Self-Regulatory Organizations; Miami International Securities Exchange LLC; Order Granting Approval of Proposed Rule Change to Amend the Exchange's Amended and Restated By-Laws Relating to the Removal of a Board Restriction, 33283-33284 [2016-12396]
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Federal Register / Vol. 81, No. 101 / Wednesday, May 25, 2016 / Notices
would rather harmonize the treatment of
Market Orders between the Exchange
and NYSE Arca Equities and remove
complex functionality and obsolete
cross-references, thereby reducing
confusion and making the Exchange’s
rules easier to understand and navigate.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 28 and Rule 19b–
4(f)(6) thereunder.29 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
prior to 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 and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 30 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),31 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange believes that
waiving the operative delay would
promote the protection of investors and
the public interest because the proposed
rule change would reduce the potential
for a Market Order to trade at prices
away from the prevailing quote and at
potentially worse prices for the investor.
Likewise, the Exchange believes that
28 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and 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. The Exchange
has satisfied this requirement.
30 17 CFR 240.19b–4(f)(6).
31 17 CFR 240.19b–4(f)(6)(iii).
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eliminating IOC and tick-sensitive
instructions for Market Orders, without
delay, would be consistent with the
protection of investors and the public
interest because these instructions are
rarely used and their elimination would
simplify the Exchange’s offering of order
types. The Commission believes that the
proposed rule change is consistent with
the protection of investors and the
public interest, because the proposal
would diminish the likelihood of
Market Orders trading at prices that
would be disadvantageous to investors,
and because it would simplify the
Exchange’s order types by eliminating
rarely used complex order functionality.
Accordingly, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.32
At any time within 60 days of the
filing of such 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
under Section 19(b)(2)(B) 33 of the Act to
determine whether the proposed rule
change 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–
NYSE–2016–35 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–NYSE–2016–35. This file
number should be included on the
subject line if email is used. To help the
32 For purposes only of accelerating the operative
date of this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
33 15 U.S.C. 78s(b)(2)(B).
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33283
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 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;
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–NYSE–
2016–35 and should be submitted on or
before June 15, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–12241 Filed 5–24–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77876; File No. SR–MIAX–
2016–08]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Order Granting Approval of Proposed
Rule Change to Amend the Exchange’s
Amended and Restated By-Laws
Relating to the Removal of a Board
Restriction
May 20, 2016.
I. Introduction
On March 29, 2016, Miami
International Securities Exchange LLC
(the ‘‘Exchange’’ or ‘‘MIAX’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
34 17
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CFR 200.30–3(a)(12).
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33284
Federal Register / Vol. 81, No. 101 / Wednesday, May 25, 2016 / Notices
(‘‘Act’’) 1 and Rule 19b-4 thereunder,2 a
proposed rule change to amend the
Exchange’s Amended and Restated ByLaws (‘‘By-Laws’’) in order to remove a
restriction prohibiting a Director,
Observer or committee member of the
Exchange’s Board of Directors (‘‘Board’’)
from simultaneously serving as a
member of the governing body of a
competitor. The proposed rule change
was published for comment in the
Federal Register on April 8, 2016.3 The
Commission received no comments on
the proposed rule change. This order
approves the proposed rule change.
II. Description of the Proposed Rule
Change
Currently, the By-Laws restrict an
individual who is a Director,4
Observer,5 or committee member of the
Exchange from also serving as a member
of the board of directors or similar
governing body of a ‘‘Specified Entity.’’
The term ‘‘Specified Entity’’ generally
refers to any U.S. securities option
exchange (or facility thereof) or U.S.
alternative trading system on which
securities options are traded which
competes with the Exchange.6 The ByLaws specify that upon any individual
who is a Director, Observer, or
committee member of the Exchange
becoming a member of the board of
directors or similar governing body of a
Specified Entity, such individual
immediately would cease being a
Director, Observer or committee
member, as applicable, of the Board
(‘‘Board Restriction’’).7
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 77507
(April 4, 2016), 81 FR 20716 (April 8, 2016)
(‘‘Notice’’).
