Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 723 To Remove Obsolete Rule Text, 50201-50203 [2017-23483]
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Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices
All submissions should refer to File
Number SR–NASDAQ–2017–107. 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NASDAQ–2017–107 and
should be submitted on or before
November 20, 2017.
notice is hereby given that on October
17, 2017, Nasdaq MRX, LLC (‘‘MRX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Eduardo A. Aleman,
Assistant Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2017–23478 Filed 10–27–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81934; File No. SR–MRX–
2017–22]
sradovich on DSK3GMQ082PROD with NOTICES
Self-Regulatory Organizations; Nasdaq
MRX, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 723 To
Remove Obsolete Rule Text
October 24, 2017.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
20 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
17:59 Oct 27, 2017
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.
1. Purpose
The Exchange proposes to amend
Rule 723 (Price Improvement
Mechanism for Crossing Transactions)
to remove obsolete rule text.
Rule 723 sets forth the requirements
for the PIM, which was adopted as part
of the Exchange’s application to be
registered as a national securities
exchange.3 Certain aspects of PIM were
adopted on a pilot basis (‘‘Pilot’’);
specifically, the termination of the
exposure period by unrelated orders,
and no minimum size requirement of
orders eligible for PIM. The Pilot
expired on January 18, 2017.
On December 12, 2016, the Exchange
filed with the Commission a proposed
rule change to make the Pilot
3 See Securities Exchange Act Release No. 76998
(January 29, 2016), 81 FR 6066 (February 4, 2016)
(File No. 10–221).
1 15
VerDate Sep<11>2014
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 723 (Price Improvement
Mechanism for Crossing Transactions)
to remove obsolete rule text.
The text of the proposed rule change
is available on the Exchange’s Web site
at www.ise.com, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
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50201
permanent, and also to change the
requirements for providing price
improvement for Agency Orders of less
than 50 option contracts (other than
auctions involving Complex Orders)
where the National Best Bid and Offer
(‘‘NBBO’’) is only $0.01 wide.4 The
Commission approved this proposal on
January 18, 2017.5
In modifying the requirements for
price improvement for Agency Orders of
less than 50 contracts, the Exchange
proposed to amend Rule 723(b) to
require Electronic Access Members to
provide at least $0.01 price
improvement for an Agency Order if
that order is for less than 50 contracts
and if the difference between the NBBO
is $0.01.
The Exchange adopted a member
conduct standard to implement this
requirement during the time pursuant to
which ISE Mercury symbols were
migrating from the ISE Mercury
platform to the Nasdaq INET platform.
At the time it proposed the member
conduct standard, the Exchange
anticipated that the migration to the
Nasdaq platform would be complete on
or before September 15, 2017.
Accordingly, Rule 723(b) stated that, for
the period beginning January 19, 2017
until a date specified by the Exchange
in a Regulatory Information Circular,
which date shall be no later than
September 15, 2017, if the Agency Order
is for less than 50 option contracts, and
if the difference between the NBBO is
$0.01, an Electronic Access Member
shall not enter a Crossing Transaction
unless such Crossing Transaction is
entered at one minimum price
improvement increment better than the
NBBO on the opposite side of the
market from the Agency Order, and
better than the limit order or quote on
the Nasdaq MRX order book on the
same side of the Agency Order. This
requirement applied regardless of
whether the Agency Order is for the
account of a public customer, or where
the Agency Order is for the account of
4 See Securities Exchange Act Release No. 79539
(December 13, 2016), 81 FR 91982 (December 19,
2016) (SR–ISEMercury–2016–25). The Exchange
notes that, on April 3, 2017, ISE Mercury, LLC was
renamed Nasdaq MRX, LLC to reflect its new
placement within the Nasdaq, Inc. corporate
structure in connection with the March 9, 2016
acquisition by Nasdaq of the capital stock of U.S.
Exchange Holdings, and the indirect acquisition all
of the interests of the International Securities
Exchange, LLC, ISE Gemini, LLC and ISE Mercury,
LLC. See Securities Exchange Act Release No.
80326 (March 29, 2017), 82 FR 16460 (April 4,
2017) (SR–ISEMercury–2017–05).
