Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Priority Customer Size, 27462-27464 [2013-11141]
Download as PDF
<![CDATA[
27462
Federal Register / Vol. 78, No. 91 / Friday, May 10, 2013 / Notices
Section 6 of the Act 19 and the rules and
regulations thereunder applicable to a
national securities exchange.20 In
particular, the Commission finds that
the proposed rule change is consistent
with Section 6(b)(5) of the Act,21 which
requires, among other things, that the
Exchange’s rules be 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 mechanism of a free and open
market and a national market system,
and, in general, to protect investors and
the public interest.
The Commission believes that NSX’s
proposed new order type will offer
Users the option of interacting with
marketable orders on the NSX’s Book
without having to incur the delays
associated with the order delivery
service. Accordingly, the Commission
finds that the proposed rule change is
consistent with the Act as 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 protects investors and
the public interest. The Commission
further believes that NSX’s proposed
new definitions will provide clarity
when referring to the Auto-Ex Mode of
order interaction and the Auto-Ex order
type, which will further the Act’s goal
of promoting just and equitable
principles of trade.
The Commission received two
comment letters on the proposed rule
change. Both commenters asserted that
the proposed order type raises concerns
under Regulation NMS.22 Specifically,
one commenter stated that the proposed
Auto-Ex Only order is inconsistent with
the underlying policy goals of Rule 611
of Regulation NMS (‘‘Order Protection
Rule’’) 23 by designating that only
certain ‘‘protected quotations’’ are in
fact protected.24 NSX responded to this
concern by explaining that the proposed
Auto-Ex Only order would not tradethrough a protected quotation
established by an order submitted via
19 15
U.S.C. 78f.
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).
21 15 U.S.C. 78f(b)(5).
22 See SIFMA Letter and Driscoll Letter, supra
note 4.
23 17 CFR 242.611. Rule 611(a)(1) requires trading
centers to, among other things, establish, maintain,
and enforce written policies and procedures that are
reasonably designed to prevent trade-throughs on
that trading center of protected quotations in NMS
stocks.
24 See SIFMA Letter, supra note 4, at 2.
mstockstill on DSK4VPTVN1PROD with NOTICES
20 In
VerDate Mar<15>2010
18:05 May 09, 2013
Jkt 229001
Order Delivery Mode.25 According to
the Exchange, Blade would reject any
Auto-Ex Only order when there is an
order that was entered via Order
Delivery Mode that has price/time
priority resting on the NSX Book. Based
on the Exchange’s representations, the
Commission does not believe that the
Auto-Ex Only order is inconsistent with
Rule 611 of Regulation NMS because an
Auto-Ex Only order will not tradethrough a protected quotation in
violation of Rule 611.
In addition, one of the commenters
stated that the proposed new order type
is inconsistent with Rule 610(a) of
Regulation NMS (‘‘Access to Quotations
Rule’’),26 which prohibits an exchange
from imposing discriminatory terms that
prevent or inhibit any person from
obtaining efficient access to such
quotations, by preventing orders
submitted through Order Delivery Mode
from interacting with Auto-Ex Only
orders.27 NSX responded to this
commenter’s concern by stating that the
Auto-Ex Only order would not prevent
or inhibit any person from obtaining
access to a displayed quotation.28 The
Exchange further explained that Users
could access a displayed quotation by
submitting an intermarket sweep order
or by submitting an Auto-Ex Only order
to gain access to orders in the
Exchange’s displayed quotations that
are entered using the Auto-Ex Mode.29
The Commission does not believe that
the Auto-Ex Only order is inconsistent
with the Access to Quotations Rule
because it does not prevent or inhibit a
market participant from gaining access
to a displayed quotation.
Both commenters also noted concerns
regarding the complexity of the U.S.
equity market structure, and one
commenter stated that the NSX’s
proposal would unnecessarily continue
the trend of complexity for its sake,
without justification as to how the
proposal would serve the larger
investing public.30 The same
commenter believes that the NSX’s
proposal adds to the proliferation of
order types, with the potential to cause
investor confusion without serving any
identifiable policy objective other than
to allow market participants to bypass
quotations that are otherwise entitled to
trade-through protection under
Regulation NMS simply because of the
manner in which the quotations were
25 See
NSX Response, supra note 5, at 2.
CFR 242.610(a).
27 See SIFMA Letter, supra note 4, at 2–3.
28 See NSX Response, supra note 5, at 2.
29 See id.
30 See Driscoll Letter, supra note 4, at 1–2 and
SIFMA Letter, supra note 4, at 3.
