Self-Regulatory Organizations; Nasdaq MRX, LLC; Order Approving Proposed Rule Change To Amend Various Rules in Connection With a System Migration to Nasdaq INET Technology, 35557-35562 [2017-15994]

Download as PDF Federal Register / Vol. 82, No. 145 / Monday, July 31, 2017 / Notices 10. Abstract: NRC Form 5 is used to record and report the results of individual monitoring for occupational radiation exposure during a monitoring period (one calendar year) to ensure regulatory compliance with annual radiation dose limits specified in 10 CFR 20.1201. Dated at Rockville, Maryland, this 25th day of July, 2017. For the Nuclear Regulatory Commission. David Cullison, NRC Clearance Officer, Office of the Chief Information Officer. [FR Doc. 2017–16035 Filed 7–28–17; 8:45 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81201; File No. SR– NYSEArca-2017–06] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 2, Relating to the Listing and Trading of Shares of the Bitcoin Investment Trust Under NYSE Arca Equities Rule 8.201 sradovich on DSKBCFCHB2PROD with NOTICES July 25, 2017. On January 25, 2017, NYSE Arca, Inc. (‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade shares of the Bitcoin Investment Trust under NYSE Arca Equities Rule 8.201. The proposed rule change was published for comment in the Federal Register on February 9, 2017.3 On March 22, 2017, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to approve or disapprove the proposed rule change.5 On April 6, 2017, the Exchange filed Amendment No. 1 to the proposed rule change. On April 27, 2017, the Commission published notice of Amendment No. 1 and instituted 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 79955 (Feb. 3, 2017), 82 FR 10086 (Feb. 9, 2017). 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 80297 (Mar. 22, 2017), 82 FR 15408 (Mar. 28, 2017). 2 17 VerDate Sep<11>2014 17:38 Jul 28, 2017 Jkt 241001 proceedings to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 1.6 On May 11, 2017, the Exchange filed Amendment No. 2 to the proposed rule change, and on May 25, 2017, the Commission published notice of Amendment No. 2.7 The Commission has received fourteen comment letters on the proposed rule change.8 Section 19(b)(2) of the Act 9 provides that, after initiating disapproval proceedings, the Commission shall issue an order approving or disapproving the proposed rule change not later than 180 days after the date of publication of notice of filing of the proposed rule change. The Commission may extend the period for issuing an order approving or disapproving the proposed rule change by not more than 60 days if the Commission determines that a longer period is appropriate and publishes the reasons for such determination. The proposed rule change was published for notice and comment in the Federal Register on February 9, 2017. August 8, 2017 is 180 days from that date, and October 7, 2017 is 240 days from that date. The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,10 designates October 7, 2017 as the date by which the Commission shall either approve or disapprove the proposed rule change (File No. SR–NYSEArca–2017–06). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–15992 Filed 7–28–17; 8:45 am] BILLING CODE 8011–01–P 6 See Securities Exchange Act Release No. 80502 (Apr. 21, 2017), 82 FR 19398 (Apr. 27, 2017). Specifically, the Commission instituted proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’’ and ‘‘to protect investors and the public interest.’’ See id. at 19411–12. 7 See Securities Exchange Act Release No. 80729 (May 19, 2017), 82 FR 24185 (May 25, 2017). 8 All comments on the proposed rule change are available on the Commission’s Web site at: https:// www.sec.gov/comments/sr-nysearca-2017-06/ nysearca201706.htm. 9 15 U.S.C. 78s(b)(2). 10 Id. 11 17 CFR 200.30–3(a)(57). PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 35557 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81204; File No. SR–MRX– 2017–02] Self-Regulatory Organizations; Nasdaq MRX, LLC; Order Approving Proposed Rule Change To Amend Various Rules in Connection With a System Migration to Nasdaq INET Technology July 25, 2017. I. Introduction On May 17, 2017, the Nasdaq MRX, LLC (‘‘MRX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a proposed rule change to amend various Exchange rules in connection with a system migration to Nasdaq, Inc. (‘‘Nasdaq’’) supported technology. The proposed rule change was published for comment in the Federal Register on June 5, 2017.3 On July 14, 2017, the Commission designated a longer period for Commission action on the proposed rule change, until September 3, 2017.4 The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change. II. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.5 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,6 which requires, among other things, that the rules of a national securities exchange 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 80815 (May 30, 2017), 82 FR 25827 (‘‘Notice’’). 4 See Securities Exchange Act Release No. 81151 (July 14, 2017, 82 FR 33527 (July 20, 2017). 5 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(5). 2 17 E:\FR\FM\31JYN1.SGM 31JYN1 35558 Federal Register / Vol. 82, No. 145 / Monday, July 31, 2017 / Notices general, to protect investors and the public interest. As noted above, the Commission received no comment letters regarding the proposed rule change. The Exchange proposes to amend various Exchange rules to reflect the MRX system migration to a Nasdaq INET technology.7 In connection this system migration, as discussed below, the Exchange intends to adopt certain trading functionality currently utilized on Nasdaq Exchanges.8 A. Trading Halts sradovich on DSKBCFCHB2PROD with NOTICES 1. Cancellation of Quotes The Exchange proposes to amend MRX Rule 702 (Trading Halts) to conform the treatment of orders and quotes on the Exchange to Phlx Rule 1047(f). Specifically, the Exchange proposes to amend Rule 702(a)(2) to provide that during a halt the Exchange will maintain existing orders on the book but not existing quotes. Pursuant to the revision, during the halt, the Exchange will accept orders and quotes and, for such orders and quotes, process cancels and modifications. Currently, the Exchange maintains existing orders and quotes during a trading halt. With respect to cancels and modifications during a trading halt, the Exchange represents that the current process on MRX will not change under the proposed rule change.9 The Exchange represents that its proposal to maintain existing orders on 7 INET is utilized across Nasdaq’s markets, including The NASDAQ Options Market LLC (‘‘NOM’’), NASDAQ PHLX LLC (‘‘Phlx’’), and NASDAQ BX, Inc. (collectively, the ‘‘Nasdaq Exchanges’’). See Notice, supra note 3, at 25827. The Commission also recently approved Nasdaq ISE, LLC’s (formerly International Securities Exchange, LLC) (‘‘ISE’’) and Nasdaq GEMX, LLC’s (formerly ISE Gemini, LLC) migrations to INET. See Securities Exchange Act Release Nos. 80225 (March 13, 2017), 82 FR 14243 (March 17, 2017) (SR–ISE– 2017–02); 80432 (April 11, 2017), 82 FR 18191 (April 17, 2017) (SR–ISE–2017–03); 80011 (February 10, 2017), 82 FR 10927 (February 16, 2017) (SR–ISEGemini–2016–17); 80014 (February 10, 2017), 82 FR 10952 (February 16, 2017) (SR– ISEGemini–2016–18). 8 See Notice, supra note 3, at 25827. The Exchange anticipates that it will begin implementation of the proposed rule changes in the third quarter of 2017. See id. According to the Exchange, the system migration will be on a symbol by symbol basis. The Exchange will issue an alert to members in the form of an Options Trader Alert to provide notification of the symbols that will migrate and the relevant dates. See id. The Exchange has also separately filed a companion proposed rule change to amend the Exchange’s opening process in connection with the system migration to INET technology. See Securities Exchange Act Release No. 80937 (June 15, 2017), 82 FR 28113 (June 20, 2017) (SR–MRX–2017–01). The Exchange proposes to replace its current opening process at Rule 701 with Phlx’s opening process. See Phlx Rule 1017. 9 See Notice, supra note 3, at 25827. VerDate Sep<11>2014 17:38 Jul 28, 2017 Jkt 241001 the book but not existing quotes during a halt would provide market participants with clarity as to the manner in which interests will be handled by the system.10 The Exchange believes that, during a trading halt, the market may move and create risk to market participants with respect to resting interests.11 The Commission believes that that cancelling existing quotes during a trading halt would provide market participants the opportunity to update potentially stale quotes. Further, the Commission notes that the Exchange will process cancels and modifications for orders as well as quotes received during a halt. Finally, the Commission further notes that the proposed treatment of quotes during a halt is consistent with existing Phlx Rule 1047(f). 2. Limit Up-Limit Down The Exchange proposes to replace existing MRX Rule 703A (Trading During Limit Up-Limit Down States in Underlying Securities) with proposed MRX Rule 702(d).12 Specifically, proposed MRX Rule 702(d) will provide that during a Limit State and Straddle State in the underlying NMS stock 13 the Exchange will not open an affected option.14 However, provided the Exchange has opened an affected option for trading, the Exchange will: (i) Reject Market Orders 15 and notify members of the reason for such rejection; 16 (ii) continue to process Market Orders exposed at the NBBO, pursuant to Supplementary Material .02 to ISE Rule 1901, pending in the system, and cancel such Market Order if at the end of the exposure period the affected underlying is in a Limit or Straddle State; 17 and Notice, supra note 3, at 25834. id. 12 The Exchange represents that proposed MRX Rule 702(d) is similar to Phlx Rule 1047(d). See Notice, supra note 3, at 25828. 13 Proposed MRX Rule 702(d) states that capitalized terms used in Rule 702(d) will have the same meaning as provided for in the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS, as it may be amended from time to time. 14 See proposed MRX Rule 702(d)(1). The Exchange states that its rules do not currently address the opening rotation in the event that the underlying NMS stock is open but has entered into a Limit or Straddle State. See Notice, supra note 3, at 25828. 15 For the definition of the term ‘‘Market Orders,’’ see MRX Rule 715(a). 16 See proposed MRX Rule 702(d)(2). 