Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX PEARL Rule 510 To Extend the Penny Pilot Program, 61622-61624 [2017-28079]
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61622
Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices
sradovich on DSK3GMQ082PROD with NOTICES
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–DTC–2017–004, SR–NSCC–
2017–005, or SR–FICC–2017–008 and
should be submitted on or before
January 18, 2018. If comments are
received, any rebuttal comments should
be submitted on or before February 1,
2018.
V. Accelerated Approval of the
Amended Proposed Rule Changes
The Commission finds good cause,
pursuant to Section 19(b)(2) of the
Act,66 to approve the Amended
Proposed Rule Changes prior to the 30th
day after the date of publication of
Amendment No. 6 in the Federal
Register.
As discussed more fully above, the
Commission finds that the Framework
could help Clearing Agencies to
withstand the liquidity risks that arise
in or are borne by the Clearing Agencies,
and to continue their critical operations
and services, which helps to promote
the prompt and accurate clearance and
settlement of securities transactions,
consistent with Section 17A(b)(3)(F) of
the Act.67 By maintaining liquidity
resources and monitoring sufficiency of
the available liquidity resources, the
Commission further finds that the
Framework is designed to help reduce
the possibility of the Clearing Agencies’
failure, as well as mitigate the risk of
financial loss contagion caused by the
Clearing Agencies’ failure. Therefore,
the Framework could help further
assure the safeguarding of securities and
funds which are in the custody or
control of the Clearing Agencies, or for
which they are responsible, consistent
with Section 17A(b)(3)(F).68
More specifically regarding
Amendment No. 6, the amendment
clarifies and modifies the Framework by
(1) providing more accurate descriptions
of DTC’s Collateral Monitor and Net
Debit Cap, (2) modifying and elaborating
on FICC and NSCC’s daily liquidity
stress testing to ensure that their
respective liquidity resources are
sufficient to meet the cash settlement
obligations of their respective largest
Affiliated Family of Members, and (3)
providing the analysis and escalation
process for liquidity shortfalls that are
identified through the daily testing with
respect to Level 2 and Level 3 Scenarios.
66 15
67 15
U.S.C. 78s(b)(2).
U.S.C. 78q–1(b)(3)(F).
68 Id.
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By providing more accurate
descriptions of DTC’s liquidity risk
management tools, Amendment No. 6
would help ensure that the DTC Rules
are transparent and clear, which would
help enable its Participants to better
identify and understand the risks they
incur by participating in DTC. In
addition, by providing additional detail
around FICC and NSCC’s daily liquidity
sufficiency testing, as well as the
analysis and escalation process for
liquidity shortfalls, Amendment No. 6
could help mitigate the risk that FICC
and NSCC would be unable to promptly
meet their settlement obligations due to
insufficient liquidity. By doing so, the
Commission finds that Amendment No.
6 could help FICC and NSCC to be in
a better position to withstand their
respective liquidity risks, thereby
promoting the prompt and accurate
clearance and settlement of securities,
consistent with Section 17A(b)(3)(F) of
the Act.69
Accordingly, the Commission finds
good cause for approving the Amended
Proposed Rule Changes on an
accelerated basis, pursuant to Section
19(b)(2) of the Act.70
VI. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule changes, as modified by
Amendment No. 1, 3, and 6 are
consistent with the requirements of the
Act and in particular with the
requirements of Section 17A of the
Act 71 and the rules and regulations
thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that the
proposed rule changes SR–DTC–2017–
004, SR–NSCC–2017–005, or SR–FICC–
2017–008 as modified by Amendment
Nos. 1, 3, and 6 be, and hereby are,
APPROVED on an accelerated basis.72
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.73
Eduardo Aleman,
Assistant Secretary.
[FR Doc. 2017–27997 Filed 12–27–17; 8:45 am]
BILLING CODE 8011–01–P
69 15
U.S.C. 78q–1(b)(3)(F).
U.S.C. 78s(b)(2).
71 15 U.S.C. 78q–1.
72 In approving the Amended Proposed Rule
Changes, the Commission considered the proposals’
impact on efficiency, competition and capital
formation. 15 U.S.C. 78c(f).
73 17 CFR 200.30–3(a)(12).
70 15
PO 00000
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82391; File No. SR–
PEARL–2017–39]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend MIAX PEARL
Rule 510 To Extend the Penny Pilot
Program
December 22, 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 December 11, 2017, MIAX PEARL
LLC (‘‘MIAX PEARL’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend Exchange Rule 510,
Interpretations and Policies .01 to
extend the pilot program for the quoting
and trading of certain options in
pennies.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/pearl, at MIAX PEARL’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.