26 17
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
entered.31 The other commenter
asserted that the proposed order type
adds another layer of complexity to an
already overly complex market
structure.32 The Commission believes
that the NSX’s proposed Auto-Ex Only
order will benefit Users by offering them
the option of interacting with
marketable orders on the NSX’s Book
without having to incur the delays
associated with the order delivery
service and will not cause investor
confusion or significantly add to the
complexity of the existing market
structure.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,33 that the
proposed rule change (SR–NSX–2013–
02) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–11172 Filed 5–9–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69518; File No. SR–MIAX–
2013–18]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Priority Customer
Size
May 6, 2013.
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 April 24, 2013, Miami International
Securities Exchange LLC (‘‘MIAX’’ or
‘‘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
31 See
SIFMA Letter, supra note 4, at 3.
Driscoll Letter, supra note 4, at 2. The
commenter went on to question whether the current
market structure needs an order delivery function
and whether the current criteria under which order
delivery operates is appropriate. Id. at 2–4. This
concern is beyond the scope of the proposed rule
change and the Commission’s consideration of such
proposed rule change.
33 15 U.S.C. 78s(b)(2).
34 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
32 See
E:\FR\FM\10MYN1.SGM
10MYN1
Federal Register / Vol. 78, No. 91 / Friday, May 10, 2013 / Notices
comments on the proposed rule change
from interested persons.
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 506, Collection
and Dissemination of Quotations, by
adopting new Exchange Rule 506(c)(ii)
to state that the Exchange will make
available to subscribers of its MIAX Top
of Market (‘‘ToM’’) data feed the
quantity of Priority Customer (defined
below) contracts included in the MIAX
Best Bids and Offers (‘‘MBBOs’’)
disseminated by the Exchange.
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.
mstockstill on DSK4VPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to make available to
subscribers of its ToM market data
product 3 the quantity of Priority
Customer (defined below) contracts
included in the MBBO disseminated by
the Exchange in order to provide
additional transparency to ToM
subscribers regarding the disseminated
MBBO. The Exchange does not intend to
charge additional fees for the inclusion
of Priority Customer size in the
aggregate size component of ToM at this
time.
Currently, the ToM is a direct data
feed that includes: the Exchange’s best
bid and offer, with aggregate size and
last sale information on the MIAX
system; opening imbalance condition
3 See Securities Exchange Act Release No. 69007
(February 28, 2013), 78 FR 14617 (March 6, 2013)
(SR–MIAX–2013–05).
VerDate Mar<15>2010
18:05 May 09, 2013
Jkt 229001
information; opening and intra-day
routing information; Expanded Quote
Range information; Post-Halt
Notification; and Liquidity Refresh
condition information.4 The ToM data
feed includes data that is identical to
the data sent to the processor for the
Options Price Reporting Authority
(‘‘OPRA’’). The ToM and OPRA data
leave the MIAX system at the same time,
as required under Section 5.2(c)(iii)(B)
of the Limited Liability Company
Agreement of the Options Price
Reporting Authority LLC (the ‘‘OPRA
Plan’’), which prohibits the
dissemination of proprietary
information on any more timely basis
than the same information is furnished
to the OPRA System for inclusion in
OPRA’s consolidated dissemination of
options information.
The Exchange now proposes to make
available additional information in the
ToM data feed that specifies the
quantity of Priority Customer 5 contracts
that are included in the aggregate size of
the MBBO. Information regarding the
quantity of Priority Customer interest
included in the size of the MBBO may
provide market participants
transparency as to how orders would be
allocated when the Priority Customer
Overlay 6 is in effect. When the Priority
Customer Overlay is in effect, Priority
Customer Orders on the Exchange
generally have priority over Professional
Interest and all Market Maker interest at
the same price. The Exchange believes
that the additional information
regarding the quantity of Priority
Customers contracts may provide
certain ToM subscribers an additional
tool to use when making routing,
quotation, price and size decisions
regarding where they should send
orders and quotes, and the nature of
such orders and quotes (i.e., price and
size).
As stated above, the Exchange is not
proposing at this time to assess
additional fees for the inclusion of
4 See
id.
term ‘‘Priority Customer’’ means a person
or entity that (i) is not a broker or dealer in
securities, and (ii) does not place more than 390
orders in listed options per day on average during
a calendar month for its own beneficial accounts(s).
See Exchange Rule 100.
6 The Exchange generally uses a pro-rata
allocation model, and deploys certain ‘‘Priority
Overlays’’ on a class-by-class basis. One such
Priority Overlay is the Priority Customer Overlay.
When the Priority Customer Overlay is in effect, the
highest bid and lowest offer have priority except
that Priority Customer Orders have priority over
Professional Interest and all Market Maker interest
at the same price. If there are two or more Priority
Customer Orders for the same options series at the
same price, priority is afforded to such Priority
Customer Orders in the sequence in which they are
received by the System. See Exchange Rule
514(d)(1).