5 See Securities Exchange Act Release No. 79841
(January 18, 2017), 82 FR 8452 (January 25, 2017)
(SR–ISEMercury–2016–25).
E:\FR\FM\30OCN1.SGM
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50202
Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices
a broker dealer or any other person or
entity that is not a Public Customer.6
In adopting the price improvement
requirement for Agency Orders of less
than 50 contracts, the Exchange also
proposed to amend Rule 723(b) to adopt
a systems-based mechanism to
implement this requirement, which
shall be effective following the
migration of a symbol to the Nasdaq
INET platform. Under this provision, if
the Agency Order is for less than 50
option contracts, and if the difference
between the NBBO is $0.01, the
Crossing Transaction must be entered at
one minimum price improvement
increment better than the NBBO on the
opposite side of the market from the
Agency Order and better than the limit
order or quote on the Nasdaq MRX order
book on the same side of the Agency
Order.
By September 15, 2017, the Exchange
had completed the migration of symbols
to the Nasdaq INET platform, and
adopted the corresponding systemsbased mechanism for enforcing the price
improvement requirement where the
Agency Order is for less than 50 option
contracts, and if the difference between
the NBBO is $0.01. Accordingly, the
Exchange is now proposing to delete the
rule text in Rule 723 that implements
the member conduct standard.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with section 6(b)
of the Act,7 in general, and furthers the
sradovich on DSK3GMQ082PROD with NOTICES
6 Nasdaq
ISE, LLC (‘‘ISE’’) filed a proposed rule
change at the same time as the Exchange to adopt
the same price improvement requirement. To
enforce this requirement, ISE also amended its Rule
1614 (Imposition of Fines for Minor Rule
Violations). Specifically, ISE added Rule 1614(d)(4),
which provides that any Member who enters an
order into PIM for less than 50 contracts, while the
National Best Bid or Offer spread is $0.01, must
provide price improvement of at least one
minimum price improvement increment better than
the NBBO on the opposite side of the market from
the Agency Order, which increment may not be
smaller than $0.01. Failure to provide such price
improvement will result in members being subject
to the following fines: $500 for the second offense,
$1,000 for the third offense, and $2,500 for the
fourth offense. Subsequent offenses will subject the
member to formal disciplinary action. The
Exchange will review violations on a monthly cycle
to assess these violations. This provision was to be
in effect for the period beginning January 19, 2017
until a date specified by the Exchange in a
Regulatory Information Circular, which date shall
be no later than until September 15, 2017. The
Exchange incorporated this provision by reference.
See MRX Chapter 16 (Discipline).
Contemporaneous with this proposal, ISE is now
submitting a filing to remove the member conduct
standard for its price improvement rule and the
corresponding provision in Rule 1614 for violations
of that standard. As such, MRX will no longer
incorporate this provision of Rule 1614 by
reference.
7 15 U.S.C. 78f(b).
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17:59 Oct 27, 2017
Jkt 244001
objectives of section 6(b)(5) of the Act,8
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest. The
Exchange believes this proposal is
consistent with the Act because it
removes language that implements the
member conduct standard where the
Agency Order is for less than 50 option
contracts, and if the difference between
the NBBO is $0.01. As noted above, this
standard has become obsolete with the
migration of all symbols to the Nasdaq
INET system and the corresponding
adoption of the systems-based
mechanism for enforcing that
requirement, which was previously
approved by the Commission.9
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act, as the rule
text to be removed has become obsolete
with the migration of all symbols to the
Nasdaq INET system and the
corresponding adoption of the systemsbased mechanism for enforcing the price
improvement requirement where the
Agency Order is for less than 50 option
contracts, and if the differences between
the NBBO is $0.01.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not (i) significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to section
19(b)(3)(A) of the Act 10 and Rule 19b–
4(f)(6) thereunder.11
8 15
U.S.C. 78f(b)(5).
