Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Chapter 19, 28716-28718 [2017-13096]
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28716
Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices
The public may view the background
documentation for this information
collection at the following Web site,
www.reginfo.gov . Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to: Shagufta_
Ahmed@omb.eop.gov; and (ii) Pamela
Dyson, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
100 F Street NE., Washington, DC 20549
or send an email to: PRA_Mailbox@
sec.gov. Comments must be submitted to
OMB within 30 days of this notice.
Dated: June 19, 2017.
Eduardo A. Aleman,
Assistant Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80965; File No. SR–MRX–
2017–07]
Self-Regulatory Organizations; Nasdaq
MRX, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Chapter 19
June 19, 2017.
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 June 6,
2017, Nasdaq MRX, LLC (‘‘MRX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
asabaliauskas on DSKBBXCHB2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Chapter 19 to notify members of a
systems issue related to allocations
made pursuant to Supplementary
Material .02(a)–(b) to Rule 1901.
The text of the proposed rule change
is available on the Exchange’s Web site
at www.ise.com, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
VerDate Sep<11>2014
19:21 Jun 22, 2017
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
[FR Doc. 2017–13144 Filed 6–22–17; 8:45 am]
1 15
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Jkt 241001
The purpose of the proposed rule
change is to amend Chapter 19 to notify
members of a systems issue related to
allocations made pursuant to
Supplementary Material .02(a)–(b) to
Rule 1901 (‘‘Flash auction’’). Pursuant
to Supplementary Material .02 to Rule
1901, when the automatic execution of
an incoming order would result in an
impermissible Trade Through,3 such
order is exposed at the current national
best bid or offer (‘‘NBBO’’) to all
members, and members are given an
opportunity to enter responses up to the
size of the order being exposed.
Supplementary Material .02(a)–(b) to
Rule 1901 provides that interest
executed in the Flash auction is
allocated in price priority, and, at the
same price, Priority Customer orders
will be executed first in time priority
and then all other interest (orders,
quotes, and responses) will be allocated
pro-rata based on size. Currently,
however, the system is erroneously
providing the Primary Market Maker
(‘‘PMM’’) an enhanced allocation after
Priority Customer Orders on the book,
and ahead of Responses, Professional
Orders, and other market maker quotes.
Specifically, the PMM is being
erroneously given participation rights in
a Flash auction pursuant to
Supplementary Material .01(b)–(c) to
Rule 713, which results in the PMM
receiving a potentially larger share of
the order to be executed. That is, if the
PMM is quoting at the best price and the
conditions in Supplementary Material
.01(b)–(c) to Rule 713 are satisfied, the
PMM is given participation rights equal
3 ‘‘Trade-Through’’ means a transaction in an
option series at a price that is lower than a
Protected Bid or higher than a Protected Offer. See
Rule 1900(q).
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
to the greater of (i) the proportion of the
total size at the best price represented
by the size of its quote, or (ii) sixty
percent (60%) of the contracts to be
allocated if there is only one (1) other
Professional Order or market maker
quotation at the best price, forty percent
(40%) if there are two (2) other
Professional Orders and/or market
maker quotes at the best price, and
thirty percent (30%) if there are more
than two (2) other Professional Orders
and/or market maker quotes at the best
price. Alternatively, orders for five (5)
contracts or fewer will be executed first
by the PMM, if he is present at that
price.
This enhanced allocation was
intended for the PMM when orders are
allocated in the regular market, and not
for the allocation of an order exposed
pursuant to Supplementary Material .02
to Rule 1901 (i.e., the Flash auction).
The Exchange has notified members and
the Commission of this systems issue
pursuant to Regulation SCI. The
purpose of the proposed rule change is
to provide additional notification to
members by noting in Chapter 19 of the
Exchange’s rulebook the discrepancy
between the allocation described in the
rule and the allocation currently being
given by the Exchange’s trading system.
The Exchange is currently migrating its
trading system to the Nasdaq INET
architecture, and the allocation issue
will be resolved as symbols start trading
on INET in Q3 2017. In the interim, the
Exchange proposes to add language to
Chapter 19 to notify members that until
such time as symbols are migrated to
INET, Flash auction allocations
pursuant to Supplementary Material
.02(a)–(b) to Rule 1901 will not be
provided as described in that rule.
