Self-Regulatory Organizations: Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Rule 321 Business Continuity and Disaster Recovery Plans Testing Requirements for Designated Members, 68373-68376 [2015-28026]

Download as PDF Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (A) Significantly affect the protection of investors or the public interest; (B) impose any significant burden on competition; and (C) by its terms, become operative for 30 days from the date on which it was filed or such shorter time as the Commission may designate it has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and paragraph (f)(6) of Rule 19b– 4 thereunder.12 A proposed rule change filed under Rule 19b–4(f)(6) 13 normally does not become operative for 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) 14 permits the Commission to 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 notes that the commencement of the operations of EDGX Options is scheduled for November 2, 2015, and waiver of the 30-day operative delay would permit the Exchange to launch EDGX Options with the proposed priority allocation model. The Exchange also notes that the proposed rule change is similar to priority rules already in place on other options exchanges and does not raise any new policy issues. Based on the foregoing, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest.15 The Commission hereby grants the Exchange’s request and designates the proposal operative upon filing. 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: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) otherwise in 11 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 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. 13 17 CFR 240.19b–4(f)(6). 14 17 CFR 240.19b–4(f)(6)(iii). 15 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 12 17 VerDate Sep<11>2014 17:00 Nov 03, 2015 Jkt 238001 68373 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Robert W. Errett, Deputy Secretary. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods: [FR Doc. 2015–28025 Filed 11–3–15; 8:45 am] 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 No. SR– EDGX–2015–52 on the subject line. Self-Regulatory Organizations: Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Rule 321 Business Continuity and Disaster Recovery Plans Testing Requirements for Designated Members Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–EDGX–2015–52. 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 will also 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–EDGX– 2015–52 and should be submitted on or before November 25, 2015. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76303; File No. SR–MIAX– 2015–61] October 29, 2015. Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on October 21, 2015, 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 and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to adopt Rule 321, Business Continuity and Disaster Recovery Plans Testing Requirements for Designated Members. 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 1 15 16 17 PO 00000 CFR 200.30–3(a)(12). Frm 00082 Fmt 4703 Sfmt 4703 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\04NON1.SGM 04NON1 68374 Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices 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 is proposing to adopt new Rule 321 to require those MIAX Members designated by the Exchange to participate in certain scheduled testing of the Exchange’s business continuity and disaster recovery plans (‘‘BC/DR plans’’), as required by Section 1004 of Regulation Systems Compliance and Integrity (‘‘Regulation SCI’’).3 As adopted by the Securities and Exchange Commission (‘‘Commission’’), Regulation SCI applies to certain selfregulatory organizations (including the Exchange), alternative trading systems (‘‘ATSs’’), plan processors, and exempt clearing agencies (collectively, ‘‘SCI entities’’), and will require these SCI entities to comply with requirements with respect to the automated systems central to the performance of their regulated activities. Among the requirements of Regulation SCI is Rule 1001(a)(2)(v), which requires the Exchange and other SCI entities to maintain ‘‘[b]usiness continuity and disaster recovery plans that include maintaining backup and recovery capabilities sufficiently resilient and geographically diverse and that are reasonably designed to achieve next business day resumption of trading and two-hour resumption of critical SCI systems following a wide-scale disruption.’’ The Exchange takes pride in the reliability and availability of its systems. Historically, MIAX systems have been up and available more than 99.999% of the time; yet as a precaution, MIAX has and intends to continue to put extensive time and resources toward planning for system failures and to implement and maintain robust BC/DR plans consistent with the Rule. As set forth below, in connection with Regulation SCI, the Exchange is proposing to require certain Members to participate in testing of the operation of the Exchange’s BC/DR plans. With respect to an SCI entity’s BC/DR plans, paragraph (a) of Rule 1004 of Regulation SCI requires each SCI entity to: ‘‘[e]stablish standards for the designation of those members or participants that the SCI entity reasonably determines are, taken as a 3 See Securities Exchange Act Release No. 73639 (November 19, 2014), 79 FR 72252 (December 5, 2014) (the ‘‘Reg SCI Adopting Release’’). VerDate Sep<11>2014 17:00 Nov 03, 2015 Jkt 238001 whole, the minimum necessary for the maintenance of fair and orderly markets in the event of the activation of such plans.’’ Paragraph (b) of Rule 1004 further requires each SCI entity to ‘‘[d]esignate members or participants pursuant to the standards established in paragraph (a) of [Rule 1004] and require participation by such designated members or participants in scheduled functional and performance testing of the operation of such plans, in the manner and frequency specified by the SCI entity, provided that such frequency shall not be less than once every 12 months.’’ In order to comply with Regulation SCI, the Exchange proposes to adopt Rule 321 governing mandatory participation in testing of Exchange disaster recovery plans and systems, as described below. First, in paragraph (a) of Rule 321, the Exchange proposes to include language from paragraph (a) of Rule 1004 of Regulation SCI to summarize the Exchange’s obligation pursuant to the rule. Specifically, the Exchange proposes to state that ‘‘[p]ursuant to Regulation Systems Compliance and Integrity (‘‘Regulation SCI’’), 17 CFR 242.1000 et seq. and with respect to the Exchange’s business continuity and disaster recovery plans, including its disaster recovery systems, the Exchange is required to establish standards for the designation of Members that the Exchange reasonably determines are, taken as a whole, the minimum necessary for the maintenance of fair and orderly markets in the event of the activation of such plans.’’ The Exchange further proposes that paragraph (a) indicate that ‘‘[t]he Exchange has established standards and will designate Members according to those standards’’ as set forth in the proposed Rule. In addition, the Exchange proposes to make clear that all Members are permitted to connect to the Exchange’s disaster recovery systems as well as to participate in testing of such systems. Proposed paragraph (a) is consistent with the Commission’s adoption of Regulation SCI, which encouraged ‘‘SCI entities to permit non-designated members or participants to participate in the testing of the SCI entity’s BC/DR plans if they request to do so.’’ 4 Second, in paragraph (b) of Rule 321, the Exchange proposes to specify the criteria that will result in a Member receiving a designation requiring it to connect to the Exchange’s disaster recovery systems and to participate in functional and performance testing as announced by the Exchange, which shall occur at least once every 12 4 See PO 00000 id at p. 72350. Frm 00083 Fmt 4703 Sfmt 4703 months. Specifically, proposed paragraph (b) would require all Members that account for a meaningful percentage of the Exchange’s volume to connect to the Exchange’s disaster recovery systems and to participate in functional and performance testing. The Exchange notes that it encourages all Members to connect to the Exchange’s disaster recovery systems and to participate in testing of such systems. In fact, the Exchange provides logical ports to all Members that connect to Exchange disaster recovery systems without additional charge in order to help reduce the economic burden of maintaining connectivity to Exchange disaster recovery systems. However, in adopting the requirements of Rule 321(b), including both the requirement to maintain connectivity to Exchange disaster recovery systems and to participate in mandatory testing of such systems, the Exchange intends to subject to the Rule only those Members that the Exchange believes are necessary to maintain fair and orderly markets at the Exchange. The Exchange believes that designating Members to participate in mandatory testing because they account for a meaningful percentage of the Exchange’s overall volume is a reasonable means to ensure the maintenance of a fair and orderly market on the Exchange. In addition to paragraphs (a) and (b) described above, the Exchange also proposes to adopt Interpretation and Policy .01, which would provide additional detail regarding the notice that will be provided to Members that have been designated pursuant to paragraph (b) of the Rule as well as the Exchange’s notice of the applicable measuring calendar quarter and method for measuring the volume threshold. As proposed, Interpretation and Policy .01 would state that for purposes of identifying Members that account for a meaningful percentage of the Exchange’s overall volume (‘‘meaningful percentage’’), the Exchange will measure volume executed on the Exchange during a calendar quarter to be determined by the Exchange (‘‘measurement quarter’’) and announced via circular distributed to Members. The meaningful percentage will also be determined by the Exchange and published in a circular distributed to Members. The meaningful percentage applicable in any measurement quarter will be published in advance of such measurement quarter and will not apply retroactively to any measurement quarter completed or in progress. The Exchange will publish the first circular consistent with this proposal prior to the Regulation SCI compliance date of E:\FR\FM\04NON1.SGM 04NON1 Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices asabaliauskas on DSK5VPTVN1PROD with NOTICES November 3, 2015. The proposed Interpretation and Policy would also require the Exchange to notify individual Members that are subject to proposed paragraph (b) based on the applicable calendar quarter’s volume following the completion of such calendar quarter. The Exchange believes the proposed notice requirements will provide Members with proper advance notice in the event they become subject to proposed Rule 321(b) to become compliant with such Rule, including allowing for adequate time to make any necessary infrastructure changes to connect to the Exchange’s disaster recovery systems for a Member that is not already connected. 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. The proposal will ensure that the Members necessary to ensure the maintenance of a fair and orderly market are properly designated consistent with Rule 1004 of Regulation SCI. Specifically, the proposal will adopt criteria with respect to the designation of Members that are required to participate in the testing of the Exchange’s BC/DR plans, as well as appropriate notification regarding such designation. As set forth in the SCI Adopting Release, ‘‘SROs have the authority, and legal responsibility, under Section 6 of the Exchange Act, to adopt and enforce rules (including rules to comply with Regulation SCI’s requirements relating to BC/DR testing) applicable to their members or participants that are designed to, among other things, 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.’’ 7 The Exchange 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 7 See supra note 4. 6 15 VerDate Sep<11>2014 17:00 Nov 03, 2015 Jkt 238001 believes that this proposal is consistent with such authority and legal responsibility. 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. To the contrary, the proposal is not a competitive proposal but rather is necessary for the Exchange’s compliance with Regulation SCI. 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 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 8 and Rule 19b–4(f)(6) 9 thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 10 normally does not become operative for 30 days after the date of filing. However, pursuant to Rule 19b–4(f)(6)(iii) 11 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 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 Exchange to incorporate changes required under Regulation SCI, such as establishing standards for designating BCP/DR Participants, prior to the November 3, 2015 compliance date. Therefore, the Commission 8 15 U.S.C. 78s(b)(3)(A). 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. 10 17 CFR 240.19b–4(f)(6). 11 17 CFR 240.19b–4(f)(6)(iii). 9 17 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 68375 designates the proposed rule change to be operative upon filing.12 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. 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–2015–61 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–2015–61. 