17 See proposed MRX Rule 702(d)(2). If the affected underlying is no longer in a Limit or Straddle State after the exposure period, the Market Order will be processed with normal handling. See id. The Exchange currently cancels Market Orders pending in the system upon initiation of a Limit or Straddle State. See Notice, supra note 3, at 25828. PO 00000 10 See 11 See Frm 00052 Fmt 4703 Sfmt 4703 (iii) elect Stop Orders if the condition as provided in MRX Rule 715(d) is met, and, because such orders become Market Orders, cancel them back and notify members of the reason for such rejection.18 Moreover, when the security underlying an option class is in a Limit State or Straddle State, the Exchange will suspend the maximum quotation spread requirements for market maker quotes in MRX Rule 803(b)(4) and the continuous quotation requirements in MRX Rule 804(e).19 Additionally, the Exchange will not consider the time periods associated with Limit States and Straddle States when evaluating whether a market maker has complied with its continuous quotation requirements in MRX Rule 804(e).20 The Commission believes that the proposed Rule 702(d) would provide certainty to market participants regarding the manner in which Limit or Straddle States would impact the opening process as well as Market Orders and Stop Orders. The Commission believes that the rejection of Market Orders (including elected Stop Orders) is reasonably designed to potentially prevent executions of unpriced orders during times of significant volatility.21 The Commission also notes that processing rather than cancelling existing Market Orders is reasonable because these Market Orders are only pending in the system if they are exposed at the NBBO pursuant to Supplementary Material .02 to ISE Rule 1901 and would, in any case, be cancelled if at the end of the exposure period the affected underlying is still in a Limit or Straddle State.22 Further, the Commission believes that it is reasonable to permit the election of Stop Orders that are pending in the system during a Limit or Straddle State, since, upon election, the orders would be cancelled back to the members.23 Lastly, the Commission notes that proposed MRX Rule 702(d)(4) is substantively identical to existing MRX Rule 703A(c), which is being deleted. 18 See proposed MRX Rule 702(d)(3). MRX currently does not elect Stop Orders that are pending in the system during a Limit or Straddle State. Under the proposal, the Exchange will elect Stop Orders that are pending in the system during a Limit or Straddle State, if conditions for such election are met; however, because such orders become Market Orders, they will be cancelled back to the member with a reason for such rejection. See Notice, supra note 3, at 25828. 19 See proposed MRX Rule 702(d)(4). 20 See id. 21 See Notice, supra note 3, at 25834. 22 See Notice, supra note 3, at 25835. 23 See id. E:\FR\FM\31JYN1.SGM 31JYN1 Federal Register / Vol. 82, No. 145 / Monday, July 31, 2017 / Notices 3. Auction Handling During a Trading Halt The Exchange proposes to amend certain rules to account for the impact of a trading halt on the Exchange’s auction mechanisms. First, the Exchange proposes to amend MRX Rule 723 (Price Improvement Mechanism for Crossing Transactions) regarding the manner in which a trading halt will impact an order entered into the Price Improvement Mechanism (‘‘PIM’’). Today, if a trading halt is initiated after an order is entered into the PIM, the Exchange terminates such auction and eligible interest is executed.24 The Exchange proposes to amend the current process by terminating the auction and not executing eligible interest when a trading halt occurs.25 Similarly, the Exchange also proposes to amend to MRX Rule 716 (Block Trades) to state that, if a trading halt is initiated after an order is entered into the Block Order Mechanism, Facilitation Mechanism, or Solicited Order Mechanism, the Exchange will automatically terminate such auction without execution.26 The Exchange believes that its proposal to terminate the PIM auction, Block Order Mechanism, Facilitation Mechanism, and Solicited Order Mechanism and not execute eligible interest when a trading halt occurs will provide certainty to participants regarding how their interest will be handled.27 The Exchange believes that, during a trading halt, the market may move and create risk to market participants with respect to resting interest.28 The Commission believes that the proposed rule is consistent with the Act and provides transparency and clarity regarding the handling of these orders during a trading halt. B. Market Order Spread Protection The Exchange proposes to amend MRX Rule 711 (Acceptance of Quotes and Orders) by adopting a new mandatory risk protection entitled Market Order Spread Protection which will apply to Market Orders.29 Pursuant to proposed MRX Rule 711(c), if the NBBO is wider than a preset threshold 24 See Notice, supra note 3, at 25829. proposed MRX Rule 723(d)(5). 26 See proposed subsections (c)(3), (d)(3)(iv), and (e)(2)(iv) of MRX Rule 716. The Exchange represents that this proposed amendment represents the current process on MRX and is generally consistent with Phlx Rule 1047(c). See Notice, supra note 3, at 25829. 27 See Notice, supra note 3, at 25835. 28 See id. 29 The Exchange states that this mandatory feature is currently offered on NOM to protect Market Orders from being executed in very wide markets. See Notice, supra note 3, at 25829. See also NOM Rules at Chapter VI, Section 6(c). sradovich on DSKBCFCHB2PROD with NOTICES 25 See VerDate Sep<11>2014 17:38 Jul 28, 2017 Jkt 241001 at the time a Market Order is received by the Exchange, the Exchange will reject the order. The Exchange will notify members of the threshold with a notice, and, thereafter, will notify members of any subsequent changes to the threshold.30 The Exchange represents that the Market Order Spread Protection will be the same for all options traded on the Exchange and is applicable to all members that submit Market Orders.31 The Exchange believes, and the Commission concurs, that the proposed Market Order Spread Protection would help mitigate risks associated with trading errors and help reduce the number of executions at dislocated prices.32 The Commission also notes that the protection is similar to a mandatory feature currently offered on NOM.33 C. Acceptable Trade Range Today, MRX offers a Price Level Protection that places a limit on the number of price levels at which an incoming order or quote to sell (buy) would be executed automatically when there are no bids (offers) from other exchanges at any price for the options series.34 The Exchange proposes to replace the current Price Level Protection with Phlx’s Acceptable Trade Range.35 The Exchange states that the proposed Acceptable Trade Range is a mechanism designed to prevent the system from experiencing dramatic price swings by preventing the market from moving beyond set thresholds.36 The system will calculate an Acceptable Trade Range to limit the range of prices at which an order or quote will be allowed to execute.37 Upon receipt of a 30 See Notice, supra note 3, at 25829. The Exchange proposes to initially set the threshold to $5, similar to the threshold set on NOM. See id. The Exchange states that NOM set the differential at $5 to match the maximum bid/ask differential permitted for quotes on that exchange. See id. MRX also uses a similar $5 differential. See id. 31 See Notice, supra note 3, at 25829. 32 See Notice, supra note 3, at 25835. 33 See NOM Rules at Chapter VI, Section 6(c). 34 See Notice, supra note 3, at 25829; MRX Rule 714(b)(1). 35 See Phlx Rule 1080(p). Unlike Phlx, MRX does not offer a general continuous re-pricing mechanism. See id. Accordingly, the Exchange states that the proposed Acceptable Trade Range will not include the posting period functionality available today on Phlx. See Notice, supra note 3, at 25830, n.15. The Exchange will not post interest that exceeds the outer limit of the Acceptable Trade Range; rather the interest will be cancelled. See Notice, supra note 3, at 25830. Orders that do not exceed the outer limit of the Acceptable Trade Range will post to the order book and will reside on the order book at such price until they are either executed in full or cancelled by the member. See id. 36 See Notice, supra note 3, at 25830. 37 See proposed MRX Rule 714(b)(1)(i). PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 35559 new order or quote, the Acceptable Trade Range is calculated by taking the reference price, plus or minus a value to be determined by the Exchange, where the reference price is the National Best Bid (‘‘NBB’’) for sell orders/quotes and the National Best Offer (‘‘NBO’’) for buy orders/quotes. Accordingly, the Acceptable Trade Range is: the reference price ¥ (x) for sell orders/quotes; and the reference price + (x) for buy orders.38 If an order or quote reaches the outer limit of the Acceptable Trade Range (the ‘‘Threshold Price’’) without being fully executed, then any unexecuted balance will be cancelled.39 The Acceptable Trade Range will not be available for All-or-None Orders.40 The Exchange represents that it will set the Acceptable Trade Range at levels to ensure that it is triggered infrequently.41 While the Acceptable Trade Range settings will be tied to the option premium, other factors will be considered when determining the exact settings.42 For example, the Exchange states that acceptable ranges may change if market-wide volatility is high or if overall market liquidity is low based on historical trends.43 To ensure a wellfunctioning market, the Exchange believes that different market conditions may require adjustments to the threshold amounts from time to time.44 Further, while the Acceptable Trade Range settings will generally be the same across all options traded on the Exchange, MRX proposes to set them separately based on characteristics of the underlying security.45 For example, the Exchange has generally observed that options subject to the Penny Pilot program quote with tighter spreads than options not subject to the Penny Pilot. Accordingly, the Exchange will set Acceptable Trade Ranges for three categories of options: (1) Penny Pilot Options trading in one cent increments for options trading at less than $3.00 and increments of five cents for options trading at $3.00 or more; (2) Penny Pilot 38 The Exchange states that the Acceptable Trade Range settings are tied to the option premium. See Notice, supra note 3, at 25830, n.16. A table consisting of several steps based on the premium of an option will be displayed on the Exchange Web site and used to determine how far the market for a given option will be allowed to move. See Notice, supra note 3, at 25831. Updates to the table would be announced via an Exchange alert, generally the prior day. See id. 39 See proposed MRX Rule 714(b)(1)(ii). 40 See proposed MRX Rule 714(b)(1)(ii). Today, MRX’s Price Level Protection rule is also not available for All-or-None Orders. See Notice, supra note 3, at 25830, n.17. 