Instead, PMM quotes will be given a
Flash auction allocation pursuant to
Supplementary Material .01(b)–(c) to
Rule 713 after Priority Customer Orders
on the book, and ahead of Responses,
Professional Orders, and other market
maker quotes, until such time as
symbols are migrated to the INET
trading system. The Exchange believes
that this language will reduce member
confusion regarding how allocations
will be processed prior to the resolution
of this systems issue.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder that
are applicable to a national securities
exchange, and, in particular, with the
requirements of Section 6(b) of the Act.4
4 15
E:\FR\FM\23JNN1.SGM
U.S.C. 78f(b).
23JNN1
Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices
asabaliauskas on DSKBBXCHB2PROD with NOTICES
In particular, the proposal is consistent
with Section 6(b)(5) of the Act,5 because
is designed to promote just and
equitable principles of trade, 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 Exchange believes that the
proposed rule change is consistent with
the protection of investors and the
public interest because the proposed
rule language more accurately reflects
the way contracts will be allocated in
the Flash auction until the systems issue
is resolved. Due to a systems issue,
allocations in the Flash auction do not
take place in the manner described in
Supplementary Material .02(a)–(b) to
Rule 1901. The proposed rule change
makes this clear in the Exchange’s rules,
and supplements notifications given to
members and the Commission pursuant
to Regulation SCI. While the Exchange
intends to allocate contracts in the Flash
auction as described in Supplementary
Material .02(a)–(b) to Rule 1901, the
Exchange is taking this temporary
measure to ensure that members are
properly notified of the current system
behavior. The proposed rule change
does not make any permanent changes
to the Exchange’s treatment of Flash
auction allocations, which will be
processed correctly when the Exchange
migrates its trading system to INET in
Q3 2017. The Exchange believes that the
proposed rule change will promote just
and equitable principles of trade since
it is a temporary change, and is
designed solely to provide additional
notification and clarity to members of
the Flash auction allocation issue. The
Exchange intends to amend the manner
in which the system operates to conform
to the current rule text as symbols
migrate to INET in Q3 2017.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,6 the Exchange does not believe
that the proposed rule change will
impose any burden on intermarket or
intramarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is designed to
more accurately reflect the way the
trading system allocates contracts in the
Flash auction today, and is not intended
to be a permanent rule of the Exchange.
The Flash auction allocation will be
corrected with the migration of the
Exchange to INET technology, and the
5 15
6 15
U.S.C. 78f(b)(5).
U.S.C. 78f(b)(8).
VerDate Sep<11>2014
19:21 Jun 22, 2017
Jkt 241001
proposed rule change is being filed
solely to provide additional notice to
members in the interim. The proposed
rule change is therefore not designed to
impose any significant burden on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or 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 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)(iii) of the Act 7 and
subparagraph (f)(6) of Rule 19b–4
thereunder.8
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) 9 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. In its
filing with the Commission, the
Exchange requests that the Commission
waive the 30-day operative delay. The
Exchange represents that it filed the
proposed rule change to provide
additional notice to members
concerning the current handling of
orders and quotes executed in a Flash
auction, and that waiver of the operative
delay is consistent with the protection
of investors and the public interest as it
will allow the Exchange to immediately
reflect in its rules the allocation
methodology currently in place for
Flash auctions. The Exchange further
represents that the allocation
methodology will be fixed once the
Exchange migrates to the INET platform.
The Commission believes that waiving
the 30-day operative delay is consistent
with the protection of investors and the
public interest. Therefore, the
7 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b4(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.
9 17 CFR 240.19b–4(f)(6)(iii).
8 17
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28717
Commission designates the proposed
rule change operative upon filing.10
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) 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–
MRX–2017–07 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–MRX–2017–07. 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 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
E:\FR\FM\23JNN1.SGM
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28718
Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices
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–MRX–
2017–07 and should be submitted on or
before July 14, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–13096 Filed 6–22–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80969; File No. SR–BOX–
2017–21]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
the Fee Schedule To Make Several
Non-Substantive Changes
June 19, 2017.