1 15
2 17
E:\FR\FM\28DEN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
sradovich on DSK3GMQ082PROD with NOTICES
1. Purpose
The Exchange is a participant in an
industry-wide pilot program that
provides for the quoting and trading of
certain option classes in penny
increments (the ‘‘Penny Pilot Program’’
or ‘‘Program’’). The Penny Pilot Program
allows the quoting and trading of certain
option classes in minimum increments
of $0.01 for all series in such option
classes with a price of less than $3.00;
and in minimum increments of $0.05 for
all series in such option classes with a
price of $3.00 or higher. Options
overlying the PowerShares QQQTM
(‘‘QQQ’’), SPDR® S&P 500® ETF
(‘‘SPY’’), and iShares® Russell 2000 ETF
(‘‘IWM’’), however, are quoted and
traded in minimum increments of $0.01
for all series regardless of the price. The
Penny Pilot Program was initiated at the
then existing option exchanges in
January 2007 3 and currently includes
more than 300 of the most active option
classes. The Penny Pilot Program is
currently scheduled to expire on
December 31, 2017.4 The purpose of the
proposed rule change is to extend the
Penny Pilot Program in its current
format through June 30, 2018.
In addition to the extension of the
Penny Pilot Program through June 30,
2018, the Exchange proposes to extend
one other date in the Rule. Currently,
Interpretations and Policies .01 states
that the Exchange will replace any
Penny Pilot issues that have been
delisted with the next most actively
traded multiply listed option classes
that are not yet included in the Penny
Pilot Program, and that the replacement
issues will be selected based on trading
activity in the previous six months.
Such option classes will be added to the
Penny Pilot Program on the second
trading day following July 1, 2017.5
3 See Securities Exchange Act Release Nos. 55154
(January 23, 2007), 72 FR 4743 (February 1, 2007)
(SR–CBOE–2006–92); 55161 (January 24, 2007), 72
FR 4754 (February 1, 2007) (SR–ISE–2006–62);
54886 (December 6, 2006), 71 FR 74979 (December
13, 2006) (SR–Phlx–2006–74); 54590 (October 12,
2006), 71 FR 61525 (October 18, 2006) (SR–
NYSEArca–2006–73); and 54741 (November 9,
2006), 71 FR 67176 (November 20, 2006) (SR–
Amex–2006–106).
4 See Securities Exchange Act Release No. 80758
(May 24, 2017), 82 FR 25022 (May 31, 2017) (SR–
PEARL–2017–24) (extending the Penny Pilot
Program to December 31, 2017).
5 The month immediately preceding a
replacement class’s addition to the Pilot Program
(i.e., June) is not used for purposes of the six-month
analysis. For example, a replacement added on the
second trading day following January 1, 2018, will
be identified based on trading activity from June 1,
2017, through November 30, 2017.
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Because this date has expired and the
Exchange intends to continue this
practice for the duration of the Penny
Pilot Program, the Exchange is
proposing to amend the Rule to reflect
that such option classes will be added
to the Penny Pilot Program on the
second trading day following January 1,
2018.
The purpose of this provision is to
reflect the new date on which
replacement issues may be added to the
Penny Pilot Program.
2. Statutory Basis
MIAX PEARL believes that its
proposed rule change is consistent with
Section 6(b) of the Act 6 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 7 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to and perfect the
mechanisms of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
In particular, the proposed rule
change, which extends the Penny Pilot
Program for six months, allows the
Exchange to continue to participate in a
program that has been viewed as
beneficial to traders, investors and
public customers and viewed as
successful by the other options
exchanges participating in it.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. Specifically,
the Exchange believes that, by extending
the expiration of the Pilot Program, the
proposed rule change will allow for
further analysis of the Penny Pilot
Program and a determination of how the
Program should be structured in the
future. In doing so, the proposed rule
change will also serve to promote
regulatory clarity and consistency,
thereby reducing burdens on the
marketplace, facilitating investor
protection, and fostering a competitive
environment. In addition, consistent
with previous practices, the Exchange
believes the other options exchanges
will be filing similar extensions of the
Penny Pilot Program.