41 See Notice, supra note 3, at 25830. 42 See Notice, supra note 3, at 25831. 43 See id. 44 See id. 45 See id. E:\FR\FM\31JYN1.SGM 31JYN1 35560 Federal Register / Vol. 82, No. 145 / Monday, July 31, 2017 / Notices Options trading in one-cent increments for all prices; and (3) Non-Penny Pilot Options.46 The Exchange represents that the Acceptable Trade Range should prevent the system from experiencing dramatic price swings by preventing the market from moving beyond set thresholds.47 The Commission believes that the Acceptable Trade Range is reasonably designed to prevent executions of orders and quotes at prices that are significantly worse than the NBBO at the time of an order’s submission and may reduce the potential negative impacts of unanticipated volatility in individual options. Further, the Commission notes that the proposed Acceptable Trade Range is similar to an existing mechanism on Phlx.48 D. PMM Order Handling and Opening Obligations The Exchange proposes to eliminate the Primary Market Maker (‘‘PMM’’) order handling and opening obligations in MRX Rule 803(c).49 As described above, with the migration of MRX to the Nasdaq INET architecture, the Exchange is adopting the Acceptable Trade Range and opening rotation functionality currently offered on NOM and Phlx, which do not contain similar requirements for the PMMs as in MRX Rule 803(c). The Exchange represents that PMMs’ current obligations are no longer necessary due to the introduction of the Acceptable Trade Range and proposed changes to the Exchange’s opening process.50 The Exchange states that its proposal to conform the Exchange’s opening process to Phlx Rule 1017 will result in an opening initiated by the receipt of an appropriate number of valid width quotes by the PMM or Competitive Market Maker, instead of an opening process initiated by a 46 See proposed MRX Rule 714(b)(1)(iii). Notice, supra note 3, at 25835. 48 See Notice, supra note 3, at 25829; Phlx Rule 1080(p). 49 MRX Rule 803(c) provides that, in addition to the obligations contained in Rule 803 for market makers generally, for options classes to which a market maker is the appointed PMM, the PMM shall have the responsibility to: (1) As soon as practical, address Priority Customer Orders that are not automatically executed pursuant to Rule 714(b)(1) in a manner consistent with its obligations under Rule 803(b) by either (i) executing all or a portion of the order at a price that at least matches the NBBO and that improves upon the Exchange’s best bid (in the case of a sell order) or the Exchange’s best offer (in the case of a buy order); or (ii) releasing all or a portion of the order for execution against bids and offers on the Exchange; and (2) initiate trading in each series pursuant to Rule 701 (Trading Rotations). 50 See Notice, supra note 3, at 25832. See also supra note 8. sradovich on DSKBCFCHB2PROD with NOTICES 47 See VerDate Sep<11>2014 17:38 Jul 28, 2017 Jkt 241001 PMM.51 Similarly, the Exchange believes the proposed Acceptable Trade Range functionality will continue to provide order protection to members without imposing any PMM obligations.52 The Exchange further represents that NOM and Phlx do not impose similar PMM order handling and opening obligations.53 Accordingly, the Commission believes that these changes are consistent with the Act. E. Back-Up PMM The Exchange proposes to amend Supplementary Material .03 to MRX Rule 803 to eliminate Back-Up PMMs. Today, any MRX member that is approved to act in the capacity of a PMM or an ‘‘Alternative Primary Market Maker’’ may voluntarily act as a BackUp PMM in an options series in which it is quoting as a Competitive Market Maker (‘‘CMM’’).54 With the technology migration, the Exchange believes that a Back-Up PMM is no longer necessary because under INET the Exchange will not utilize the order handling obligations present on the Exchange today.55 The Exchange further represents that the proposed new opening process obviates the importance of such a role because it would no longer rely on a market maker to initiate the opening process.56 Accordingly, the Commission believes that these changes are consistent with the Act. F. Market Maker Speed Bump The Exchange proposes to amend MRX Rule 804 (Market Maker Quotations) to establish default parameters for certain risk functionality. The Exchange currently offers a risk protection mechanism for market maker quotes that removes a member’s quotes in an options class if a specified number of curtailment events occur during a set time period (‘‘Market Maker Speed Bump’’).57 In addition, the Exchange offers a market-wide risk protection that removes a market maker’s quotes across all classes if a number of curtailment events occur (‘‘Market-Wide Speed Bump’’).58 MRX Rule 804(g) currently requires that market makers set curtailment parameters for both the 51 See Notice, supra note 3, at 25831–32. See also supra note 8. 52 See Notice, supra note 3, at 25832. The Exchange states that Phlx does not currently have similar roles for a Specialist on its market. See id. 53 See Notice, supra note 3, at 25831. 54 See MRX Rule 803, Supplementary Material .03. 55 See Notice, supra note 3, at 25832. 56 See Notice, supra note 3, at 25832. See also supra note 8. 57 See MRX Rule 804(g)(1). 58 See MRX Rule 804(g)(2). PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 Market Maker Speed Bump and the Market-Wide Speed Bump. Today, if a market maker does not set these parameters, for each Market Maker Speed Bump and the Market-Wide Speed Bump, the system rejects their quotes.59 With the technology migration, the Exchange proposes to provide default curtailment parameters, which will be determined by the Exchange and announced to members.60 The Commission believes that this change is consistent with the Act and notes that, although the Exchange will establish default curtailment settings, market makers will have discretion to set different curtailment settings appropriate for their trading and risk tolerance. G. Anti-Internalization The Exchange proposes to amend Supplementary Material .03 to MRX Rule 804 (Market Maker Quotations) to adopt an anti-internalization rule. Today, MRX’s functionality prevents Immediate-or-Cancel orders entered by a market maker from trading with the market maker’s own quote.61 The Exchange proposes to replace this selftrade protection with antiinternalization functionality currently offered on Phlx.62 The Exchange proposes to provide that quotes and orders entered by market makers using the same member identifier will not be executed against quotes and orders entered on the opposite side of the market by the same market maker using the same member identifier. In such a case, the system will cancel the resting quote or order back to the entering party prior to execution. The proposed antiinternalization functionality will not apply in any auction. The Exchange states that this proposed functionality does not modify the duty of best execution owed to public customer orders.63 The Exchange represents that the proposal is designed to assist market makers in reducing trading costs from unwanted executions potentially resulting from the interaction of executable interest from the same firm performing the same market making function.64 The Commission believes that the proposed rule is reasonably designed to prevent the unwanted execution of quotes and orders entered 59 See Notice, supra note 3, at 25832. id. 61 See id. 62 See Phlx Rule 1080(p)(2). 63 See Notice, supra note 3, at 25833. 64 See Notice, supra note 3, at 25833, n.33. 60 See E:\FR\FM\31JYN1.SGM 31JYN1 Federal Register / Vol. 82, No. 145 / Monday, July 31, 2017 / Notices by market makers using the same member identifier. H. Minimum Execution Quantity Orders The Exchange proposes to amend MRX Rule 715 (Types of Orders) to remove minimum quantity orders in subpart (q).65 The Exchange states that members have not adopted this feature, and therefore proposes to remove this order type.66 Furthermore, the Exchange proposes to remove two references to minimum quantity orders in Supplementary Material .02 to MRX Rule 713 and in Supplementary Material .04 to MRX Rule 717. The Exchange states that removing the minimum quantity order type would simplify functionality available on the Exchange and reduce the complexity of its order types.67 The Exchange further represents that members have not adopted this feature.68 Accordingly, the Commission believes it is appropriate for the Exchange to remove references to the minimum quantity order type. sradovich on DSKBCFCHB2PROD with NOTICES I. Cancel and Replace Orders The Exchange proposes to amend Supplementary Material .02 to MRX Rule 715 (Types of Orders) to memorialize how the Exchange system will handle cancel and replace orders in connection with the Exchange’s technology migration to INET.69 Currently, Exchange members can send a Cancel and Replace Order in one message, which allows the replacement order to retain the time priority of the cancelled order, subject to certain exceptions.70 However, currently the Exchange does not apply price or other reasonability checks to the replacement order for all Cancel and Replace Orders.71 For example, the Exchange notes that currently, a Cancel and Replace Order which reduced the size of an original order from 600 to 300 65 A Minimum Quantity Order is an order that is initially available for partial execution only for a specified number of contracts or greater. A member may specify whether any subsequent executions of the order must also be for the specified number of contracts or greater, or if the balance may be executed as a regular order. If all executions are to be for the specified number of contracts or greater and the balance of the order after one or more partial execution(s) is less than the minimum, such balance is treated as all-or-none. See MRX Rule 715(q). 66 See Notice, supra note 3, at 25833. 67 See Notice, supra note 3, at 25836. 68 See Notice, supra note 3, at 25833. 