4 The term ‘‘Director’’ means the persons elected
or appointed to the Board from time to time in
accordance with the LLC Agreement of the
Exchange and the By-Laws in their capacity as
managers of the Exchange. See By-Laws, Article I
(j).
5 The term ‘‘Observer’’ means a person invited to
attend meetings of the Board in a nonvoting
observer capacity as further described in Article II,
Section 2.2(g)(i)–(iii) of the By-Laws. See By-Laws,
Article II, Section 2.2(g).
6 Specifically, the term ‘‘Specified Entity’’ is
defined in the By-Laws to mean (i) any U.S.
securities option exchange (or facility thereof) or
U.S. alternative trading system on which securities
options are traded (other than the Exchange or any
of its affiliates) that lists for trading any option
contract that competes with an Exchange Contract,
(ii) any person that owns or controls such U.S.
securities option exchange or U.S. alternative
trading system, and (iii) any affiliate of a person
described in clause (i) or (ii) above. See By-Laws,
Article I (oo).
7 The Board Restriction was adopted by the
Exchange in 2014. See Securities Exchange Act
Release Nos. 71172 (December 23, 2013), 78 FR
79530 (December 30, 2013); and 71541 (February
12, 2014), 79 FR 9572 (February 19, 2014) (SR–
MIAX–2013–58).
The Exchange states that the Board
Restriction was added to the By-Laws in
connection with the Equity Rights
Program (‘‘ERP’’),8 and was intended to
prevent potential conflicts of interest
that might arise due to an Exchange
Director, Observer or committee
member also serving a similar role on
the governing body of a competitor.9 As
more fully described in the Notice, the
Exchange now proposes to amend the
By-Laws to eliminate the Board
Restriction.10 The Exchange states that it
has found the Board Restriction to be
unnecessarily restrictive, that it unduly
limits the availability of qualified
candidates from serving on the
Exchange Board (or other governing
body), and that the potential conflicts of
interest that the restriction was designed
to address can be more effectively and
more efficiently addressed by other
means.11
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange and, in particular,
with Section 6(b) of the Act.12 In
particular, the Commission finds that
the proposal is consistent with Section
6(b)(1) of the Act,13 which requires that
an exchange be organized and have the
capacity to be able to carry out the
purposes of the Act and to comply, and
to enforce compliance by its members
and persons associated with its
1 15
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8 Pursuant to the ERP, units representing the right
to acquire equity in the Exchange’s parent holding
company, Miami International Holdings, Inc., were
issued to participating Members in exchange for
payment of an initial purchase price or the
prepayment of certain transaction fees and the
achievement of certain liquidity addition volume
thresholds on the Exchange over a fixed period of
time. The By-Laws were also then amended to
incorporate rights granted to Members participating
in the ERP to appoint representation on the MIAX
Board. See Securities Exchange Act Release No.
70498 (September 25, 2013), 78 FR 60348 (October
1, 2013) (SR–MIAX–2013–43) and Securities
Exchange Act Release No. 71172 (December 23,
2013), 78 FR 79530 (December 30, 2013) (SR–
MIAX–2013–58).
9 See Notice, supra note 3, at 20717.
10 Specifically, the Exchange proposes to remove
the last sentence of Article II, Section 2.2(d), Article
II, Section 2.2(g)(ii), and Article IV, Section 4.2(b)
regarding the Board Restriction, and remove the
defined terms ‘‘Exchange Contract’’ and ‘‘Specified
Entity,’’ set forth in Article I (p) and (oo),
respectively, which are used only in connection
with the Board Restriction. See Notice, supra note
3, at 20717–18.
11 See Notice, supra note 3, at 20717.
12 15 U.S.C. 78f(b). In approving this proposed
rule change, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
13 15 U.S.C. 78f(b)(1).
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members, with the provisions of the
Act, the rules and regulations
thereunder, and the rules of the
Exchange.
