Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX Options Rule 529, Order Routing to Other Exchanges, 46315-46317 [2017-21278]

Download as PDF Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule change (File Number SR–NYSEArca–2017–69). SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81746; File No. SR– NYSEArca–2017–69] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To List and Trade Shares of ProShares QuadPro Funds Under Commentary .02 to NYSE Arca Equities Rule 8.200 sradovich on DSK3GMQ082PROD with NOTICES September 28, 2017. On July 31, 2017, NYSE Arca, Inc. 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 ProShares QuadPro U.S. Large Cap Futures Long Fund, ProShares QuadPro U.S. Large Cap Futures Short Fund, ProShares QuadPro U.S. Small Cap Futures Long Fund, and ProShares QuadPro U.S. Small Cap Futures Short Fund under Commentary .02 to NYSE Arca Equities Rule 8.200. The proposed rule change was published for comment in the Federal Register on August 18, 2017.3 The Commission received no comments on the proposed rule change. Section 19(b)(2) of the Act 4 provides that, within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day after publication of the notice for this proposed rule change is October 2, 2017. The Commission is extending this 45-day time period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,5 designates November 16, 2017, as the date by which the Commission shall either 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 81388 (August 14, 2017), 82 FR 39477. 4 15 U.S.C. 78s(b)(2). 5 Id. 2 17 VerDate Sep<11>2014 20:18 Oct 03, 2017 Jkt 244001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–21274 Filed 10–3–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81753; File No. SR–MIAX– 2017–41] Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX Options Rule 529, Order Routing to Other Exchanges September 28, 2017. Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 20, 2017, Miami International Securities Exchange, LLC (‘‘MIAX Options’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to amend Exchange Rule 529, Order Routing to Other Exchanges. The text of the proposed rule change is available on the Exchange’s Web site at https://www.miaxoptions.com/rulefilings, at MIAX’s principal office, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed 6 17 CFR 200.30–3(a)(31). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00105 Fmt 4703 46315 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 Exchange proposes to amend Rule 529, Order Routing to Other Exchanges, to provide additional information in the Route Notification broadcast as described in subsection (b)(2)(i). Specifically, the Exchange proposes to include the expected price to which the interest will be routed in the Route Notification message distributed via the Exchange’s data feed. Additionally, the Exchange proposes to amend the rule text to improve its clarity and precision. The Exchange also proposes to adopt new Interpretations and Policies .02 to clarify that, for purposes of Rule 529, the expected price to which the interest will be routed is the ABBO 3 at the start of the Route Timer. Under Exchange Rule 529 the Exchange may automatically route orders to other exchanges under certain circumstances. The Exchange will employ one of two Route Mechanisms, Immediate Routing or the Route Timer,4 when a Public Customer 5 order is received and/or reevaluated that is both routable and marketable against the opposite side ABBO upon receipt and the Exchange’s disseminated market is not equal to the opposite side ABBO, or is equal to the opposite side ABBO and of insufficient size to satisfy the order.6 Under the Exchange’s proposal, all existing functionality of the Route Timer will remain intact. Currently, Public Customer orders that are not eligible for Immediate Routing are subject to a Route Timer. The Route Timer, which will never exceed one second, allows Market Makers 7 and 3 The term ‘‘ABBO’’ or ‘‘Away Best Bid or Offer’’ means the best bid(s) or offer(s) disseminated by other Eligible Exchanges and calculated by the Exchange based on market information received by the Exchange from OPRA. See Exchange Rule 100. 4 A Route Timer is a brief timer that operates as a pause before marketable interest is routed to an away exchange. See Exchange Rule 529(b)(2)(i). 5 The term ‘‘Public Customer’’ means a person that is not a broker or dealer in securities. See Exchange Rule 100. 6 See Exchange Rule 529(b). 7 The term ‘‘Market Makers’’ refers to ‘‘Lead Market Makers’’, ‘‘Primary Lead Market Makers’’ Continued Sfmt 4703 E:\FR\FM\04OCN1.SGM 04OCN1 46316 Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices sradovich on DSK3GMQ082PROD with NOTICES other market participants an opportunity to interact with the initiating order before it is routed to another options exchange.8 Contemporaneously with the start of the Route Timer, the Exchange’s System 9 broadcasts a Route Notification message to subscribers of the Exchange’s Administrative Information Subscriber (‘‘AIS’’) data feed. The Route Notification message includes the option contract size and side of the market of the initiating Public Customer order.10 The Exchange now proposes to also include the expected price to which the interest will be routed in the Route Notification message. Additionally, the Exchange proposes to adopt new Interpretations and Policies .02 to state that, for purposes of this Rule, the expected price to which the interest will be routed is the ABBO at the start of the Route Timer.11 The System will display and book the initiating order at its limit price, or if the limit price locks or crosses the current opposite side NBBO,12 display the initiating order one Minimum Price Variation (‘‘MPV’’) 13 away from the current opposite side NBBO and book the initiating order at a price that will internally lock the current opposite side NBBO. The initiating order will remain available for execution up to its original bid or down to its original offer.14 If, during the Route Timer, the Exchange receives a new order or quote on the opposite side of the market from the initiating order that can be executed, the System will immediately execute the remaining contracts from the initiating order to the extent possible, provided that the execution price does not violate the current NBBO.15 Conversely, if during the Route Timer the Exchange receives orders or quotes on the same side of the market as the initiating order, such new orders or quotes will join the initiating order in the Route Timer.16 and ‘‘Registered Market Makers’’ collectively. See Exchange Rule 100. 8 See Exchange Rule 529(b)(2)(i). 9 The term ‘‘System’’ means the automated trading system used by the Exchange for the trading of securities. See Exchange Rule 100. 10 See Exchange Rule 529(b)(2)(i). 11 The Exchange notes that the expected price to which the interest will be routed may differ from the actual price to which the interest is routed due to changes in the market that occur during the duration of the Route Timer. 12 The term ‘‘NBBO’’ means the national best bid or offer as calculated by the Exchange based on market information received from OPRA. See Exchange Rule 100. 13 See Exchange Rule 510. 14 See Exchange Rule 529(b)(2)(i). 