69 See id. 70 See id. The Exchange notes that, instead of sending a Cancel and Replace Order, a Member can separately send a cancellation message and a new order, for which the Exchange would apply price or other reasonability checks, but the new order would not retain the priority of the original order. See id. This behavior will not change. See id. 71 See Notice, supra note 3, at 25833. VerDate Sep<11>2014 17:38 Jul 28, 2017 Jkt 241001 contracts would not be subject to price or other reasonability checks.72 The Exchange now proposes to define the Cancel and Replace Order to ensure that price and other reasonability checks are applied to Cancel and Replace Orders.73 The Exchange proposes to define a Cancel and Replace Order as a single message for the immediate cancellation of a previously received order and the replacement of that order with a new order. If the previously placed order is already partially filled or in its entirety, the replacement order is automatically canceled or reduced by the number of contracts that were executed. Additionally, the replacement order will retain the priority of the cancelled order, if the order posts to the order book, provided the price is not amended, size is not increased, or in the case of Reserve Orders, size is not changed. However, if the replacement portion of a Cancel and Replace Order does not satisfy the system’s price or other reasonability checks the existing order will be cancelled and not replaced.74 The Exchange represents that conducting price or other reasonability checks for all Cancel and Replace Orders will validate orders against current market conditions prior to proceeding with the request to modify the order.75 The Exchange further believes that memorializing Cancel and Replace Order handling will add transparency to the Exchange’s rules and reduce the potential for investor confusion.76 The Commission notes that other exchanges with a similar order type permit an order to retain priority if only the size of the order is decremented.77 Accordingly, the Commission believes it is appropriate for the Exchange to define Cancel and Replace Orders in the manner proposed. J. All-Or-None Orders The Exchange proposes to amend MRX Rule 715(c) to provide that All-Orid. proposed MRX Rule 715, Supplementary Material .02. 74 Price and reasonability checks that would be applied include MRX Rule 710 (Minimum Trading Increments), MRX Rule 711(c) (proposed Market Order Spread Protection) and MRX Rule 714(b)(2) (Limit Order Price Protection). See Notice, supra note 3 at 25833, n.40. The Exchange also notes that, as for other orders, the Exchange may cancel an order because it does not satisfy a format or other requirement specified in the Exchange’s rules and specifications. See id. 75 See Notice, supra note 3 at 25836. 76 See id. 77 See id.; see Phlx Rule 1080(b)(i)(A). PO 00000 72 See 73 See Frm 00055 Fmt 4703 Sfmt 4703 35561 None Orders78 may only be entered into the Exchange’s system with a time-inforce designation of Immediate-OrCancel.79 Currently, the Exchange allows users to submit All-Or-None Orders with any time-in-force designation. As proposed, an All-OrNone Order would be required to be submitted as an Immediate-Or-Cancel Order and thus will either execute in its entirety or be cancelled. Because All-OrNone Orders will either be executed or cancelled, the Exchange also proposes to remove language stating that All-OrNone Orders can be maintained in the system in Supplementary Material .02 to MRX Rule 713 and to delete Supplementary Material .04 to Rule 717, which concerns the exposure of nonmarketable All-Or-None Orders.80 The Exchange states that this change would remove uncertainty with respect to the manner in which All-Or-None Orders would be handled in the order book, because the All-Or-None Order would be canceled if it cannot be immediately executed in its entirety.81 Accordingly, the Commission believes it is appropriate for the Exchange to require that All-Or-None Orders be entered with a time-in-force designation of Immediate-Or-Cancel. K. Delay of Implementation of Directed Orders Currently, MRX rules provide for the use of Directed Orders.82 The Exchange proposes to amend MRX Rule 811 (Directed Orders) to note that this functionality will not be available as of a certain date in the third quarter of 2017 to be announced in a notice. The Exchange represents that it will recommence the Directed Orders functionality on MRX within one year from the date of the filing of the proposed rule change. Otherwise, the Exchange will file a rule proposal with the Commission to remove these rules. The Exchange represents that it proposes to delay the implementation of the Directed Order functionality on MRX to provide the Exchange additional time to rebuild the required technology on the new platform.83 The Exchange further represents that members have been given adequate notice of the implementation dates and 78 An All-Or-None Order is a limit or market order that is to be executed in its entirety or not at all. See MRX Rule 715(c). 79 An Immediate-Or-Cancel Order is a limit order that is to be executed in whole or in part upon receipt, and any portion not so executed is to be treated as cancelled. See MRX Rule 715(b)(3). 80 See Notice, supra note 3, at 25834. 81 See Notice, supra note 3, at 25837. 82 See MRX Rule 811. 83 See Notice, supra note 3, at 25836. E:\FR\FM\31JYN1.SGM 31JYN1 35562 Federal Register / Vol. 82, No. 145 / Monday, July 31, 2017 / Notices that the Exchange will provide further notifications to members to ensure clarity about the delay of implementation of these functionalities.84 The Commission believes that the proposed rule change helps ensure clarity about the delay of implementation of this functionality. For these reasons, the Commission believes that the proposed rule change is consistent with the Act. IV. Conclusion It is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,85 that the proposed rule change (SR–MRX–2017– 02) be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.86 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–15994 Filed 7–28–17; 8:45 am] BILLING CODE 8011–01–P These amendments represent the Twenty-Eighth Substantive Amendment to the CTA Plan and the Twentieth Amendment to the CQ Plan (‘‘Amendments’’). The Amendments seek to amend the Plans in order to reflect changes to the names and addresses of certain Participants, as set forth in Section III(a) of the Plans. Pursuant to Rule 608(b)(3)(ii) under Regulation NMS,5 the Participants designate the Amendments as concerned solely with the administration of the Plans and as ‘‘Ministerial Amendments’’ under both Section IV(b) of the CTA Plan and Section IV(c) of the CQ Plan. As a result, the Amendments were effective upon filing and were submitted by the Chairman of the Plan’s Operating Committee. The Commission is publishing this notice to solicit comments from interested persons on the proposed Amendments. I. Rule 608(a) [Release No. 34–81199; File No. SR–CTA/ CQ–2017–03] Consolidated Tape Association; Notice of Filing and Immediate Effectiveness of the Twenty-Eight Substantive Amendment to the Second Restatement of the CTA Plan and the Twentieth Amendment to the Restated CQ Plan July 25, 2017. Pursuant to Section 11A of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 608 thereunder,2 notice is hereby given that on June 30, 2017, the Consolidated Tape Association (‘‘CTA’’) Plan participants (‘‘Participants’’) 3 filed with the Securities and Exchange Commission (‘‘Commission’’) a proposal to amend the Second Restatement of the CTA Plan and the Restated Consolidated Quotation (‘‘CQ’’) Plan (‘‘Plans’’).4 id. U.S.C. 78s(b)(2). 86 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78k–1. 2 17 CFR 242.608. 3 The Participants are: Bats BYX Exchange, Inc., BATS BZX Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., Chicago Board Options Exchange, Inc., Chicago Stock Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, Investors’ Exchange LLC, NASDAQ BX, Inc., NASDAQ PHLX, Inc., NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE Arca, Inc., NYSE MKT LLC, and NYSE National, Inc. 4 See Securities Exchange Act Release Nos. 10787 (May 10, 1974), 39 FR 17799 (May 20, 1974) (declaring the CTA Plan effective); 15009 (July 28, The Amendments effectuate changes that certain Participants have made to their names and addresses, as set forth in Section III(a) of the Plans. B. Governing or Constituent Documents Not applicable. C. Implementation of the Amendments Because the Amendments constitute ‘‘Ministerial Amendments’’ under both Section IV(b) of the CTA Plan and Section IV(c) under the CQ Plan, the Chairman of the Plan’s Operating Committee may submit the Amendments to the Commission on behalf of the Participants in the Plans. Because the Participants have designated the Amendments as concerned solely with the administration of the Plans, the Amendments become effective upon filing with the Commission. D. Development and Implementation Phases Not applicable. 84 See sradovich on DSKBCFCHB2PROD with NOTICES 85 15 VerDate Sep<11>2014 17:38 Jul 28, 2017 Jkt 241001 The Participants assert that the Amendments do not impose any burden on competition because they merely effectuate a change in the names and addresses of certain Participants. For the same reasons, the Participants do not believe that the Amendments introduce terms that are unreasonably discriminatory for purposes of Section 11A(c)(1)(D) of the Exchange Act. F. Written Understanding or Agreements Relating to Interpretation of, or Participation in, Plan Not applicable. G. Approval by Sponsors in Accordance With Plan See Item I.C. above. H. Description of Operation of Facility Contemplated by the Proposed Amendments Not applicable. A. Purpose of the Amendments SECURITIES AND EXCHANGE COMMISSION E. Analysis of Impact on Competition I. Terms and Conditions of Access Not applicable. J. Method of Determination and Imposition, and Amount of, Fees and Charges Not applicable. K. Method and Frequency of Processor Evaluation Not applicable. L. Dispute Resolution Not applicable. II. Rule 601(a) A. Equity Securities for Which Transaction Reports Shall be Required by the Plan Not applicable. B. Reporting Requirements Not applicable. C. Manner of Collecting, Processing, Sequencing, Making Available and Disseminating Last Sale Information Not applicable. 1978), 43 FR 34851 (August 7, 1978) (temporarily authorizing the CQ Plan); and 16518 (January 22, 1980), 45 FR 6521 (January 28, 1980) (permanently authorizing the CQ Plan). The most recent restatement of both Plans was in 1995. The CTA Plan, pursuant to which markets collect and disseminate last sale price information for nonNASDAQ listed securities, is a ‘‘transaction reporting plan’’ under Rule 601 under the Act, 17 CFR 242.601, and a ‘‘national market system plan’’ under Rule 608 under the Act, 17 CFR 242.608. The CQ Plan, pursuant to which markets collect and disseminate bid/ask quotation information for listed securities, is a ‘‘national market system plan’’ under Rule 608 under the Act, 17 CFR 242.608. 5 17 CFR 242.608(b)(3)(ii). PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 D. Manner of Consolidation Not applicable. E. Standards and Methods Ensuring Promptness, Accuracy and Completeness of Transaction Reports Not applicable. F. Rules and Procedures Addressed to Fraudulent or Manipulative Dissemination Not applicable. E:\FR\FM\31JYN1.SGM 31JYN1