5 The
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
27463
Priority Customer size as a component
of the information included in the ToM
market data product. The Exchange
notes that it would file a 19b–4 Rule
Filing prior to assessing additional fees
for the Priority Customer size
component of the information included
in the ToM market data product.
Because of the technology changes
associated with this rule proposal, the
Exchange will announce the
implementation date of the proposal in
an Exchange Circular to be published no
later than 30 days after the publication
of the notice in the Federal Register.
The implementation date will be no
later than 30 days following publication
of the Exchange Circular announcing
publication of the notice in the Federal
Register.
2. Statutory Basis
MIAX believes that its proposed rule
change is consistent with Section 6(b) 7
of the Act in general, and furthers the
objectives of Section 6(b)(5) 8 of the Act
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, and it is not designed to
permit unfair discrimination among
customers, brokers, or dealers.
The addition of Priority Customer size
as a component of the information
included in the ToM product is
designed to promote just and equitable
principles of trade by providing ToM
subscribers with market data that
should enable them to make informed
decisions on trading in MIAX options
by using the ToM data to assess current
market conditions that directly affect
such decisions. The proposal removes
impediments to, and is designed to
further perfect, the mechanisms of a free
and open market and a national market
system by making the MIAX market
more transparent and accessible to
market participants making routing
decisions concerning their options
orders, and concerning the nature of
their quotes.
The ToM market data product is also
designed to protect investors and the
public interest by providing market data
to subscribers that offers market
participants additional information in
7 15
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
E:\FR\FM\10MYN1.SGM
10MYN1
27464
Federal Register / Vol. 78, No. 91 / Friday, May 10, 2013 / Notices
IV. Solicitation of Comments
order to make decisions concerning
their orders and/or quotes.
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 not
necessary or appropriate in furtherance
of the purposes of the Act.
MIAX operates within a highly
competitive market in which market
participants can readily send order flow
to other competing venues if, among
other things, they deem allocation rules
at a particular venue to be unreasonable
or disproportionate. The proposed rule
change is intended to offer market
participants additional information and
transparency in the marketplace, and
therefore enhances competition among
exchanges by further enabling market
participants to make informed order
routing and quoting decisions.
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
mstockstill on DSK4VPTVN1PROD with NOTICES
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.
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.
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.
VerDate Mar<15>2010
18:05 May 09, 2013
Jkt 229001
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:
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–MIAX–2013–18 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–MIAX–2013–18. 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–
2013–18 and should be submitted on or
before May 31, 2013.
Frm 00101
Fmt 4703
[FR Doc. 2013–11141 Filed 5–9–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
PO 00000
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Kevin M. O’Neill,
Deputy Secretary.
Sfmt 4703
[Release No. 34–69522; File No. SR–BX–
2013–034]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change to Its Schedule
of Fees and Rebates for Execution of
Orders for Securities Priced at $1 or
More Under Rule 7018
May 6, 2013.
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 April 30,
2013, NASDAQ OMX BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes changes to its
schedule of fees and rebates for
execution of orders for securities priced
at $1 or more under Rule 7018. While
these amendments are effective upon
filing, the Exchange has designated the
proposed amendments to be operative
on May 1, 2013. The text of the
proposed rule change is also available
on the Exchange’s Web site at https://
nasdaqomxbx.cchwallstreet.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
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\10MYN1.SGM
10MYN1
]]>Agencies
[Federal Register Volume 78, Number 91 (Friday, May 10, 2013)]
[Notices]
[Pages 27462-27464]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-11141]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69518; File No. SR-MIAX-2013-18]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Priority Customer Size
May 6, 2013.
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 April 24, 2013, Miami International Securities
Exchange LLC (``MIAX'' or ``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
[[Page 27463]]
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 Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend Exchange Rule 506,
Collection and Dissemination of Quotations, by adopting new Exchange
Rule 506(c)(ii) to state that the Exchange will make available to
subscribers of its MIAX Top of Market (``ToM'') data feed the quantity
of Priority Customer (defined below) contracts included in the MIAX
Best Bids and Offers (``MBBOs'') disseminated by the Exchange.
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 purpose of the proposed rule change is to make available to
subscribers of its ToM market data product \3\ the quantity of Priority
Customer (defined below) contracts included in the MBBO disseminated by
the Exchange in order to provide additional transparency to ToM
subscribers regarding the disseminated MBBO. The Exchange does not
intend to charge additional fees for the inclusion of Priority Customer
size in the aggregate size component of ToM at this time.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 69007 (February 28,
2013), 78 FR 14617 (March 6, 2013) (SR-MIAX-2013-05).
