
February 19, 2015.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 18, 2015, Miami International Securities Exchange LLC
(``MIAX'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the 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
[[Page 10197]]
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange is filing a proposal to amend Exchange Rule 530 to
extend the pilot period for the treatment of erroneous transactions
during a Limit or Straddle State.
The text of the proposed rule change is available on the Exchange's
Web site at https://www.miaxoptions.com/filter/wotitle/rule_filing, 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 Rule 530 (Limit Up-Limit Down) in
order to extend the pilot period for the treatment of erroneous
transactions that occur in a Limit or Straddle State until October 23,
2015.
Exchange Rule 530(j) provides for the treatment of erroneous
transactions occurring during Limit and Straddle States. Specifically,
once an NMS Stock has entered a Limit or Straddle State, the Exchange
will nullify a transaction in an option overlying such an NMS Stock as
provided in the Rule 530(j). This provision was adopted for a one year
pilot period beginning on the date of the implementation of the Plan to
Address Extraordinary Market Volatility Pursuant to Rule 608 of
Regulation NMS, April 8, 2013.\3\ The Exchange previously extended the
pilot period for Rule 530(j) until February 20, 2015.\4\ The Exchange
now proposes to extend the pilot period for Rule 530(j) until October
23, 2015 in order to allow the Exchange and the Commission additional
time to collect and analyze data regarding the impact of Rule 530(j) on
liquidity and market quality in the options markets.
---------------------------------------------------------------------------
\3\ See Exchange Rule 503(j). See also Securities Exchange Act
Release Nos. 69210 (March 22, 2013), 78 FR 18637 (March 27, 2013)
(SR-MIAX-2013-12); 69342 (April 8, 2013), 78 FR 22017 (April 12,
2013) (SR-MIAX-2013-12); 69234 (March 25, 2013), 78 FR 19344 (March
29, 2013) (SR-MIAX-2013-15); 69354 (April 9, 2013), 78 FR 22357
(April 15, 2013) (SR-MIAX-2013-15).
\4\ See Securities Exchange Act Release No. 71881 (April 4,
2014), 79 FR 19956 (April 10, 2014) (SR-MIAX-2014-14).
---------------------------------------------------------------------------
To assist the Commission in its analysis, the Exchange will provide
the Commission and the public with data and analysis during the
duration of the pilot in order to evaluate the impact of Limit and
Straddle States on liquidity and market quality in the options markets.
Specifically, by May 29, 2015, the Exchange represents that it shall
provide the Commission and the public assessments relating to the
impact of the obvious error Rules during Limit and Straddle States that
(i) evaluate the statistical and economic impact of Limit and Straddle
States on liquidity and market quality in the options markets; and (ii)
assess whether the lack of obvious error rules in effect during the
Straddle and Limit States are problematic. Additionally, each month
during the pilot period the Exchange shall provide to the Commission
and the public a dataset containing the data for each Straddle and
Limit State in optionable stocks. For each stock that reaches a
Straddle or Limit State, the number of options included in the dataset
can be reduced by selecting options in which at least one (1) trade
occurred on the Exchange during the Straddle or Limit State. For each
of those options affected, each data record should contain the
following information: (i) Stock symbol, option symbol, time at the
start of the straddle or limit state, an indicator for whether it is a
straddle or limit state; and (ii) for activity on the exchange--(A)
executed volume, time-weighted quoted bid-ask spread, time-weighted
average quoted depth at the bid, time-weighted average quoted depth at
the offer, (B) high execution price, low execution price, (C) number of
trades for which a request for review for error was received during
Straddle and Limit States, (D) an indicator variable for whether those
options outlined above have a price change exceeding 30% during the
underlying stock's Limit or Straddle state compared to the last
available option price as reported by OPRA before the start of the
Limit or Straddle state (1 if observe 30% and 0 otherwise) and another
indicator variable for whether the option price within five minutes of
the underlying stock leaving the Limit or Straddle state (or halt if
applicable) is 30% away from the price before the start of the Limit or
Straddle state.
2. Statutory Basis
MIAX believes that its proposed rule change is consistent with
Section 6(b) of the Act \5\ in general, and furthers the objectives of
Section 6(b)(5) of the Act \6\ 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 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. Specifically, the proposal
supports the objectives of perfecting the mechanism of a free and open
market and the national market system because it promotes uniformity
across markets concerning when and how to halt trading in all stock
options as a result of extraordinary market volatility. In addition,
the Exchange believes that the extension of the pilot will help ensure
that market participants continue to benefit from the protections of
the Limit Up-Limit Down Rules which will protect investors and the
public interest while allowing the Exchange and the Commission
additional time to collect and analyze data regarding the impact of
Rules on liquidity and market quality in the options markets.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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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 proposed changes are
being made to extend the pilot program that provides for how the
Exchange shall treat orders and quotes in options overlying NMS stocks
when the Limit Up-Limit Down Plan is in effect and will not impose any
burden on competition while providing certainty of treatment and
execution of options orders during periods of extraordinary volatility
in the underlying NMS stock, and facilitating appropriate liquidity
during a Limit State or Straddle State.
[[Page 10198]]
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 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 from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(f)(6)(iii) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of 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.
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The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Commission believes that waiving the 30-day operative delay
is consistent with the protection of investors and the public interest,
as it will allow the obvious error pilot program to continue
uninterrupted while the industry gains further experience operating
under the Plan to Address Extraordinary Market Volatility, and avoid
any investor confusion that could result from a temporary interruption
in the pilot program. For this reason, the Commission designates the
proposed rule change to be operative upon filing.\9\
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\9\ For purposes only of waiving the 30-day operative delay, the
Commission has also 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-MIAX-2015-11 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-MIAX-2015-11. 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 Web site (https://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 Web site 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 such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-MIAX-2015-11, and should be
submitted on or before March 18, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-03815 Filed 2-24-15; 8:45 am]
BILLING CODE 8011-01-P