9 See supra note 5.
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of the proposed rule
PO 00000
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A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 12 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 13
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay so that the proposed
rule change may become operative upon
filing. The Exchange states that waiver
of the operative delay will allow the
Exchange to remove the obsolete rule
text immediately, minimizing potential
investor confusion. The Commission
believes the waiver of the operative
delay is consistent with the protection
of investors and the public interest.
Accordingly, the Commission hereby
waives the operative delay and
designates the proposed rule change
operative upon filing.14
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–
MRX–2017–22 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
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.
12 17 CFR 240.19b–4(f)(6).
13 17 CFR 240.19b–4(f)(6)(iii).
14 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices
All submissions should refer to File
Number SR–MRX–2017–22. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–MRX–2017–22, and should
be submitted on or before November 20,
2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017–23483 Filed 10–27–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
sradovich on DSK3GMQ082PROD with NOTICES
[Release No. 34–81937; File No. SR–
BatsEDGX–2017–40]
Self-Regulatory Organizations; Bats
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Make
Technical Corrections to Its Second
Amended and Restated Certificate of
Incorporation
October 24, 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 October
13, 2017, Bats EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange seeks to amend its
Second Amended and Restated
Certificate of Incorporation. The text of
the proposed rule change is provided
below.
(additions are italicized; deletions are
[bracketed])
*
*
*
*
*
Second Amended and Restated
Certificate of Incorporation of Bats
EDGX Exchange, Inc.
The name of the corporation is Bats
EDGX Exchange, Inc. The corporation
filed its original Certificate of
Incorporation with the Secretary of State
of the State of Delaware on March 9,
2009 under the name EDGX Exchange,
Inc. This Second Amended and Restated
Certificate of Incorporation of the
corporation, which restates and
integrates and also further amends the
provisions of the corporation’s Restated
Certificate of Incorporation, was duly
adopted in accordance with the
provisions of Sections 242 and 245 of
the General Corporation Law of the
State of Delaware and by the written
consent of its sole stockholder in
accordance with Section 228 of the
General Corporation Law of the State of
Delaware. The [Second Amended and]
Restated Certificate of Incorporation of
the corporation is hereby amended,
integrated and restated to read in its
entirety as follows:
*
*
*
*
*
The text of the proposed rule change
is available at the Exchange’s Web site
at www.bats.com, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
CFR 200.30–3(a)(12).
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17:59 Oct 27, 2017
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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 parts of such
statements.
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
EDGX recently amended its Restated
Certificate of Incorporation in
connection with a corporate transaction
(the ‘‘Transaction’’) involving, among
other things, the recent acquisition of
EDGX, along with Bats BYX Exchange,
Inc. (‘‘Bats BYX’’), Bats BZX Exchange,
Inc. (‘‘Bats BZX’’), and Bats EDGA
Exchange, Inc. (‘‘Bats EDGA’’ and,
together with Bats EDGX, Bats BYX, and
Bats BZX, the ‘‘Bats Exchanges’’) by
CBOE Holdings, Inc. (‘‘CBOE
Holdings’’). CBOE Holdings is also the
parent of Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’) and
C2 Options Exchange, Incorporated
(‘‘C2’’). Particularly, the filing proposed,
among other things, to amend and
restate the certificate of incorporation of
the Exchange based on certificates of
incorporation of CBOE and C2.3 The
Exchange notes that in conforming the
Exchange’s Certificate to the certificates
of CBOE and C2, it inadvertently (1) did
not comply with a provision of
Delaware law and (ii) referred to an
inaccurate version of the Certificate in
the introductory paragraph. The
Exchange seeks to correct those errors.
Particularly, Section 245(c) of the
Delaware General Corporation Law
(DGCL) requires that a restated
certificate of incorporation ‘‘shall state,
either in its heading or in an
introductory paragraph, the
corporation’s present name, and, if it
has been changed, the name under
which it was originally incorporated,
and the date of filing of its original
certificate of incorporation with the
secretary of state.’’ The Exchange notes
that the conformed Certificate did not
reference the name under which the
corporation was originally incorporated
(i.e., ‘‘EDGX Exchange, Inc.’’). In order
to comply with Section 245(c) of the
DGCL, the Exchange proposes to amend
its Certificate to add a reference to its
original name.