Agencies

[Federal Register Volume 82, Number 145 (Monday, July 31, 2017)]
[Notices]
[Pages 35557-35562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15994]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81204; File No. SR-MRX-2017-02]


Self-Regulatory Organizations; Nasdaq MRX, LLC; Order Approving 
Proposed Rule Change To Amend Various Rules in Connection With a System 
Migration to Nasdaq INET Technology

July 25, 2017.

I. Introduction

    On May 17, 2017, the Nasdaq MRX, LLC (``MRX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to 
amend various Exchange rules in connection with a system migration to 
Nasdaq, Inc. (``Nasdaq'') supported technology. The proposed rule 
change was published for comment in the Federal Register on June 5, 
2017.\3\ On July 14, 2017, the Commission designated a longer period 
for Commission action on the proposed rule change, until September 3, 
2017.\4\ The Commission received no comment letters on the proposed 
rule change. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 80815 (May 30, 
2017), 82 FR 25827 (``Notice'').
    \4\ See Securities Exchange Act Release No. 81151 (July 14, 
2017, 82 FR 33527 (July 20, 2017).
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II. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\5\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\6\ which requires, among 
other things, that the rules of a national securities exchange 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

[[Page 35558]]

general, to protect investors and the public interest. As noted above, 
the Commission received no comment letters regarding the proposed rule 
change.
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    \5\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange proposes to amend various Exchange rules to reflect 
the MRX system migration to a Nasdaq INET technology.\7\ In connection 
this system migration, as discussed below, the Exchange intends to 
adopt certain trading functionality currently utilized on Nasdaq 
Exchanges.\8\
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    \7\ INET is utilized across Nasdaq's markets, including The 
NASDAQ Options Market LLC (``NOM''), NASDAQ PHLX LLC (``Phlx''), and 
NASDAQ BX, Inc. (collectively, the ``Nasdaq Exchanges''). See 
Notice, supra note 3, at 25827. The Commission also recently 
approved Nasdaq ISE, LLC's (formerly International Securities 
Exchange, LLC) (``ISE'') and Nasdaq GEMX, LLC's (formerly ISE 
Gemini, LLC) migrations to INET. See Securities Exchange Act Release 
Nos. 80225 (March 13, 2017), 82 FR 14243 (March 17, 2017) (SR-ISE-
2017-02); 80432 (April 11, 2017), 82 FR 18191 (April 17, 2017) (SR-
ISE-2017-03); 80011 (February 10, 2017), 82 FR 10927 (February 16, 
2017) (SR-ISEGemini-2016-17); 80014 (February 10, 2017), 82 FR 10952 
(February 16, 2017) (SR-ISEGemini-2016-18).
    \8\ See Notice, supra note 3, at 25827. The Exchange anticipates 
that it will begin implementation of the proposed rule changes in 
the third quarter of 2017. See id. According to the Exchange, the 
system migration will be on a symbol by symbol basis. The Exchange 
will issue an alert to members in the form of an Options Trader 
Alert to provide notification of the symbols that will migrate and 
the relevant dates. See id. The Exchange has also separately filed a 
companion proposed rule change to amend the Exchange's opening 
process in connection with the system migration to INET technology. 
See Securities Exchange Act Release No. 80937 (June 15, 2017), 82 FR 
28113 (June 20, 2017) (SR-MRX-2017-01). The Exchange proposes to 
replace its current opening process at Rule 701 with Phlx's opening 
process. See Phlx Rule 1017.
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A. Trading Halts

1. Cancellation of Quotes
    The Exchange proposes to amend MRX Rule 702 (Trading Halts) to 
conform the treatment of orders and quotes on the Exchange to Phlx Rule 
1047(f). Specifically, the Exchange proposes to amend Rule 702(a)(2) to 
provide that during a halt the Exchange will maintain existing orders 
on the book but not existing quotes. Pursuant to the revision, during 
the halt, the Exchange will accept orders and quotes and, for such 
orders and quotes, process cancels and modifications. Currently, the 
Exchange maintains existing orders and quotes during a trading halt. 
With respect to cancels and modifications during a trading halt, the 
Exchange represents that the current process on MRX will not change 
under the proposed rule change.\9\
---------------------------------------------------------------------------

    \9\ See Notice, supra note 3, at 25827.
---------------------------------------------------------------------------

    The Exchange represents that its proposal to maintain existing 
orders on the book but not existing quotes during a halt would provide 
market participants with clarity as to the manner in which interests 
will be handled by the system.\10\ The Exchange believes that, during a 
trading halt, the market may move and create risk to market 
participants with respect to resting interests.\11\
---------------------------------------------------------------------------

    \10\ See Notice, supra note 3, at 25834.
    \11\ See id.
---------------------------------------------------------------------------