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 June 7,
2017, BOX Options Exchange LLC (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
from interested persons.
asabaliauskas on DSKBBXCHB2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Fee Schedule to make several nonsubstantive changes. The text of the
proposed rule change is available from
the principal office of the Exchange, at
the Commission’s Public Reference
Room and also on the Exchange’s
Internet Web site at https://
boxexchange.com.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
public interest. As such, BOX believes
the proposed rule change is in the
public interest, and therefore, consistent
with the Act.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
1. Purpose
The Exchange proposes to make
certain clarifying and non-substantive
changes to its fee schedule in order to
improve formatting and increase overall
readability. The Exchange notes that
these changes are purely clerical and do
not substantively amend any fee or
rebate, nor do they alter the manner in
which the Exchange assesses fees or
calculates rebates. The proposed
changes are simply intended to increase
overall readability and improve
formatting. Specifically, the Exchange
proposes to add a title page and table of
contents page to the fee schedule.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,3
in general, and Section 6(b)(5) of the
Act,4 in particular, in that the proposed
change is designed to promote just and
equitable principles of trade, remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general protect investors and the public
interest, by increasing the readability of
BOX’s Fee Schedule. Further, the
Exchange notes that the proposed
changes do not substantively amend any
fee or rebate, nor do they alter the
manner in which the Exchange assesses
fees or calculates rebates. Finally, the
Exchange believes that the proposed
changes will make the fee schedule
clearer and eliminate investor
confusion, thereby removing
impediments to and perfecting the
mechanism of a free and open market
and a national market system, and, in
general, protecting investors and the
11 17
1 15
VerDate Sep<11>2014
19:21 Jun 22, 2017
3 15
4 15
Jkt 241001
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00101
Fmt 4703
Sfmt 4703
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. The
Exchange believes that the proposed
change will not impose a burden on
competition, as the changes are purely
clerical and do not amend any fee or
rebate within the BOX Fee Schedule.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not (i) significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 5 and Rule 19b–
4(f)(6) thereunder.6
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 7 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 8
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, which the Exchange states would
immediately add clarity to the Fee
Schedule. The Commission notes that
the proposed rule change merely adopts
a table of contents and makes formatting
changes that are designed to increase
overall readability of the fee schedule
5 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.
7 17 CFR 240.19b–4(f)(6).
8 17 CFR 240.19b–4(f)(6)(iii).
6 17
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Agencies
[Federal Register Volume 82, Number 120 (Friday, June 23, 2017)]
[Notices]
[Pages 28716-28718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13096]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80965; File No. SR-MRX-2017-07]
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Chapter 19
June 19, 2017.
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 June 6, 2017, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed with
the Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to 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 proposes to amend Chapter 19 to notify members of a
systems issue related to allocations made pursuant to Supplementary
Material .02(a)-(b) to Rule 1901.
The text of the proposed rule change is available on the Exchange's
Web site at www.ise.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 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 amend Chapter 19 to
notify members of a systems issue related to allocations made pursuant
to Supplementary Material .02(a)-(b) to Rule 1901 (``Flash auction'').
Pursuant to Supplementary Material .02 to Rule 1901, when the automatic
execution of an incoming order would result in an impermissible Trade
Through,\3\ such order is exposed at the current national best bid or
offer (``NBBO'') to all members, and members are given an opportunity
to enter responses up to the size of the order being exposed.
Supplementary Material .02(a)-(b) to Rule 1901 provides that interest
executed in the Flash auction is allocated in price priority, and, at
the same price, Priority Customer orders will be executed first in time
priority and then all other interest (orders, quotes, and responses)
will be allocated pro-rata based on size. Currently, however, the
system is erroneously providing the Primary Market Maker (``PMM'') an
enhanced allocation after Priority Customer Orders on the book, and
ahead of Responses, Professional Orders, and other market maker quotes.
Specifically, the PMM is being erroneously given participation rights
in a Flash auction pursuant to Supplementary Material .01(b)-(c) to
Rule 713, which results in the PMM receiving a potentially larger share
of the order to be executed. That is, if the PMM is quoting at the best
price and the conditions in Supplementary Material .01(b)-(c) to Rule
713 are satisfied, the PMM is given participation rights equal to the
greater of (i) the proportion of the total size at the best price
represented by the size of its quote, or (ii) sixty percent (60%) of
the contracts to be allocated if there is only one (1) other
Professional Order or market maker quotation at the best price, forty
percent (40%) if there are two (2) other Professional Orders and/or
market maker quotes at the best price, and thirty percent (30%) if
there are more than two (2) other Professional Orders and/or market
maker quotes at the best price. Alternatively, orders for five (5)
contracts or fewer will be executed first by the PMM, if he is present
at that price.