3 See Securities Exchange Act Release No. 81503
(August 30, 2017), 82 FR 42153 (September 6, 2017)
(SR–BatsEDGX–2017–35).
1 15
15 17
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]]>Agencies
[Federal Register Volume 82, Number 208 (Monday, October 30, 2017)]
[Notices]
[Pages 50201-50203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23483]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81934; File No. SR-MRX-2017-22]
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 723
To Remove Obsolete Rule Text
October 24, 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 October 17, 2017, Nasdaq MRX, LLC (``MRX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 723 (Price Improvement
Mechanism for Crossing Transactions) to remove obsolete rule text.
The text of the proposed rule change is available on the Exchange's
Web site at www.ise.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 723 (Price Improvement
Mechanism for Crossing Transactions) to remove obsolete rule text.
Rule 723 sets forth the requirements for the PIM, which was adopted
as part of the Exchange's application to be registered as a national
securities exchange.\3\ Certain aspects of PIM were adopted on a pilot
basis (``Pilot''); specifically, the termination of the exposure period
by unrelated orders, and no minimum size requirement of orders eligible
for PIM. The Pilot expired on January 18, 2017.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 76998 (January 29,
2016), 81 FR 6066 (February 4, 2016) (File No. 10-221).
---------------------------------------------------------------------------
On December 12, 2016, the Exchange filed with the Commission a
proposed rule change to make the Pilot permanent, and also to change
the requirements for providing price improvement for Agency Orders of
less than 50 option contracts (other than auctions involving Complex
Orders) where the National Best Bid and Offer (``NBBO'') is only $0.01
wide.\4\ The Commission approved this proposal on January 18, 2017.\5\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 79539 (December 13,
2016), 81 FR 91982 (December 19, 2016) (SR-ISEMercury-2016-25). The
Exchange notes that, on April 3, 2017, ISE Mercury, LLC was renamed
Nasdaq MRX, LLC to reflect its new placement within the Nasdaq, Inc.
corporate structure in connection with the March 9, 2016 acquisition
by Nasdaq of the capital stock of U.S. Exchange Holdings, and the
indirect acquisition all of the interests of the International
Securities Exchange, LLC, ISE Gemini, LLC and ISE Mercury, LLC. See
Securities Exchange Act Release No. 80326 (March 29, 2017), 82 FR
16460 (April 4, 2017) (SR-ISEMercury-2017-05).
\5\ See Securities Exchange Act Release No. 79841 (January 18,
2017), 82 FR 8452 (January 25, 2017) (SR-ISEMercury-2016-25).
---------------------------------------------------------------------------
In modifying the requirements for price improvement for Agency
Orders of less than 50 contracts, the Exchange proposed to amend Rule
723(b) to require Electronic Access Members to provide at least $0.01
price improvement for an Agency Order if that order is for less than 50
contracts and if the difference between the NBBO is $0.01.
The Exchange adopted a member conduct standard to implement this
requirement during the time pursuant to which ISE Mercury symbols were
migrating from the ISE Mercury platform to the Nasdaq INET platform. At
the time it proposed the member conduct standard, the Exchange
anticipated that the migration to the Nasdaq platform would be complete
on or before September 15, 2017. Accordingly, Rule 723(b) stated that,
for the period beginning January 19, 2017 until a date specified by the
Exchange in a Regulatory Information Circular, which date shall be no
later than September 15, 2017, if the Agency Order is for less than 50
option contracts, and if the difference between the NBBO is $0.01, an
Electronic Access Member shall not enter a Crossing Transaction unless
such Crossing Transaction is entered at one minimum price improvement
increment better than the NBBO on the opposite side of the market from
the Agency Order, and better than the limit order or quote on the
Nasdaq MRX order book on the same side of the Agency Order. This
requirement applied regardless of whether the Agency Order is for the
account of a public customer, or where the Agency Order is for the
account of
[[Page 50202]]
a broker dealer or any other person or entity that is not a Public
Customer.\6\
---------------------------------------------------------------------------
\6\ Nasdaq ISE, LLC (``ISE'') filed a proposed rule change at
the same time as the Exchange to adopt the same price improvement
requirement. To enforce this requirement, ISE also amended its Rule
1614 (Imposition of Fines for Minor Rule Violations). Specifically,
ISE added Rule 1614(d)(4), which provides that any Member who enters
an order into PIM for less than 50 contracts, while the National
Best Bid or Offer spread is $0.01, must provide price improvement of
at least one minimum price improvement increment better than the
NBBO on the opposite side of the market from the Agency Order, which
increment may not be smaller than $0.01. Failure to provide such
price improvement will result in members being subject to the
following fines: $500 for the second offense, $1,000 for the third
offense, and $2,500 for the fourth offense. Subsequent offenses will
subject the member to formal disciplinary action. The Exchange will
review violations on a monthly cycle to assess these violations.