    The Commission believes that that cancelling existing quotes during 
a trading halt would provide market participants the opportunity to 
update potentially stale quotes. Further, the Commission notes that the 
Exchange will process cancels and modifications for orders as well as 
quotes received during a halt. Finally, the Commission further notes 
that the proposed treatment of quotes during a halt is consistent with 
existing Phlx Rule 1047(f).
2. Limit Up-Limit Down
    The Exchange proposes to replace existing MRX Rule 703A (Trading 
During Limit Up-Limit Down States in Underlying Securities) with 
proposed MRX Rule 702(d).\12\ Specifically, proposed MRX Rule 702(d) 
will provide that during a Limit State and Straddle State in the 
underlying NMS stock \13\ the Exchange will not open an affected 
option.\14\ However, provided the Exchange has opened an affected 
option for trading, the Exchange will: (i) Reject Market Orders \15\ 
and notify members of the reason for such rejection; \16\ (ii) continue 
to process Market Orders exposed at the NBBO, pursuant to Supplementary 
Material .02 to ISE Rule 1901, pending in the system, and cancel such 
Market Order if at the end of the exposure period the affected 
underlying is in a Limit or Straddle State; \17\ and (iii) elect Stop 
Orders if the condition as provided in MRX Rule 715(d) is met, and, 
because such orders become Market Orders, cancel them back and notify 
members of the reason for such rejection.\18\ Moreover, when the 
security underlying an option class is in a Limit State or Straddle 
State, the Exchange will suspend the maximum quotation spread 
requirements for market maker quotes in MRX Rule 803(b)(4) and the 
continuous quotation requirements in MRX Rule 804(e).\19\ Additionally, 
the Exchange will not consider the time periods associated with Limit 
States and Straddle States when evaluating whether a market maker has 
complied with its continuous quotation requirements in MRX Rule 
804(e).\20\
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    \12\ The Exchange represents that proposed MRX Rule 702(d) is 
similar to Phlx Rule 1047(d). See Notice, supra note 3, at 25828.
    \13\ Proposed MRX Rule 702(d) states that capitalized terms used 
in Rule 702(d) will have the same meaning as provided for in the 
Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 
of Regulation NMS, as it may be amended from time to time.
    \14\ See proposed MRX Rule 702(d)(1). The Exchange states that 
its rules do not currently address the opening rotation in the event 
that the underlying NMS stock is open but has entered into a Limit 
or Straddle State. See Notice, supra note 3, at 25828.
    \15\ For the definition of the term ``Market Orders,'' see MRX 
Rule 715(a).
    \16\ See proposed MRX Rule 702(d)(2).
    \17\ See proposed MRX Rule 702(d)(2). If the affected underlying 
is no longer in a Limit or Straddle State after the exposure period, 
the Market Order will be processed with normal handling. See id. The 
Exchange currently cancels Market Orders pending in the system upon 
initiation of a Limit or Straddle State. See Notice, supra note 3, 
at 25828.
    \18\ See proposed MRX Rule 702(d)(3). MRX currently does not 
elect Stop Orders that are pending in the system during a Limit or 
Straddle State. Under the proposal, the Exchange will elect Stop 
Orders that are pending in the system during a Limit or Straddle 
State, if conditions for such election are met; however, because 
such orders become Market Orders, they will be cancelled back to the 
member with a reason for such rejection. See Notice, supra note 3, 
at 25828.
    \19\ See proposed MRX Rule 702(d)(4).
    \20\ See id.
---------------------------------------------------------------------------

    The Commission believes that the proposed Rule 702(d) would provide 
certainty to market participants regarding the manner in which Limit or 
Straddle States would impact the opening process as well as Market 
Orders and Stop Orders. The Commission believes that the rejection of 
Market Orders (including elected Stop Orders) is reasonably designed to 
potentially prevent executions of un-priced orders during times of 
significant volatility.\21\ The Commission also notes that processing 
rather than cancelling existing Market Orders is reasonable because 
these Market Orders are only pending in the system if they are exposed 
at the NBBO pursuant to Supplementary Material .02 to ISE Rule 1901 and 
would, in any case, be cancelled if at the end of the exposure period 
the affected underlying is still in a Limit or Straddle State.\22\ 
Further, the Commission believes that it is reasonable to permit the 
election of Stop Orders that are pending in the system during a Limit 
or Straddle State, since, upon election, the orders would be cancelled 
back to the members.\23\ Lastly, the Commission notes that proposed MRX 
Rule 702(d)(4) is substantively identical to existing MRX Rule 703A(c), 
which is being deleted.
---------------------------------------------------------------------------

    \21\ See Notice, supra note 3, at 25834.
    \22\ See Notice, supra note 3, at 25835.
    \23\ See id.

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[[Page 35559]]

3. Auction Handling During a Trading Halt
    The Exchange proposes to amend certain rules to account for the 
impact of a trading halt on the Exchange's auction mechanisms. First, 
the Exchange proposes to amend MRX Rule 723 (Price Improvement 
Mechanism for Crossing Transactions) regarding the manner in which a 
trading halt will impact an order entered into the Price Improvement 
Mechanism (``PIM''). Today, if a trading halt is initiated after an 
order is entered into the PIM, the Exchange terminates such auction and 
eligible interest is executed.\24\ The Exchange proposes to amend the 
current process by terminating the auction and not executing eligible 
interest when a trading halt occurs.\25\ Similarly, the Exchange also 
proposes to amend to MRX Rule 716 (Block Trades) to state that, if a 
trading halt is initiated after an order is entered into the Block 
Order Mechanism, Facilitation Mechanism, or Solicited Order Mechanism, 
the Exchange will automatically terminate such auction without 
execution.\26\
---------------------------------------------------------------------------

    \24\ See Notice, supra note 3, at 25829.
    \25\ See proposed MRX Rule 723(d)(5).
    \26\ See proposed subsections (c)(3), (d)(3)(iv), and (e)(2)(iv) 
of MRX Rule 716. The Exchange represents that this proposed 
amendment represents the current process on MRX and is generally 
consistent with Phlx Rule 1047(c). See Notice, supra note 3, at 
25829.
---------------------------------------------------------------------------

    The Exchange believes that its proposal to terminate the PIM 
auction, Block Order Mechanism, Facilitation Mechanism, and Solicited 
Order Mechanism and not execute eligible interest when a trading halt 
occurs will provide certainty to participants regarding how their 
interest will be handled.\27\ The Exchange believes that, during a 
trading halt, the market may move and create risk to market 
participants with respect to resting interest.\28\ The Commission 
believes that the proposed rule is consistent with the Act and provides 
transparency and clarity regarding the handling of these orders during 
a trading halt.
---------------------------------------------------------------------------

    \27\ See Notice, supra note 3, at 25835.
    \28\ See id.
---------------------------------------------------------------------------

B. Market Order Spread Protection

    The Exchange proposes to amend MRX Rule 711 (Acceptance of Quotes 
and Orders) by adopting a new mandatory risk protection entitled Market 
Order Spread Protection which will apply to Market Orders.\29\ Pursuant 
to proposed MRX Rule 711(c), if the NBBO is wider than a preset 
threshold at the time a Market Order is received by the Exchange, the 
Exchange will reject the order. The Exchange will notify members of the 
threshold with a notice, and, thereafter, will notify members of any 
subsequent changes to the threshold.\30\ The Exchange represents that 
the Market Order Spread Protection will be the same for all options 
traded on the Exchange and is applicable to all members that submit 
Market Orders.\31\
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    \29\ The Exchange states that this mandatory feature is 
currently offered on NOM to protect Market Orders from being 
executed in very wide markets. See Notice, supra note 3, at 25829. 
See also NOM Rules at Chapter VI, Section 6(c).
    \30\ See Notice, supra note 3, at 25829. The Exchange proposes 
to initially set the threshold to $5, similar to the threshold set 
on NOM. See id. The Exchange states that NOM set the differential at 
$5 to match the maximum bid/ask differential permitted for quotes on 
that exchange. See id. MRX also uses a similar $5 differential. See 
id.
    \31\ See Notice, supra note 3, at 25829.
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    The Exchange believes, and the Commission concurs, that the 
proposed Market Order Spread Protection would help mitigate risks 
associated with trading errors and help reduce the number of executions 
at dislocated prices.\32\ The Commission also notes that the protection 
is similar to a mandatory feature currently offered on NOM.\33\
---------------------------------------------------------------------------

    \32\ See Notice, supra note 3, at 25835.
    \33\ See NOM Rules at Chapter VI, Section 6(c).
---------------------------------------------------------------------------

C. Acceptable Trade Range

    Today, MRX offers a Price Level Protection that places a limit on 
the number of price levels at which an incoming order or quote to sell 
(buy) would be executed automatically when there are no bids (offers) 
from other exchanges at any price for the options series.\34\ The 
Exchange proposes to replace the current Price Level Protection with 
Phlx's Acceptable Trade Range.\35\ The Exchange states that the 
proposed Acceptable Trade Range is a mechanism designed to prevent the 
system from experiencing dramatic price swings by preventing the market 
from moving beyond set thresholds.\36\ The system will calculate an 
Acceptable Trade Range to limit the range of prices at which an order 
or quote will be allowed to execute.\37\ Upon receipt of a new order or 
quote, the Acceptable Trade Range is calculated by taking the reference 
price, plus or minus a value to be determined by the Exchange, where 
the reference price is the National Best Bid (``NBB'') for sell orders/
quotes and the National Best Offer (``NBO'') for buy orders/quotes. 
Accordingly, the Acceptable Trade Range is: the reference price - (x) 
for sell orders/quotes; and the reference price + (x) for buy 
orders.\38\ If an order or quote reaches the outer limit of the 
Acceptable Trade Range (the ``Threshold Price'') without being fully 
executed, then any unexecuted balance will be cancelled.\39\ The 
Acceptable Trade Range will not be available for All-or-None 
Orders.\40\
---------------------------------------------------------------------------