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 the filing also will be available for inspection and copying at the principal office of the Exchange. All comments 12 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). E:\FR\FM\04NON1.SGM 04NON1 68376 Federal Register / Vol. 80, No. 213 / Wednesday, November 4, 2015 / Notices 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–2015–61 and should be submitted on or before November 25, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–28026 Filed 11–3–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76294; File No. SR– NYSEMKT–2015–83] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rules 46— Equities, 46A—Equities, 103B— Equities, and 497—Equities To Replace References to the NYSE Regulation Board of Directors With the Exchange’s Regulatory Oversight Committee October 29, 2015. asabaliauskas on DSK5VPTVN1PROD with NOTICES Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on October 19, 2015, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Exchange has designated this proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A) of the Act 4 and Rule 19b–4(f)(6)(iii) thereunder,5 which renders it effective upon filing with the Commission. 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 to amend Rules 46—Equities, 46A—Equities, CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b–4(f)(6)(iii). 20:30 Nov 03, 2015 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 on the proposed rule change. The text of those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rules 46—Equities, 46A—Equities, 103B—Equities, and 497—Equities to replace references to the NYSE Regulation Board of Directors with the Exchange’s Regulatory Oversight Committee (‘‘ROC’’). The Exchange recently amended the Operating Agreement to, among other things, establish a ROC.6 The Exchange now proposes the following conforming amendments to Rules 46—Equities, 46A– Equities, 103B—Equities, and 497—Equities. These proposed changes, described below, are similar to changes to the rules of the Exchange’s affiliate, NYSE, which were recently approved by the Commission.7 First, the Exchange proposes to amend Rule 46(b)—Equities, which governs the appointment of Floor Officials, to replace the reference to the ‘‘NYSE Regulation Board of Directors’’ with the ROC as the entity with which the Board would consult on those appointments. Similarly, the Exchange proposes to amend Rule 46A—Equities, which 6 See Securities Exchange Act Release No. 75148 (June 11, 2015), 80 FR 34751 (SR–NYSEMKT–2015– 27) (approving creation of a ROC with primary responsibility to independently monitor the exchange’s regulatory operations). 7 See Securities Exchange Act Release No. 75991 (September 28, 2015), 80 FR 59837, 59839 (October 2, 2015) (SR–NYSE–2015–27). 13 17 VerDate Sep<11>2014 103B—Equities, and 497—Equities to replace references to the NYSE Regulation Board of Directors with the Exchange’s Regulatory Oversight Committee. 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. Jkt 238001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 governs the appointment of Executive Floor Governors, to replace the ‘‘Board of Directors of NYSE Regulation’’ with the ROC as the entity with which the Board would consult on those appointments. Third, Rule 103B—Equities, which governs the security allocation and reallocation process, would be amended to replace ‘‘NYSER Board of Directors’’ in subsection (b) of Supplementary Material .10 with the ‘‘Exchange’s Regulatory Oversight Committee’’. Finally, Rule 497—Equities sets forth certain requirements that securities issued by Intercontinental Exchange, Inc., or its affiliates must meet before they can be listed on the Exchange. The Exchange proposes to replace ‘‘NYSE Regulation Board of Directors’’ in Rule 497(b) and (c)(1) with ‘‘Exchange’s Regulatory Oversight Committee’’. The ROC is now the entity that approves regulatory findings that the security to be listed satisfies Exchange listing rules under Rule 497(b) and that would receive the reports specified in Rule 497(c)—Equities. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act 8 in general, and with Section 6(b)(5) 9 in particular, in that it 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, and to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, help to protect investors and the public interest. Specifically, the Exchange believes that replacing references to the NYSE Regulation Board of Directors with the Exchange’s ROC in Rules 46—Equities, 46A— Equities, 103B—Equities, and 497— Equities removes impediments to and perfects the mechanism of a free and open market by removing confusion that may result from having obsolete references in the Exchange’s rulebook. The Exchange further believes that the proposal removes impediments to and perfects the mechanism of a free and open market by ensuring that persons 8 15 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). E:\FR\FM\04NON1.SGM 04NON1