This provision was to be in effect for the period beginning January
19, 2017 until a date specified by the Exchange in a Regulatory
Information Circular, which date shall be no later than until
September 15, 2017. The Exchange incorporated this provision by
reference. See MRX Chapter 16 (Discipline). Contemporaneous with
this proposal, ISE is now submitting a filing to remove the member
conduct standard for its price improvement rule and the
corresponding provision in Rule 1614 for violations of that
standard. As such, MRX will no longer incorporate this provision of
Rule 1614 by reference.
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In adopting the price improvement requirement for Agency Orders of
less than 50 contracts, the Exchange also proposed to amend Rule 723(b)
to adopt a systems-based mechanism to implement this requirement, which
shall be effective following the migration of a symbol to the Nasdaq
INET platform. Under this provision, if the Agency Order is for less
than 50 option contracts, and if the difference between the NBBO is
$0.01, the Crossing Transaction must be entered at one minimum price
improvement increment better than the NBBO on the opposite side of the
market from the Agency Order and better than the limit order or quote
on the Nasdaq MRX order book on the same side of the Agency Order.
By September 15, 2017, the Exchange had completed the migration of
symbols to the Nasdaq INET platform, and adopted the corresponding
systems-based mechanism for enforcing the price improvement requirement
where the Agency Order is for less than 50 option contracts, and if the
difference between the NBBO is $0.01. Accordingly, the Exchange is now
proposing to delete the rule text in Rule 723 that implements the
member conduct standard.
2. Statutory Basis
The Exchange believes that its proposal is consistent with section
6(b) of the Act,\7\ in general, and furthers the objectives of section
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
The Exchange believes this proposal is consistent with the Act because
it removes language that implements the member conduct standard where
the Agency Order is for less than 50 option contracts, and if the
difference between the NBBO is $0.01. As noted above, this standard has
become obsolete with the migration of all symbols to the Nasdaq INET
system and the corresponding adoption of the systems-based mechanism
for enforcing that requirement, which was previously approved by the
Commission.\9\
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ See supra note 5.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act, as the rule text to be removed
has become obsolete with the migration of all symbols to the Nasdaq
INET system and the corresponding adoption of the systems-based
mechanism for enforcing the price improvement requirement where the
Agency Order is for less than 50 option contracts, and if the
differences between the NBBO is $0.01.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change does not (i) significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to section
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \12\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \13\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposed rule change may become operative upon filing. The Exchange
states that waiver of the operative delay will allow the Exchange to
remove the obsolete rule text immediately, minimizing potential
investor confusion. The Commission believes the waiver of the operative
delay is consistent with the protection of investors and the public
interest. Accordingly, the Commission hereby waives the operative delay
and designates the proposed rule change operative upon filing.\14\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. 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 [email protected]. Please include
File Number SR-MRX-2017-22 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
[[Page 50203]]
All submissions should refer to File Number SR-MRX-2017-22. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-MRX-2017-22, and should be
submitted on or before November 20, 2017.
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\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-23483 Filed 10-27-17; 8:45 am]
BILLING CODE 8011-01-P