---------------------------------------------------------------------------
\3\ ``Trade-Through'' means a transaction in an option series at
a price that is lower than a Protected Bid or higher than a
Protected Offer. See Rule 1900(q).
---------------------------------------------------------------------------
This enhanced allocation was intended for the PMM when orders are
allocated in the regular market, and not for the allocation of an order
exposed pursuant to Supplementary Material .02 to Rule 1901 (i.e., the
Flash auction). The Exchange has notified members and the Commission of
this systems issue pursuant to Regulation SCI. The purpose of the
proposed rule change is to provide additional notification to members
by noting in Chapter 19 of the Exchange's rulebook the discrepancy
between the allocation described in the rule and the allocation
currently being given by the Exchange's trading system. The Exchange is
currently migrating its trading system to the Nasdaq INET architecture,
and the allocation issue will be resolved as symbols start trading on
INET in Q3 2017. In the interim, the Exchange proposes to add language
to Chapter 19 to notify members that until such time as symbols are
migrated to INET, Flash auction allocations pursuant to Supplementary
Material .02(a)-(b) to Rule 1901 will not be provided as described in
that rule. Instead, PMM quotes will be given a Flash auction allocation
pursuant to Supplementary Material .01(b)-(c) to Rule 713 after
Priority Customer Orders on the book, and ahead of Responses,
Professional Orders, and other market maker quotes, until such time as
symbols are migrated to the INET trading system. The Exchange believes
that this language will reduce member confusion regarding how
allocations will be processed prior to the resolution of this systems
issue.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of Section 6(b) of the Act.\4\
[[Page 28717]]
In particular, the proposal is consistent with Section 6(b)(5) of the
Act,\5\ because is designed to promote just and equitable principles of
trade, 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.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change is consistent
with the protection of investors and the public interest because the
proposed rule language more accurately reflects the way contracts will
be allocated in the Flash auction until the systems issue is resolved.
Due to a systems issue, allocations in the Flash auction do not take
place in the manner described in Supplementary Material .02(a)-(b) to
Rule 1901. The proposed rule change makes this clear in the Exchange's
rules, and supplements notifications given to members and the
Commission pursuant to Regulation SCI. While the Exchange intends to
allocate contracts in the Flash auction as described in Supplementary
Material .02(a)-(b) to Rule 1901, the Exchange is taking this temporary
measure to ensure that members are properly notified of the current
system behavior. The proposed rule change does not make any permanent
changes to the Exchange's treatment of Flash auction allocations, which
will be processed correctly when the Exchange migrates its trading
system to INET in Q3 2017. The Exchange believes that the proposed rule
change will promote just and equitable principles of trade since it is
a temporary change, and is designed solely to provide additional
notification and clarity to members of the Flash auction allocation
issue. The Exchange intends to amend the manner in which the system
operates to conform to the current rule text as symbols migrate to INET
in Q3 2017.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\6\ the Exchange does
not believe that the proposed rule change will impose any burden on
intermarket or intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
rule change is designed to more accurately reflect the way the trading
system allocates contracts in the Flash auction today, and is not
intended to be a permanent rule of the Exchange. The Flash auction
allocation will be corrected with the migration of the Exchange to INET
technology, and the proposed rule change is being filed solely to
provide additional notice to members in the interim. The proposed rule
change is therefore not designed to impose any significant burden on
competition.
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\6\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or 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 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)(iii) of the Act \7\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 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) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) \9\ permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. In its filing with the Commission, the Exchange
requests that the Commission waive the 30-day operative delay. The
Exchange represents that it filed the proposed rule change to provide
additional notice to members concerning the current handling of orders
and quotes executed in a Flash auction, and that waiver of the
operative delay is consistent with the protection of investors and the
public interest as it will allow the Exchange to immediately reflect in
its rules the allocation methodology currently in place for Flash
auctions. The Exchange further represents that the allocation
methodology will be fixed once the Exchange migrates to the INET
platform. The Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest. Therefore, the Commission designates the proposed rule change
operative upon filing.\10\
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\9\ 17 CFR 240.19b-4(f)(6)(iii).
\10\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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-MRX-2017-07 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-MRX-2017-07. 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
[[Page 28718]]
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-MRX-2017-07 and should be
submitted on or before July 14, 2017.
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\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-13096 Filed 6-22-17; 8:45 am]
BILLING CODE 8011-01-P