    \34\ See Notice, supra note 3, at 25829; MRX Rule 714(b)(1).
    \35\ See Phlx Rule 1080(p). Unlike Phlx, MRX does not offer a 
general continuous re-pricing mechanism. See id. Accordingly, the 
Exchange states that the proposed Acceptable Trade Range will not 
include the posting period functionality available today on Phlx. 
See Notice, supra note 3, at 25830, n.15. The Exchange will not post 
interest that exceeds the outer limit of the Acceptable Trade Range; 
rather the interest will be cancelled. See Notice, supra note 3, at 
25830. Orders that do not exceed the outer limit of the Acceptable 
Trade Range will post to the order book and will reside on the order 
book at such price until they are either executed in full or 
cancelled by the member. See id.
    \36\ See Notice, supra note 3, at 25830.
    \37\ See proposed MRX Rule 714(b)(1)(i).
    \38\ The Exchange states that the Acceptable Trade Range 
settings are tied to the option premium. See Notice, supra note 3, 
at 25830, n.16. A table consisting of several steps based on the 
premium of an option will be displayed on the Exchange Web site and 
used to determine how far the market for a given option will be 
allowed to move. See Notice, supra note 3, at 25831. Updates to the 
table would be announced via an Exchange alert, generally the prior 
day. See id.
    \39\ See proposed MRX Rule 714(b)(1)(ii).
    \40\ See proposed MRX Rule 714(b)(1)(ii). Today, MRX's Price 
Level Protection rule is also not available for All-or-None Orders. 
See Notice, supra note 3, at 25830, n.17.
---------------------------------------------------------------------------

    The Exchange represents that it will set the Acceptable Trade Range 
at levels to ensure that it is triggered infrequently.\41\ While the 
Acceptable Trade Range settings will be tied to the option premium, 
other factors will be considered when determining the exact 
settings.\42\ For example, the Exchange states that acceptable ranges 
may change if market-wide volatility is high or if overall market 
liquidity is low based on historical trends.\43\ To ensure a well-
functioning market, the Exchange believes that different market 
conditions may require adjustments to the threshold amounts from time 
to time.\44\ Further, while the Acceptable Trade Range settings will 
generally be the same across all options traded on the Exchange, MRX 
proposes to set them separately based on characteristics of the 
underlying security.\45\ For example, the Exchange has generally 
observed that options subject to the Penny Pilot program quote with 
tighter spreads than options not subject to the Penny Pilot. 
Accordingly, the Exchange will set Acceptable Trade Ranges for three 
categories of options: (1) Penny Pilot Options trading in one cent 
increments for options trading at less than $3.00 and increments of 
five cents for options trading at $3.00 or more; (2) Penny Pilot

[[Page 35560]]

Options trading in one-cent increments for all prices; and (3) Non-
Penny Pilot Options.\46\
---------------------------------------------------------------------------

    \41\ See Notice, supra note 3, at 25830.
    \42\ See Notice, supra note 3, at 25831.
    \43\ See id.
    \44\ See id.
    \45\ See id.
    \46\ See proposed MRX Rule 714(b)(1)(iii).
---------------------------------------------------------------------------

    The Exchange represents that the Acceptable Trade Range should 
prevent the system from experiencing dramatic price swings by 
preventing the market from moving beyond set thresholds.\47\ The 
Commission believes that the Acceptable Trade Range is reasonably 
designed to prevent executions of orders and quotes at prices that are 
significantly worse than the NBBO at the time of an order's submission 
and may reduce the potential negative impacts of unanticipated 
volatility in individual options. Further, the Commission notes that 
the proposed Acceptable Trade Range is similar to an existing mechanism 
on Phlx.\48\
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    \47\ See Notice, supra note 3, at 25835.
    \48\ See Notice, supra note 3, at 25829; Phlx Rule 1080(p).
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D. PMM Order Handling and Opening Obligations

    The Exchange proposes to eliminate the Primary Market Maker 
(``PMM'') order handling and opening obligations in MRX Rule 
803(c).\49\ As described above, with the migration of MRX to the Nasdaq 
INET architecture, the Exchange is adopting the Acceptable Trade Range 
and opening rotation functionality currently offered on NOM and Phlx, 
which do not contain similar requirements for the PMMs as in MRX Rule 
803(c).
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    \49\ MRX Rule 803(c) provides that, in addition to the 
obligations contained in Rule 803 for market makers generally, for 
options classes to which a market maker is the appointed PMM, the 
PMM shall have the responsibility to: (1) As soon as practical, 
address Priority Customer Orders that are not automatically executed 
pursuant to Rule 714(b)(1) in a manner consistent with its 
obligations under Rule 803(b) by either (i) executing all or a 
portion of the order at a price that at least matches the NBBO and 
that improves upon the Exchange's best bid (in the case of a sell 
order) or the Exchange's best offer (in the case of a buy order); or 
(ii) releasing all or a portion of the order for execution against 
bids and offers on the Exchange; and (2) initiate trading in each 
series pursuant to Rule 701 (Trading Rotations).
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    The Exchange represents that PMMs' current obligations are no 
longer necessary due to the introduction of the Acceptable Trade Range 
and proposed changes to the Exchange's opening process.\50\ The 
Exchange states that its proposal to conform the Exchange's opening 
process to Phlx Rule 1017 will result in an opening initiated by the 
receipt of an appropriate number of valid width quotes by the PMM or 
Competitive Market Maker, instead of an opening process initiated by a 
PMM.\51\ Similarly, the Exchange believes the proposed Acceptable Trade 
Range functionality will continue to provide order protection to 
members without imposing any PMM obligations.\52\ The Exchange further 
represents that NOM and Phlx do not impose similar PMM order handling 
and opening obligations.\53\ Accordingly, the Commission believes that 
these changes are consistent with the Act.
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    \50\ See Notice, supra note 3, at 25832. See also supra note 8.
    \51\ See Notice, supra note 3, at 25831-32. See also supra note 
8.
    \52\ See Notice, supra note 3, at 25832. The Exchange states 
that Phlx does not currently have similar roles for a Specialist on 
its market. See id.
    \53\ See Notice, supra note 3, at 25831.
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E. Back-Up PMM

    The Exchange proposes to amend Supplementary Material .03 to MRX 
Rule 803 to eliminate Back-Up PMMs. Today, any MRX member that is 
approved to act in the capacity of a PMM or an ``Alternative Primary 
Market Maker'' may voluntarily act as a Back-Up PMM in an options 
series in which it is quoting as a Competitive Market Maker 
(``CMM'').\54\ With the technology migration, the Exchange believes 
that a Back-Up PMM is no longer necessary because under INET the 
Exchange will not utilize the order handling obligations present on the 
Exchange today.\55\ The Exchange further represents that the proposed 
new opening process obviates the importance of such a role because it 
would no longer rely on a market maker to initiate the opening 
process.\56\ Accordingly, the Commission believes that these changes 
are consistent with the Act.
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    \54\ See MRX Rule 803, Supplementary Material .03.
    \55\ See Notice, supra note 3, at 25832.
    \56\ See Notice, supra note 3, at 25832. See also supra note 8.
---------------------------------------------------------------------------

F. Market Maker Speed Bump

    The Exchange proposes to amend MRX Rule 804 (Market Maker 
Quotations) to establish default parameters for certain risk 
functionality. The Exchange currently offers a risk protection 
mechanism for market maker quotes that removes a member's quotes in an 
options class if a specified number of curtailment events occur during 
a set time period (``Market Maker Speed Bump'').\57\ In addition, the 
Exchange offers a market-wide risk protection that removes a market 
maker's quotes across all classes if a number of curtailment events 
occur (``Market-Wide Speed Bump'').\58\ MRX Rule 804(g) currently 
requires that market makers set curtailment parameters for both the 
Market Maker Speed Bump and the Market-Wide Speed Bump. Today, if a 
market maker does not set these parameters, for each Market Maker Speed 
Bump and the Market-Wide Speed Bump, the system rejects their 
quotes.\59\ With the technology migration, the Exchange proposes to 
provide default curtailment parameters, which will be determined by the 
Exchange and announced to members.\60\ The Commission believes that 
this change is consistent with the Act and notes that, although the 
Exchange will establish default curtailment settings, market makers 
will have discretion to set different curtailment settings appropriate 
for their trading and risk tolerance.
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    \57\ See MRX Rule 804(g)(1).
    \58\ See MRX Rule 804(g)(2).
    \59\ See Notice, supra note 3, at 25832.
    \60\ See id.
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G. Anti-Internalization

    The Exchange proposes to amend Supplementary Material .03 to MRX 
Rule 804 (Market Maker Quotations) to adopt an anti-internalization 
rule. Today, MRX's functionality prevents Immediate-or-Cancel orders 
entered by a market maker from trading with the market maker's own 
quote.\61\ The Exchange proposes to replace this self-trade protection 
with anti-internalization functionality currently offered on Phlx.\62\ 
The Exchange proposes to provide that quotes and orders entered by 
market makers using the same member identifier will not be executed 
against quotes and orders entered on the opposite side of the market by 
the same market maker using the same member identifier. In such a case, 
the system will cancel the resting quote or order back to the entering 
party prior to execution. The proposed anti-internalization 
functionality will not apply in any auction. The Exchange states that 
this proposed functionality does not modify the duty of best execution 
owed to public customer orders.\63\
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    \61\ See id.
    \62\ See Phlx Rule 1080(p)(2).
    \63\ See Notice, supra note 3, at 25833.
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    The Exchange represents that the proposal is designed to assist 
market makers in reducing trading costs from unwanted executions 
potentially resulting from the interaction of executable interest from 
the same firm performing the same market making function.\64\ The 
Commission believes that the proposed rule is reasonably designed to 
prevent the unwanted execution of quotes and orders entered