The Exchange represents that its
proposed removal of the Board
Restriction from the By-Laws is
designed to enable MIAX to engage the
best suited and most qualified leaders to
serve in the capacity of Director,
Observer or committee member of the
Exchange and will facilitate a Board
structure and composition that will
strengthen the Exchange’s ability to
comply with the provisions of the Act
and enforce compliance by its members
with the provisions of the Act. The
Exchange also notes that most of its
competing option exchanges do not
restrict their board members from sitting
on the board of directors or other
governing body of another options
exchange.14 Further, the Commission
notes that it has previously considered
and approved the Exchange’s Board
structure without the Board Restriction,
and determined that the Exchange’s
governance provisions were designed to
enable the Exchange to carry out its
functions and responsibilities under the
Act.15 For these reasons, the
Commission finds that the proposed
rule change is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,16 that the
proposed rule change (SR–MIAX–2016–
08) be, and hereby is, approved.
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.17
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–12396 Filed 5–24–16; 8:45 am]
BILLING CODE 8011–01–P
14 See
Notice, supra note 3, at 20717.
Securities Exchange Act Release No. 68341
(December 3, 2012), 77 FR 73065, 73070 (December
7, 2012) (File No. 10–207) (order approving MIAX’s
application for registration as a national securities
exchange).
16 15 U.S.C. 78f(b)(2).
17 17 CFR 200.30–3(a)(12).
15 See
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]]>Agencies
[Federal Register Volume 81, Number 101 (Wednesday, May 25, 2016)]
[Notices]
[Pages 33283-33284]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-12396]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77876; File No. SR-MIAX-2016-08]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Order Granting Approval of Proposed Rule Change to Amend
the Exchange's Amended and Restated By-Laws Relating to the Removal of
a Board Restriction
May 20, 2016.
I. Introduction
On March 29, 2016, Miami International Securities Exchange LLC (the
``Exchange'' or ``MIAX'') filed with the Securities and Exchange
Commission (the ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
[[Page 33284]]
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
amend the Exchange's Amended and Restated By-Laws (``By-Laws'') in
order to remove a restriction prohibiting a Director, Observer or
committee member of the Exchange's Board of Directors (``Board'') from
simultaneously serving as a member of the governing body of a
competitor. The proposed rule change was published for comment in the
Federal Register on April 8, 2016.\3\ The Commission received no
comments on the proposed rule change. This order approves the proposed
rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 77507 (April 4,
2016), 81 FR 20716 (April 8, 2016) (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
Currently, the By-Laws restrict an individual who is a Director,\4\
Observer,\5\ or committee member of the Exchange from also serving as a
member of the board of directors or similar governing body of a
``Specified Entity.'' The term ``Specified Entity'' generally refers to
any U.S. securities option exchange (or facility thereof) or U.S.
alternative trading system on which securities options are traded which
competes with the Exchange.\6\ The By-Laws specify that upon any
individual who is a Director, Observer, or committee member of the
Exchange becoming a member of the board of directors or similar
governing body of a Specified Entity, such individual immediately would
cease being a Director, Observer or committee member, as applicable, of
the Board (``Board Restriction'').\7\
---------------------------------------------------------------------------
\4\ The term ``Director'' means the persons elected or appointed
to the Board from time to time in accordance with the LLC Agreement
of the Exchange and the By-Laws in their capacity as managers of the
Exchange. See By-Laws, Article I (j).
\5\ The term ``Observer'' means a person invited to attend
meetings of the Board in a nonvoting observer capacity as further
described in Article II, Section 2.2(g)(i)-(iii) of the By-Laws. See
By-Laws, Article II, Section 2.2(g).
\6\ Specifically, the term ``Specified Entity'' is defined in
the By-Laws to mean (i) any U.S. securities option exchange (or
facility thereof) or U.S. alternative trading system on which
securities options are traded (other than the Exchange or any of its
affiliates) that lists for trading any option contract that competes
with an Exchange Contract, (ii) any person that owns or controls
such U.S. securities option exchange or U.S. alternative trading
system, and (iii) any affiliate of a person described in clause (i)
or (ii) above. See By-Laws, Article I (oo).
\7\ The Board Restriction was adopted by the Exchange in 2014.