15 Id. 16 See Exchange Rule 529(b)(2)(iii). VerDate Sep<11>2014 20:18 Oct 03, 2017 Jkt 244001 If at any point during the Route Timer the initiating order and all joining interest on the same side of the market is either traded in full or cancelled in full, the Route Timer will be terminated and normal trading will resume.17 In addition, if at any point during the Route Timer a change in the ABBO would allow all or part of the initiating order and any joining interest on the same side of the market to trade on the Exchange at the revised NBBO, the Route Timer will be terminated and normal trading will resume.18 At the end of the Route Timer, the System will route Intermarket Sweep Orders 19 representing the initiating order’s remaining contracts to away markets disseminating the ABBO. The System will price the routed order at the opposite side ABBO with a size equal to the exchange’s disseminated ABBO size as needed. If there are still additional contracts to be executed from the initiating order after the Intermarket Sweep Orders have been routed to the away markets disseminating the ABBO for the away markets’ full size, the System will handle remaining interest from the initiating order in accordance with the provisions of Exchange Rule 515, Execution of Orders and Quotes.20 The Exchange also proposes to amend Rule 529(b)(2)(i) to correct the sentence which reads, ‘‘[c]ontemporaneously with the start of the Timer, the System will broadcast a Route Notification to subscribers of the Exchange’s data feeds. . . .’’ The Exchange broadcasts the Route Notification on a single data feed, the AIS feed. Therefore, the Exchange proposes to amend the rule text to specifically identify the data feed by its name, the Administrative Information Subscriber (‘‘AIS’’) data feed. The Exchange also notes that other option exchanges offer similar functionality in their respective routing mechanisms. Those routing mechanisms (i) expose eligible initiating interest at the best price, (ii) contain an exposure period, the duration of which does not exceed one second, and (iii) route remaining interest to away markets at the conclusion of the exposure period.21 In particular, those routing mechanisms also expose their expected route price, which the Exchange is now proposing to expose as well pursuant to this proposed rule change. For example, BATS EDGX Exchange, Inc. (‘‘BATS 17 Id. 18 Id. 19 See Exchange Rule 516(f). Exchange Rule 529(b)(2)(iv). 21 See BATS EDGX Rule 21.18, Nasdaq PHLX Rule 1080(m)(iv)(B) and (C), and NYSE American Rule 994NY. 20 See PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 EDGX’’) Rule 21.18 provides for a Step Up Mechanism (‘‘SUM’’) which electronically exposes eligible orders at the NBBO price immediately upon receipt. As well, the BATS EDGX rule prescribes that the exposure period shall be for a period of time determined by the Exchange on a class-by-class basis, which period of time shall not exceed one second.22 Following the exposure period, BATS EDGX routes the remaining portion of the exposed order to other exchanges.23 Accordingly, pursuant to the proposed rule change, the Exchange is merely proposing to make available the same type of information about the order to be routed as is currently made available by other options exchanges.24 2. Statutory Basis MIAX believes that its proposed rule change is consistent with Section 6(b) of the Act 25 in general, and furthers the objectives of Section 6(b)(5) of the Act 26 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. The Exchange believes the proposed changes 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 because they seek to improve the accuracy of the Exchange’s rules. In particular, the Exchange believes that the proposed rule changes will provide greater clarity to Members and the public regarding the Exchange’s Rules, and it is in the public interest for rules to be accurate and concise so as to eliminate the potential for confusion. The Exchange believes that including the expected price to which the interest will be routed in the Route Notification message promotes just and equitable principles of trade and removes impediments to a free and open market by providing greater transparency concerning the operation of Exchange functionality. The Exchange also believes the proposal will contribute to 22 See BATS EDGX 21.18(b)(1). BATS EDGX 21.18(b)(4). 24 See supra note 21. 25 15 U.S.C. 78f(b). 26 15 U.S.C. 78f(b)(5). 23 See E:\FR\FM\04OCN1.SGM 04OCN1 Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices the protection of investors and the public interest by clarifying the Exchange’s rules. The Exchange believes that additional clarity and transparency in the Exchange’s rules will strengthen investor confidence in the market and facilitate fair competition among market participants. The Exchange notes that other option exchanges that offer similar functionality have similar rules in place.27 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes the proposed rule change will not impose any burden on competition as the Exchange is merely providing supplemental information that may be derived by market participants independently. The Exchange’s proposal does not substantively modify any Exchange functionality and is not designed to address any competitive issues, but rather to provide additional information in the Route Notification message and add further clarity to the Exchange’s rules. Since the Exchange does not propose to substantively modify the operation of exchange functionality, the proposed rule change will not impose any burden on inter-market competition. Additionally, the Exchange does not believe the proposed rule change will impose any burden on intramarket competition as the Rules apply equally to all Exchange Members. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. sradovich on DSK3GMQ082PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, it has become effective pursuant to 19(b)(3)(A) of the Act 28 and Rule 19b–4(f)(6) 29 thereunder. 27 See supra note 21. 28 15 U.S.C. 78s(b)(3)(A). 29 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give VerDate Sep<11>2014 20:18 Oct 03, 2017 Jkt 244001 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SRMIAX–2017–41 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–MIAX–2017–41. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the 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. PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 46317 filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–MIAX– 2017–41 and should be submitted on or before October 25, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.30 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–21278 Filed 10–3–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81748; File No. SR– BatsEDGA–2017–25] Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 11.7, Opening Process, and Rule 13.4, Usage of Data Feeds, To Reflect the Name Change of NYSE MKT to NYSE American September 28, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 25, 2017, Bats EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) 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 Exchange. The Exchange has designated this proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6)(iii) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend paragraph (c)(1) of Rule 11.7, 30 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6)(iii). 1 15 E:\FR\FM\04OCN1.SGM 04OCN1