6 15
7 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00091
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61623
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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 8 and Rule
19b–4(f)(6) thereunder.9 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
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 10 normally does not
become operative prior to 30 days after
the date of the filing.11 However,
pursuant to Rule 19b–4(f)(6)(iii),12 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because doing so will allow the Pilot
Program to continue without
interruption in a manner that is
consistent with the Commission’s prior
approval of the extension and expansion
of the Pilot Program and will allow the
Exchange and the Commission
additional time to analyze the impact of
the Pilot Program.13 Accordingly, the
8 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s 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. The
Exchange has satisfied this pre-filing requirement.
12 17 CFR 240.19b–4(f)(6)(iii).
13 See Securities Exchange Act Release No. 61061
(November 24, 2009), 74 FR 62857 (December 1,
2009) (SR–NYSEArca–2009–44).
9 17
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Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices
Commission designates the proposed
rule change as operative upon filing
with the Commission.14
At any time within 60 days of the
filing of such 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
under Section 19(b)(2)(B) 15 of the Act to
determine whether the proposed rule
change 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:
sradovich on DSK3GMQ082PROD with NOTICES
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–
PEARL–2017–39 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–PEARL–2017–39. 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 website (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 website viewing and
14 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
15 15 U.S.C. 78s(b)(2)(B).
VerDate Sep<11>2014
18:14 Dec 27, 2017
Jkt 244001
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–PEARL–2017–39 and
should be submitted on or before
January 18, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–28079 Filed 12–27–17; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82386; File No. SR–FICC–
2017–023]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Eliminate
the Development Fees From the
Mortgage-Backed Securities Division
Clearing Rules
December 21, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
19, 2017, Fixed Income Clearing
Corporation (‘‘FICC’’) 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 clearing agency. FICC filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
16 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)(2).
1 15
Frm 00092
Fmt 4703
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the
clearing agency 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
clearing agency has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
BILLING CODE 8011–01–P
PO 00000
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
the elimination of the Development Fees
from the Fee Schedule in the FICC
Mortgage-Backed Securities Division
(‘‘MBSD’’) Clearing Rules (‘‘MBSD
Rules’’),5 as described in greater detail
below.
Sfmt 4703
1. Purpose
On December 30, 2014, FICC filed
proposed rule change SR–FICC–2014–
12 6 with the Commission to amend the
MBSD Rules to include fees to cover the
development cost of the MBSD novation
service (‘‘Development Fees’’).7 The
filing stated that Clearing Members
would be assessed the Development
Fees as of January 1, 2015 and such fees
would remain in effect for three (3)
consecutive years.8 Because the
Development Fees will have been in
place for three (3) consecutive years as
of December 31, 2017, and FICC has
used the Development Fees to develop
the operational aspect of the MBSD
novation service,9 FICC is proposing to
5 Capitalized terms not defined herein are defined
in the MBSD Rules, available at https://
www.dtcc.com/legal/rules-and-procedures.
6 See Securities Exchange Act Release No. 74033
(January 12, 2015), 80 FR 2452 (January 16, 2015)
(SR–FICC–2014–12).
7 Id. at 2453.
8 Id.
9 See Securities Exchange Act Release No. 80716
(May 18, 2017), 82 FR 23852 (May 24, 2017) (SR–
FICC–2017–012). Specifically, the purpose of the
rule filing SR–FICC–2017–012 was to amend the
MBSD Rules to (1) move the time that FICC treats
itself as the settlement counterparty for SBODestined Trades to the time of trade comparison,
which is earlier in the lifecycle of the trade, (2)
move the time that FICC novates and treats itself as
the settlement counterparty for Trade-for-Trade
Transactions to the time of trade comparison, which
is earlier in the lifecycle of the trade, (3) novate and
establish FICC as the settlement counterparty at the
time of trade comparison for Specified Pool Trades,
and (4) guarantee and novate Stipulated Trades, a
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]]>Agencies
[Federal Register Volume 82, Number 248 (Thursday, December 28, 2017)]
[Notices]
[Pages 61622-61624]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-28079]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82391; File No. SR-PEARL-2017-39]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX
PEARL Rule 510 To Extend the Penny Pilot Program
December 22, 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 December 11, 2017, MIAX PEARL LLC (``MIAX
PEARL'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend Exchange Rule 510,
Interpretations and Policies .01 to extend the pilot program for the
quoting and trading of certain options in pennies.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/pearl, at MIAX
PEARL'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.