Agencies

[Federal Register Volume 80, Number 213 (Wednesday, November 4, 2015)]
[Notices]
[Pages 68373-68376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28026]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76303; File No. SR-MIAX-2015-61]


Self-Regulatory Organizations: Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Adopt Rule 321 Business Continuity and Disaster 
Recovery Plans Testing Requirements for Designated Members

October 29, 2015.
    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on October 21, 2015, 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 and II below, which Items have been 
prepared by the Exchange. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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 adopt Rule 321, Business 
Continuity and Disaster Recovery Plans Testing Requirements for 
Designated Members.
    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

[[Page 68374]]

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 is proposing to adopt new Rule 321 to require those 
MIAX Members designated by the Exchange to participate in certain 
scheduled testing of the Exchange's business continuity and disaster 
recovery plans (``BC/DR plans''), as required by Section 1004 of 
Regulation Systems Compliance and Integrity (``Regulation SCI'').\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 73639 (November 19, 
2014), 79 FR 72252 (December 5, 2014) (the ``Reg SCI Adopting 
Release'').
---------------------------------------------------------------------------

    As adopted by the Securities and Exchange Commission 
(``Commission''), Regulation SCI applies to certain self-regulatory 
organizations (including the Exchange), alternative trading systems 
(``ATSs''), plan processors, and exempt clearing agencies 
(collectively, ``SCI entities''), and will require these SCI entities 
to comply with requirements with respect to the automated systems 
central to the performance of their regulated activities. Among the 
requirements of Regulation SCI is Rule 1001(a)(2)(v), which requires 
the Exchange and other SCI entities to maintain ``[b]usiness continuity 
and disaster recovery plans that include maintaining backup and 
recovery capabilities sufficiently resilient and geographically diverse 
and that are reasonably designed to achieve next business day 
resumption of trading and two-hour resumption of critical SCI systems 
following a wide-scale disruption.'' The Exchange takes pride in the 
reliability and availability of its systems. Historically, MIAX systems 
have been up and available more than 99.999% of the time; yet as a 
precaution, MIAX has and intends to continue to put extensive time and 
resources toward planning for system failures and to implement and 
maintain robust BC/DR plans consistent with the Rule. As set forth 
below, in connection with Regulation SCI, the Exchange is proposing to 
require certain Members to participate in testing of the operation of 
the Exchange's BC/DR plans.
    With respect to an SCI entity's BC/DR plans, paragraph (a) of Rule 
1004 of Regulation SCI requires each SCI entity to: ``[e]stablish 
standards for the designation of those members or participants that the 
SCI entity reasonably determines are, taken as a whole, the minimum 
necessary for the maintenance of fair and orderly markets in the event 
of the activation of such plans.'' Paragraph (b) of Rule 1004 further 
requires each SCI entity to ``[d]esignate members or participants 
pursuant to the standards established in paragraph (a) of [Rule 1004] 
and require participation by such designated members or participants in 
scheduled functional and performance testing of the operation of such 
plans, in the manner and frequency specified by the SCI entity, 
provided that such frequency shall not be less than once every 12 
months.'' In order to comply with Regulation SCI, the Exchange proposes 
to adopt Rule 321 governing mandatory participation in testing of 
Exchange disaster recovery plans and systems, as described below.
    First, in paragraph (a) of Rule 321, the Exchange proposes to 
include language from paragraph (a) of Rule 1004 of Regulation SCI to 
summarize the Exchange's obligation pursuant to the rule. Specifically, 
the Exchange proposes to state that ``[p]ursuant to Regulation Systems 
Compliance and Integrity (``Regulation SCI''), 17 CFR 242.1000 et seq. 
and with respect to the Exchange's business continuity and disaster 
recovery plans, including its disaster recovery systems, the Exchange 
is required to establish standards for the designation of Members that 
the Exchange reasonably determines are, taken as a whole, the minimum 
necessary for the maintenance of fair and orderly markets in the event 
of the activation of such plans.'' The Exchange further proposes that 
paragraph (a) indicate that ``[t]he Exchange has established standards 
and will designate Members according to those standards'' as set forth 
in the proposed Rule. In addition, the Exchange proposes to make clear 
that all Members are permitted to connect to the Exchange's disaster 
recovery systems as well as to participate in testing of such systems. 
Proposed paragraph (a) is consistent with the Commission's adoption of 
Regulation SCI, which encouraged ``SCI entities to permit non-
designated members or participants to participate in the testing of the 
SCI entity's BC/DR plans if they request to do so.'' \4\
---------------------------------------------------------------------------