Agencies

[Federal Register Volume 82, Number 191 (Wednesday, October 4, 2017)]
[Notices]
[Pages 46315-46317]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21278]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81753; File No. SR-MIAX-2017-41]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend MIAX Options Rule 529, Order Routing to 
Other Exchanges

September 28, 2017.
    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on September 20, 2017, Miami International 
Securities Exchange, LLC (``MIAX Options'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') a proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by the Exchange. The Commission is publishing this notice 
to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend Exchange Rule 529, Order 
Routing to Other Exchanges.
    The text of the proposed rule change is available on the Exchange's 
Web site at https://www.miaxoptions.com/rule-filings, at MIAX's 
principal office, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 529, Order Routing to Other 
Exchanges, to provide additional information in the Route Notification 
broadcast as described in subsection (b)(2)(i). Specifically, the 
Exchange proposes to include the expected price to which the interest 
will be routed in the Route Notification message distributed via the 
Exchange's data feed. Additionally, the Exchange proposes to amend the 
rule text to improve its clarity and precision. The Exchange also 
proposes to adopt new Interpretations and Policies .02 to clarify that, 
for purposes of Rule 529, the expected price to which the interest will 
be routed is the ABBO \3\ at the start of the Route Timer.
---------------------------------------------------------------------------

    \3\ The term ``ABBO'' or ``Away Best Bid or Offer'' means the 
best bid(s) or offer(s) disseminated by other Eligible Exchanges and 
calculated by the Exchange based on market information received by 
the Exchange from OPRA. See Exchange Rule 100.
---------------------------------------------------------------------------