[[Page 61623]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is a participant in an industry-wide pilot program
that provides for the quoting and trading of certain option classes in
penny increments (the ``Penny Pilot Program'' or ``Program''). The
Penny Pilot Program allows the quoting and trading of certain option
classes in minimum increments of $0.01 for all series in such option
classes with a price of less than $3.00; and in minimum increments of
$0.05 for all series in such option classes with a price of $3.00 or
higher. Options overlying the PowerShares QQQTM (``QQQ''),
SPDR[supreg] S&P 500[supreg] ETF (``SPY''), and iShares[supreg] Russell
2000 ETF (``IWM''), however, are quoted and traded in minimum
increments of $0.01 for all series regardless of the price. The Penny
Pilot Program was initiated at the then existing option exchanges in
January 2007 \3\ and currently includes more than 300 of the most
active option classes. The Penny Pilot Program is currently scheduled
to expire on December 31, 2017.\4\ The purpose of the proposed rule
change is to extend the Penny Pilot Program in its current format
through June 30, 2018.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release Nos. 55154 (January 23,
2007), 72 FR 4743 (February 1, 2007) (SR-CBOE-2006-92); 55161
(January 24, 2007), 72 FR 4754 (February 1, 2007) (SR-ISE-2006-62);
54886 (December 6, 2006), 71 FR 74979 (December 13, 2006) (SR-Phlx-
2006-74); 54590 (October 12, 2006), 71 FR 61525 (October 18, 2006)
(SR-NYSEArca-2006-73); and 54741 (November 9, 2006), 71 FR 67176
(November 20, 2006) (SR-Amex-2006-106).
\4\ See Securities Exchange Act Release No. 80758 (May 24,
2017), 82 FR 25022 (May 31, 2017) (SR-PEARL-2017-24) (extending the
Penny Pilot Program to December 31, 2017).
---------------------------------------------------------------------------
In addition to the extension of the Penny Pilot Program through
June 30, 2018, the Exchange proposes to extend one other date in the
Rule. Currently, Interpretations and Policies .01 states that the
Exchange will replace any Penny Pilot issues that have been delisted
with the next most actively traded multiply listed option classes that
are not yet included in the Penny Pilot Program, and that the
replacement issues will be selected based on trading activity in the
previous six months. Such option classes will be added to the Penny
Pilot Program on the second trading day following July 1, 2017.\5\
Because this date has expired and the Exchange intends to continue this
practice for the duration of the Penny Pilot Program, the Exchange is
proposing to amend the Rule to reflect that such option classes will be
added to the Penny Pilot Program on the second trading day following
January 1, 2018.
---------------------------------------------------------------------------
\5\ The month immediately preceding a replacement class's
addition to the Pilot Program (i.e., June) is not used for purposes
of the six-month analysis. For example, a replacement added on the
second trading day following January 1, 2018, will be identified
based on trading activity from June 1, 2017, through November 30,
2017.
---------------------------------------------------------------------------
The purpose of this provision is to reflect the new date on which
replacement issues may be added to the Penny Pilot Program.
2. Statutory Basis
MIAX PEARL believes that its proposed rule change is consistent
with Section 6(b) of the Act \6\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \7\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to and perfect the
mechanisms of a free and open market and a national market system and,
in general, to protect investors and the public interest.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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In particular, the proposed rule change, which extends the Penny
Pilot Program for six months, allows the Exchange to continue to
participate in a program that has been viewed as beneficial to traders,
investors and public customers and viewed as successful by the other
options exchanges participating in it.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Specifically, the Exchange
believes that, by extending the expiration of the Pilot Program, the
proposed rule change will allow for further analysis of the Penny Pilot
Program and a determination of how the Program should be structured in
the future. In doing so, the proposed rule change will also serve to
promote regulatory clarity and consistency, thereby reducing burdens on
the marketplace, facilitating investor protection, and fostering a
competitive environment. In addition, consistent with previous
practices, the Exchange believes the other options exchanges will be
filing similar extensions of the Penny Pilot Program.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally
does not become operative prior to 30 days after the date of the
filing.\11\ However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the
Commission may designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because doing so will allow the Pilot Program to continue without
interruption in a manner that is consistent with the Commission's prior
approval of the extension and expansion of the Pilot Program and will
allow the Exchange and the Commission additional time to analyze the
impact of the Pilot Program.\13\ Accordingly, the
[[Page 61624]]
Commission designates the proposed rule change as operative upon filing
with the Commission.\14\
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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. The
Exchange has satisfied this pre-filing requirement.
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ See Securities Exchange Act Release No. 61061 (November 24,
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
\14\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such 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 under
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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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- PEARL-2017-39 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-PEARL-2017-39. 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 website (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 website 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-PEARL-2017-39 and should be submitted on
or before January 18, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-28079 Filed 12-27-17; 8:45 am]
BILLING CODE 8011-01-P