See Securities Exchange Act Release Nos. 71172 (December 23, 2013),
78 FR 79530 (December 30, 2013); and 71541 (February 12, 2014), 79
FR 9572 (February 19, 2014) (SR-MIAX-2013-58).
---------------------------------------------------------------------------
The Exchange states that the Board Restriction was added to the By-
Laws in connection with the Equity Rights Program (``ERP''),\8\ and was
intended to prevent potential conflicts of interest that might arise
due to an Exchange Director, Observer or committee member also serving
a similar role on the governing body of a competitor.\9\ As more fully
described in the Notice, the Exchange now proposes to amend the By-Laws
to eliminate the Board Restriction.\10\ The Exchange states that it has
found the Board Restriction to be unnecessarily restrictive, that it
unduly limits the availability of qualified candidates from serving on
the Exchange Board (or other governing body), and that the potential
conflicts of interest that the restriction was designed to address can
be more effectively and more efficiently addressed by other means.\11\
---------------------------------------------------------------------------
\8\ Pursuant to the ERP, units representing the right to acquire
equity in the Exchange's parent holding company, Miami International
Holdings, Inc., were issued to participating Members in exchange for
payment of an initial purchase price or the prepayment of certain
transaction fees and the achievement of certain liquidity addition
volume thresholds on the Exchange over a fixed period of time. The
By-Laws were also then amended to incorporate rights granted to
Members participating in the ERP to appoint representation on the
MIAX Board. See Securities Exchange Act Release No. 70498 (September
25, 2013), 78 FR 60348 (October 1, 2013) (SR-MIAX-2013-43) and
Securities Exchange Act Release No. 71172 (December 23, 2013), 78 FR
79530 (December 30, 2013) (SR-MIAX-2013-58).
\9\ See Notice, supra note 3, at 20717.
\10\ Specifically, the Exchange proposes to remove the last
sentence of Article II, Section 2.2(d), Article II, Section
2.2(g)(ii), and Article IV, Section 4.2(b) regarding the Board
Restriction, and remove the defined terms ``Exchange Contract'' and
``Specified Entity,'' set forth in Article I (p) and (oo),
respectively, which are used only in connection with the Board
Restriction. See Notice, supra note 3, at 20717-18.
\11\ See Notice, supra note 3, at 20717.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange
and, in particular, with Section 6(b) of the Act.\12\ In particular,
the Commission finds that the proposal is consistent with Section
6(b)(1) of the Act,\13\ which requires that an exchange be organized
and have the capacity to be able to carry out the purposes of the Act
and to comply, and to enforce compliance by its members and persons
associated with its members, with the provisions of the Act, the rules
and regulations thereunder, and the rules of the Exchange.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b). In approving this proposed rule change,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\13\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------
The Exchange represents that its proposed removal of the Board
Restriction from the By-Laws is designed to enable MIAX to engage the
best suited and most qualified leaders to serve in the capacity of
Director, Observer or committee member of the Exchange and will
facilitate a Board structure and composition that will strengthen the
Exchange's ability to comply with the provisions of the Act and enforce
compliance by its members with the provisions of the Act. The Exchange
also notes that most of its competing option exchanges do not restrict
their board members from sitting on the board of directors or other
governing body of another options exchange.\14\ Further, the Commission
notes that it has previously considered and approved the Exchange's
Board structure without the Board Restriction, and determined that the
Exchange's governance provisions were designed to enable the Exchange
to carry out its functions and responsibilities under the Act.\15\ For
these reasons, the Commission finds that the proposed rule change is
consistent with the Act.
---------------------------------------------------------------------------
\14\ See Notice, supra note 3, at 20717.
\15\ See Securities Exchange Act Release No. 68341 (December 3,
2012), 77 FR 73065, 73070 (December 7, 2012) (File No. 10-207)
(order approving MIAX's application for registration as a national
securities exchange).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that the proposed rule change (SR-MIAX-2016-08) be, and hereby
is, approved.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78f(b)(2).
---------------------------------------------------------------------------
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-12396 Filed 5-24-16; 8:45 am]
BILLING CODE 8011-01-P