    Under Exchange Rule 529 the Exchange may automatically route orders 
to other exchanges under certain circumstances. The Exchange will 
employ one of two Route Mechanisms, Immediate Routing or the Route 
Timer,\4\ when a Public Customer \5\ order is received and/or 
reevaluated that is both routable and marketable against the opposite 
side ABBO upon receipt and the Exchange's disseminated market is not 
equal to the opposite side ABBO, or is equal to the opposite side ABBO 
and of insufficient size to satisfy the order.\6\
---------------------------------------------------------------------------

    \4\ A Route Timer is a brief timer that operates as a pause 
before marketable interest is routed to an away exchange. See 
Exchange Rule 529(b)(2)(i).
    \5\ The term ``Public Customer'' means a person that is not a 
broker or dealer in securities. See Exchange Rule 100.
    \6\ See Exchange Rule 529(b).
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    Under the Exchange's proposal, all existing functionality of the 
Route Timer will remain intact. Currently, Public Customer orders that 
are not eligible for Immediate Routing are subject to a Route Timer. 
The Route Timer, which will never exceed one second, allows Market 
Makers \7\ and

[[Page 46316]]

other market participants an opportunity to interact with the 
initiating order before it is routed to another options exchange.\8\ 
Contemporaneously with the start of the Route Timer, the Exchange's 
System \9\ broadcasts a Route Notification message to subscribers of 
the Exchange's Administrative Information Subscriber (``AIS'') data 
feed. The Route Notification message includes the option contract size 
and side of the market of the initiating Public Customer order.\10\ The 
Exchange now proposes to also include the expected price to which the 
interest will be routed in the Route Notification message. 
Additionally, the Exchange proposes to adopt new Interpretations and 
Policies .02 to state that, for purposes of this Rule, the expected 
price to which the interest will be routed is the ABBO at the start of 
the Route Timer.\11\
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    \7\ The term ``Market Makers'' refers to ``Lead Market Makers'', 
``Primary Lead Market Makers'' and ``Registered Market Makers'' 
collectively. See Exchange Rule 100.
    \8\ See Exchange Rule 529(b)(2)(i).
    \9\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
    \10\ See Exchange Rule 529(b)(2)(i).
    \11\ The Exchange notes that the expected price to which the 
interest will be routed may differ from the actual price to which 
the interest is routed due to changes in the market that occur 
during the duration of the Route Timer.
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    The System will display and book the initiating order at its limit 
price, or if the limit price locks or crosses the current opposite side 
NBBO,\12\ display the initiating order one Minimum Price Variation 
(``MPV'') \13\ away from the current opposite side NBBO and book the 
initiating order at a price that will internally lock the current 
opposite side NBBO. The initiating order will remain available for 
execution up to its original bid or down to its original offer.\14\
---------------------------------------------------------------------------

    \12\ The term ``NBBO'' means the national best bid or offer as 
calculated by the Exchange based on market information received from 
OPRA. See Exchange Rule 100.
    \13\ See Exchange Rule 510.
    \14\ See Exchange Rule 529(b)(2)(i).
---------------------------------------------------------------------------

    If, during the Route Timer, the Exchange receives a new order or 
quote on the opposite side of the market from the initiating order that 
can be executed, the System will immediately execute the remaining 
contracts from the initiating order to the extent possible, provided 
that the execution price does not violate the current NBBO.\15\ 
Conversely, if during the Route Timer the Exchange receives orders or 
quotes on the same side of the market as the initiating order, such new 
orders or quotes will join the initiating order in the Route Timer.\16\
---------------------------------------------------------------------------

    \15\ Id.
    \16\ See Exchange Rule 529(b)(2)(iii).
---------------------------------------------------------------------------

    If at any point during the Route Timer the initiating order and all 
joining interest on the same side of the market is either traded in 
full or cancelled in full, the Route Timer will be terminated and 
normal trading will resume.\17\ In addition, if at any point during the 
Route Timer a change in the ABBO would allow all or part of the 
initiating order and any joining interest on the same side of the 
market to trade on the Exchange at the revised NBBO, the Route Timer 
will be terminated and normal trading will resume.\18\
---------------------------------------------------------------------------

    \17\ Id.
    \18\ Id.
---------------------------------------------------------------------------

    At the end of the Route Timer, the System will route Intermarket 
Sweep Orders \19\ representing the initiating order's remaining 
contracts to away markets disseminating the ABBO. The System will price 
the routed order at the opposite side ABBO with a size equal to the 
exchange's disseminated ABBO size as needed. If there are still 
additional contracts to be executed from the initiating order after the 
Intermarket Sweep Orders have been routed to the away markets 
disseminating the ABBO for the away markets' full size, the System will 
handle remaining interest from the initiating order in accordance with 
the provisions of Exchange Rule 515, Execution of Orders and 
Quotes.\20\
---------------------------------------------------------------------------