    \4\ See id at p. 72350.
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    Second, in paragraph (b) of Rule 321, the Exchange proposes to 
specify the criteria that will result in a Member receiving a 
designation requiring it to connect to the Exchange's disaster recovery 
systems and to participate in functional and performance testing as 
announced by the Exchange, which shall occur at least once every 12 
months. Specifically, proposed paragraph (b) would require all Members 
that account for a meaningful percentage of the Exchange's volume to 
connect to the Exchange's disaster recovery systems and to participate 
in functional and performance testing.
    The Exchange notes that it encourages all Members to connect to the 
Exchange's disaster recovery systems and to participate in testing of 
such systems. In fact, the Exchange provides logical ports to all 
Members that connect to Exchange disaster recovery systems without 
additional charge in order to help reduce the economic burden of 
maintaining connectivity to Exchange disaster recovery systems. 
However, in adopting the requirements of Rule 321(b), including both 
the requirement to maintain connectivity to Exchange disaster recovery 
systems and to participate in mandatory testing of such systems, the 
Exchange intends to subject to the Rule only those Members that the 
Exchange believes are necessary to maintain fair and orderly markets at 
the Exchange. The Exchange believes that designating Members to 
participate in mandatory testing because they account for a meaningful 
percentage of the Exchange's overall volume is a reasonable means to 
ensure the maintenance of a fair and orderly market on the Exchange.
    In addition to paragraphs (a) and (b) described above, the Exchange 
also proposes to adopt Interpretation and Policy .01, which would 
provide additional detail regarding the notice that will be provided to 
Members that have been designated pursuant to paragraph (b) of the Rule 
as well as the Exchange's notice of the applicable measuring calendar 
quarter and method for measuring the volume threshold. As proposed, 
Interpretation and Policy .01 would state that for purposes of 
identifying Members that account for a meaningful percentage of the 
Exchange's overall volume (``meaningful percentage''), the Exchange 
will measure volume executed on the Exchange during a calendar quarter 
to be determined by the Exchange (``measurement quarter'') and 
announced via circular distributed to Members. The meaningful 
percentage will also be determined by the Exchange and published in a 
circular distributed to Members. The meaningful percentage applicable 
in any measurement quarter will be published in advance of such 
measurement quarter and will not apply retroactively to any measurement 
quarter completed or in progress. The Exchange will publish the first 
circular consistent with this proposal prior to the Regulation SCI 
compliance date of

[[Page 68375]]

November 3, 2015. The proposed Interpretation and Policy would also 
require the Exchange to notify individual Members that are subject to 
proposed paragraph (b) based on the applicable calendar quarter's 
volume following the completion of such calendar quarter. The Exchange 
believes the proposed notice requirements will provide Members with 
proper advance notice in the event they become subject to proposed Rule 
321(b) to become compliant with such Rule, including allowing for 
adequate time to make any necessary infrastructure changes to connect 
to the Exchange's disaster recovery systems for a Member that is not 
already connected.
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. The proposal will ensure 
that the Members necessary to ensure the maintenance of a fair and 
orderly market are properly designated consistent with Rule 1004 of 
Regulation SCI. Specifically, the proposal will adopt criteria with 
respect to the designation of Members that are required to participate 
in the testing of the Exchange's BC/DR plans, as well as appropriate 
notification regarding such designation. As set forth in the SCI 
Adopting Release, ``SROs have the authority, and legal responsibility, 
under Section 6 of the Exchange Act, to adopt and enforce rules 
(including rules to comply with Regulation SCI's requirements relating 
to BC/DR testing) applicable to their members or participants that are 
designed to, among other things, 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.'' \7\ The Exchange believes 
that this proposal is consistent with such authority and legal 
responsibility.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ See supra note 4.
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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. To the contrary, the 
proposal is not a competitive proposal but rather is necessary for the 
Exchange's compliance with Regulation SCI.

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 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 \8\ and Rule 19b-4(f)(6) \9\ thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii) \11\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
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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 Exchange to incorporate changes required under 
Regulation SCI, such as establishing standards for designating BCP/DR 
Participants, prior to the November 3, 2015 compliance date. Therefore, 
the Commission designates the proposed rule change to be operative upon 
filing.\12\
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    \12\ 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.

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-2015-61 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-2015-61. 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 the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments

[[Page 68376]]

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-2015-61 and 
should be submitted on or before November 25, 2015.

For the Commission, by the Division of Trading and Markets, pursuant 
to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-28026 Filed 11-3-15; 8:45 am]
 BILLING CODE 8011-01-P
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