---------------------------------------------------------------------------
Currently, the ToM is a direct data feed that includes: the
Exchange's best bid and offer, with aggregate size and last sale
information on the MIAX system; opening imbalance condition
information; opening and intra-day routing information; Expanded Quote
Range information; Post-Halt Notification; and Liquidity Refresh
condition information.\4\ The ToM data feed includes data that is
identical to the data sent to the processor for the Options Price
Reporting Authority (``OPRA''). The ToM and OPRA data leave the MIAX
system at the same time, as required under Section 5.2(c)(iii)(B) of
the Limited Liability Company Agreement of the Options Price Reporting
Authority LLC (the ``OPRA Plan''), which prohibits the dissemination of
proprietary information on any more timely basis than the same
information is furnished to the OPRA System for inclusion in OPRA's
consolidated dissemination of options information.
---------------------------------------------------------------------------
\4\ See id.
---------------------------------------------------------------------------
The Exchange now proposes to make available additional information
in the ToM data feed that specifies the quantity of Priority Customer
\5\ contracts that are included in the aggregate size of the MBBO.
Information regarding the quantity of Priority Customer interest
included in the size of the MBBO may provide market participants
transparency as to how orders would be allocated when the Priority
Customer Overlay \6\ is in effect. When the Priority Customer Overlay
is in effect, Priority Customer Orders on the Exchange generally have
priority over Professional Interest and all Market Maker interest at
the same price. The Exchange believes that the additional information
regarding the quantity of Priority Customers contracts may provide
certain ToM subscribers an additional tool to use when making routing,
quotation, price and size decisions regarding where they should send
orders and quotes, and the nature of such orders and quotes (i.e.,
price and size).
---------------------------------------------------------------------------
\5\ The term ``Priority Customer'' means a person or entity that
(i) is not a broker or dealer in securities, and (ii) does not place
more than 390 orders in listed options per day on average during a
calendar month for its own beneficial accounts(s). See Exchange Rule
100.
\6\ The Exchange generally uses a pro-rata allocation model, and
deploys certain ``Priority Overlays'' on a class-by-class basis. One
such Priority Overlay is the Priority Customer Overlay. When the
Priority Customer Overlay is in effect, the highest bid and lowest
offer have priority except that Priority Customer Orders have
priority over Professional Interest and all Market Maker interest at
the same price. If there are two or more Priority Customer Orders
for the same options series at the same price, priority is afforded
to such Priority Customer Orders in the sequence in which they are
received by the System. See Exchange Rule 514(d)(1).
---------------------------------------------------------------------------
As stated above, the Exchange is not proposing at this time to
assess additional fees for the inclusion of Priority Customer size as a
component of the information included in the ToM market data product.
The Exchange notes that it would file a 19b-4 Rule Filing prior to
assessing additional fees for the Priority Customer size component of
the information included in the ToM market data product.
Because of the technology changes associated with this rule
proposal, the Exchange will announce the implementation date of the
proposal in an Exchange Circular to be published no later than 30 days
after the publication of the notice in the Federal Register. The
implementation date will be no later than 30 days following publication
of the Exchange Circular announcing publication of the notice in the
Federal Register.
2. Statutory Basis
MIAX believes that its proposed rule change is consistent with
Section 6(b) \7\ of the Act in general, and furthers the objectives of
Section 6(b)(5) \8\ of the Act 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, and it is not designed to
permit unfair discrimination among customers, brokers, or dealers.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The addition of Priority Customer size as a component of the
information included in the ToM product is designed to promote just and
equitable principles of trade by providing ToM subscribers with market
data that should enable them to make informed decisions on trading in
MIAX options by using the ToM data to assess current market conditions
that directly affect such decisions. The proposal removes impediments
to, and is designed to further perfect, the mechanisms of a free and
open market and a national market system by making the MIAX market more
transparent and accessible to market participants making routing
decisions concerning their options orders, and concerning the nature of
their quotes.
The ToM market data product is also designed to protect investors
and the public interest by providing market data to subscribers that
offers market participants additional information in
[[Page 27464]]
order to make decisions concerning their orders and/or quotes.
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 not necessary or appropriate in
furtherance of the purposes of the Act.
MIAX operates within a highly competitive market in which market
participants can readily send order flow to other competing venues if,
among other things, they deem allocation rules at a particular venue to
be unreasonable or disproportionate. The proposed rule change is
intended to offer market participants additional information and
transparency in the marketplace, and therefore enhances competition
among exchanges by further enabling market participants to make
informed order routing and quoting decisions.
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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-2013-18 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-MIAX-2013-18. 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-2013-18 and should be
submitted on or before May 31, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11141 Filed 5-9-13; 8:45 am]
BILLING CODE 8011-01-P