    \19\ See Exchange Rule 516(f).
    \20\ See Exchange Rule 529(b)(2)(iv).
---------------------------------------------------------------------------

    The Exchange also proposes to amend Rule 529(b)(2)(i) to correct 
the sentence which reads, ``[c]ontemporaneously with the start of the 
Timer, the System will broadcast a Route Notification to subscribers of 
the Exchange's data feeds. . . .'' The Exchange broadcasts the Route 
Notification on a single data feed, the AIS feed. Therefore, the 
Exchange proposes to amend the rule text to specifically identify the 
data feed by its name, the Administrative Information Subscriber 
(``AIS'') data feed.
    The Exchange also notes that other option exchanges offer similar 
functionality in their respective routing mechanisms. Those routing 
mechanisms (i) expose eligible initiating interest at the best price, 
(ii) contain an exposure period, the duration of which does not exceed 
one second, and (iii) route remaining interest to away markets at the 
conclusion of the exposure period.\21\ In particular, those routing 
mechanisms also expose their expected route price, which the Exchange 
is now proposing to expose as well pursuant to this proposed rule 
change. For example, BATS EDGX Exchange, Inc. (``BATS EDGX'') Rule 
21.18 provides for a Step Up Mechanism (``SUM'') which electronically 
exposes eligible orders at the NBBO price immediately upon receipt. As 
well, the BATS EDGX rule prescribes that the exposure period shall be 
for a period of time determined by the Exchange on a class-by-class 
basis, which period of time shall not exceed one second.\22\ Following 
the exposure period, BATS EDGX routes the remaining portion of the 
exposed order to other exchanges.\23\ Accordingly, pursuant to the 
proposed rule change, the Exchange is merely proposing to make 
available the same type of information about the order to be routed as 
is currently made available by other options exchanges.\24\
---------------------------------------------------------------------------

    \21\ See BATS EDGX Rule 21.18, Nasdaq PHLX Rule 1080(m)(iv)(B) 
and (C), and NYSE American Rule 994NY.
    \22\ See BATS EDGX 21.18(b)(1).
    \23\ See BATS EDGX 21.18(b)(4).
    \24\ See supra note 21.
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2. Statutory Basis
    MIAX believes that its proposed rule change is consistent with 
Section 6(b) of the Act \25\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act \26\ in particular, in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanisms of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78f(b).
    \26\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes the proposed changes 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 
because they seek to improve the accuracy of the Exchange's rules. In 
particular, the Exchange believes that the proposed rule changes will 
provide greater clarity to Members and the public regarding the 
Exchange's Rules, and it is in the public interest for rules to be 
accurate and concise so as to eliminate the potential for confusion.
    The Exchange believes that including the expected price to which 
the interest will be routed in the Route Notification message promotes 
just and equitable principles of trade and removes impediments to a 
free and open market by providing greater transparency concerning the 
operation of Exchange functionality. The Exchange also believes the 
proposal will contribute to

[[Page 46317]]

the protection of investors and the public interest by clarifying the 
Exchange's rules. The Exchange believes that additional clarity and 
transparency in the Exchange's rules will strengthen investor 
confidence in the market and facilitate fair competition among market 
participants. The Exchange notes that other option exchanges that offer 
similar functionality have similar rules in place.\27\
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    \27\ See supra note 21.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. Specifically, 
the Exchange believes the proposed rule change will not impose any 
burden on competition as the Exchange is merely providing supplemental 
information that may be derived by market participants independently. 
The Exchange's proposal does not substantively modify any Exchange 
functionality and is not designed to address any competitive issues, 
but rather to provide additional information in the Route Notification 
message and add further clarity to the Exchange's rules. Since the 
Exchange does not propose to substantively modify the operation of 
exchange functionality, the proposed rule change will not impose any 
burden on inter-market competition. Additionally, the Exchange does not 
believe the proposed rule change will impose any burden on intra-market 
competition as the Rules apply equally to all Exchange Members.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \28\ and Rule 19b-4(f)(6) \29\ 
thereunder.
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    \28\ 15 U.S.C. 78s(b)(3)(A).
    \29\ 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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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR- MIAX-2017-41 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-MIAX-2017-41. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-MIAX-2017-41 and should be 
submitted on or before October 25, 2017. For the Commission, by the 
Division of Trading and Markets, pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(12).

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-21278 Filed 10-3-17; 8:45 am]
 BILLING CODE 8011-01-P
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