[[Page 35561]]

by market makers using the same member identifier.
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    \64\ See Notice, supra note 3, at 25833, n.33.
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H. Minimum Execution Quantity Orders

    The Exchange proposes to amend MRX Rule 715 (Types of Orders) to 
remove minimum quantity orders in subpart (q).\65\ The Exchange states 
that members have not adopted this feature, and therefore proposes to 
remove this order type.\66\ Furthermore, the Exchange proposes to 
remove two references to minimum quantity orders in Supplementary 
Material .02 to MRX Rule 713 and in Supplementary Material .04 to MRX 
Rule 717.
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    \65\ A Minimum Quantity Order is an order that is initially 
available for partial execution only for a specified number of 
contracts or greater. A member may specify whether any subsequent 
executions of the order must also be for the specified number of 
contracts or greater, or if the balance may be executed as a regular 
order. If all executions are to be for the specified number of 
contracts or greater and the balance of the order after one or more 
partial execution(s) is less than the minimum, such balance is 
treated as all-or-none. See MRX Rule 715(q).
    \66\ See Notice, supra note 3, at 25833.
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    The Exchange states that removing the minimum quantity order type 
would simplify functionality available on the Exchange and reduce the 
complexity of its order types.\67\ The Exchange further represents that 
members have not adopted this feature.\68\ Accordingly, the Commission 
believes it is appropriate for the Exchange to remove references to the 
minimum quantity order type.
---------------------------------------------------------------------------

    \67\ See Notice, supra note 3, at 25836.
    \68\ See Notice, supra note 3, at 25833.
---------------------------------------------------------------------------

I. Cancel and Replace Orders

    The Exchange proposes to amend Supplementary Material .02 to MRX 
Rule 715 (Types of Orders) to memorialize how the Exchange system will 
handle cancel and replace orders in connection with the Exchange's 
technology migration to INET.\69\ Currently, Exchange members can send 
a Cancel and Replace Order in one message, which allows the replacement 
order to retain the time priority of the cancelled order, subject to 
certain exceptions.\70\ However, currently the Exchange does not apply 
price or other reasonability checks to the replacement order for all 
Cancel and Replace Orders.\71\ For example, the Exchange notes that 
currently, a Cancel and Replace Order which reduced the size of an 
original order from 600 to 300 contracts would not be subject to price 
or other reasonability checks.\72\
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    \69\ See id.
    \70\ See id. The Exchange notes that, instead of sending a 
Cancel and Replace Order, a Member can separately send a 
cancellation message and a new order, for which the Exchange would 
apply price or other reasonability checks, but the new order would 
not retain the priority of the original order. See id. This behavior 
will not change. See id.
    \71\ See Notice, supra note 3, at 25833.
    \72\ See id.
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    The Exchange now proposes to define the Cancel and Replace Order to 
ensure that price and other reasonability checks are applied to Cancel 
and Replace Orders.\73\ The Exchange proposes to define a Cancel and 
Replace Order as a single message for the immediate cancellation of a 
previously received order and the replacement of that order with a new 
order. If the previously placed order is already partially filled or in 
its entirety, the replacement order is automatically canceled or 
reduced by the number of contracts that were executed. Additionally, 
the replacement order will retain the priority of the cancelled order, 
if the order posts to the order book, provided the price is not 
amended, size is not increased, or in the case of Reserve Orders, size 
is not changed. However, if the replacement portion of a Cancel and 
Replace Order does not satisfy the system's price or other 
reasonability checks the existing order will be cancelled and not 
replaced.\74\
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    \73\ See proposed MRX Rule 715, Supplementary Material .02.
    \74\ Price and reasonability checks that would be applied 
include MRX Rule 710 (Minimum Trading Increments), MRX Rule 711(c) 
(proposed Market Order Spread Protection) and MRX Rule 714(b)(2) 
(Limit Order Price Protection). See Notice, supra note 3 at 25833, 
n.40. The Exchange also notes that, as for other orders, the 
Exchange may cancel an order because it does not satisfy a format or 
other requirement specified in the Exchange's rules and 
specifications. See id.
---------------------------------------------------------------------------

    The Exchange represents that conducting price or other 
reasonability checks for all Cancel and Replace Orders will validate 
orders against current market conditions prior to proceeding with the 
request to modify the order.\75\ The Exchange further believes that 
memorializing Cancel and Replace Order handling will add transparency 
to the Exchange's rules and reduce the potential for investor 
confusion.\76\
---------------------------------------------------------------------------

    \75\ See Notice, supra note 3 at 25836.
    \76\ See id.
---------------------------------------------------------------------------

    The Commission notes that other exchanges with a similar order type 
permit an order to retain priority if only the size of the order is 
decremented.\77\ Accordingly, the Commission believes it is appropriate 
for the Exchange to define Cancel and Replace Orders in the manner 
proposed.
---------------------------------------------------------------------------

    \77\ See id.; see Phlx Rule 1080(b)(i)(A).
---------------------------------------------------------------------------

J. All-Or-None Orders

    The Exchange proposes to amend MRX Rule 715(c) to provide that All-
Or-None Orders\78\ may only be entered into the Exchange's system with 
a time-in-force designation of Immediate-Or-Cancel.\79\ Currently, the 
Exchange allows users to submit All-Or-None Orders with any time-in-
force designation. As proposed, an All-Or-None Order would be required 
to be submitted as an Immediate-Or-Cancel Order and thus will either 
execute in its entirety or be cancelled. Because All-Or-None Orders 
will either be executed or cancelled, the Exchange also proposes to 
remove language stating that All-Or-None Orders can be maintained in 
the system in Supplementary Material .02 to MRX Rule 713 and to delete 
Supplementary Material .04 to Rule 717, which concerns the exposure of 
non-marketable All-Or-None Orders.\80\
---------------------------------------------------------------------------

    \78\ An All-Or-None Order is a limit or market order that is to 
be executed in its entirety or not at all. See MRX Rule 715(c).
    \79\ An Immediate-Or-Cancel Order is a limit order that is to be 
executed in whole or in part upon receipt, and any portion not so 
executed is to be treated as cancelled. See MRX Rule 715(b)(3).
    \80\ See Notice, supra note 3, at 25834.
---------------------------------------------------------------------------

    The Exchange states that this change would remove uncertainty with 
respect to the manner in which All-Or-None Orders would be handled in 
the order book, because the All-Or-None Order would be canceled if it 
cannot be immediately executed in its entirety.\81\ Accordingly, the 
Commission believes it is appropriate for the Exchange to require that 
All-Or-None Orders be entered with a time-in-force designation of 
Immediate-Or-Cancel.
---------------------------------------------------------------------------

    \81\ See Notice, supra note 3, at 25837.
---------------------------------------------------------------------------

K. Delay of Implementation of Directed Orders

    Currently, MRX rules provide for the use of Directed Orders.\82\ 
The Exchange proposes to amend MRX Rule 811 (Directed Orders) to note 
that this functionality will not be available as of a certain date in 
the third quarter of 2017 to be announced in a notice. The Exchange 
represents that it will recommence the Directed Orders functionality on 
MRX within one year from the date of the filing of the proposed rule 
change. Otherwise, the Exchange will file a rule proposal with the 
Commission to remove these rules.
---------------------------------------------------------------------------

    \82\ See MRX Rule 811.
---------------------------------------------------------------------------

    The Exchange represents that it proposes to delay the 
implementation of the Directed Order functionality on MRX to provide 
the Exchange additional time to rebuild the required technology on the 
new platform.\83\ The Exchange further represents that members have 
been given adequate notice of the implementation dates and

[[Page 35562]]

that the Exchange will provide further notifications to members to 
ensure clarity about the delay of implementation of these 
functionalities.\84\ The Commission believes that the proposed rule 
change helps ensure clarity about the delay of implementation of this 
functionality.
---------------------------------------------------------------------------

    \83\ See Notice, supra note 3, at 25836.
    \84\ See id.
---------------------------------------------------------------------------

    For these reasons, the Commission believes that the proposed rule 
change is consistent with the Act.

IV. Conclusion

    It is Therefore Ordered, pursuant to Section 19(b)(2) of the 
Act,\85\ that the proposed rule change (SR-MRX-2017-02) be, and hereby 
is, approved.
---------------------------------------------------------------------------

    \85\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\86\
---------------------------------------------------------------------------

    \86\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-15994 Filed 7-28-17; 8:45 am]
 BILLING CODE 8011-01-P