Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 403, Withdrawal of Approval of Underlying Securities, 10538-10540 [2018-04792]
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10538
Federal Register / Vol. 83, No. 47 / Friday, March 9, 2018 / Notices
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 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–IEX–2018–05, and should
be submitted on or before March 30,
2018.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
Eduardo A. Aleman,
Assistant Secretary.
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–
IEX–2018–05 on the subject line.
amozie on DSK30RV082PROD with NOTICES
operative delay. The Exchange stated
that waiver of the operative delay is
consistent with the protection of
investors and the public interest
because it would allow the Exchange to
implement the proposed rule change
upon effectiveness, thus immediately
increasing transparency and creating
consistency regarding the rules
governing clearly erroneous executions
among Primary Listing Exchanges. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission hereby waives the
operative delay and designates the
proposal as operative upon filing.28
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.
SECURITIES AND EXCHANGE
COMMISSION
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–IEX–2018–05. 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
28 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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16:47 Mar 08, 2018
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[FR Doc. 2018–04793 Filed 3–8–18; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–82814; File No. SR–MIAX–
2018–07]
Self-Regulatory Organizations; Miami
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Exchange Rule 403,
Withdrawal of Approval of Underlying
Securities
March 6, 2018.
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 February 21, 2018, Miami
International Securities Exchange, LLC
(‘‘MIAX Options’’ or the ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I, II, and III below, which Items
29 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.b–4.
1 15
PO 00000
Frm 00116
Fmt 4703
Sfmt 4703
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 403, Withdrawal
of Approval of Underlying Securities, to
allow the Exchange to delist an option
class if open for trading on another
national securities exchange, and to not
open for trading or restrict securities
with open interest to closing
transactions, if open for trading solely
on the Exchange.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/ at MIAX Options’ 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 seeks to amend Rule
403 to add Interpretations and Policies
.02, to allow the Exchange to delist an
option class if it is open for trading on
another securities exchange; restrict
option series to closing transactions
when an option class is open for trading
solely on the Exchange and the
underlying security continues to meet
the requirements for approval; restrict
series with open interest to closing
transactions, provided that, opening
transactions by Market Makers executed
to accommodate closing transactions of
other market participants may be
permitted; and to delist the option class
when all series within that class have
expired. The Exchange believes the
ability to restrict option series to closing
transactions when an option class is
E:\FR\FM\09MRN1.SGM
09MRN1
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Federal Register / Vol. 83, No. 47 / Friday, March 9, 2018 / Notices
open for trading solely on the Exchange
and the underlying security continues to
meet the requirements for approval will
allow the Exchange to delist option
series in a timely and efficient manner.
The Exchange believes the proposed
rule amendment is necessary in
connection with the listing and trading
of option classes that are open for
trading solely on the Exchange,
including, but not limited to,
exclusively listed cash-settled index
option products.3 The proposed rule
change is based on a proposal recently
submitted by Cboe Exchange, Inc.
(‘‘Cboe’’).4
Currently, whenever the Exchange
determines that an underlying security
previously approved for Exchange
options transactions does not meet the
then current requirements for
continuance of such approval or for any
other reason should no longer be
approved, the Exchange will not open
for trading any additional series of
options of the class covering that
underlying security and may prohibit
any opening transactions in series of
options of that class previously opened
(except that opening transactions by
Market Makers executed to
accommodate closing transactions of
other market participants may be
permitted). The Exchange seeks to add
Interpretations and Policies .02 to
provide that when an option class is
trading on another exchange, MIAX
Options may delist such option class
immediately, regardless of whether the
option class continues to meet the
requirements for approval. When an
option class that no longer meets the
requirements for approval is trading
solely on the Exchange, the Exchange
may not add any additional series, may
restrict series with open interest to
closing transactions, and may delist any
series without open interest. However,
when an option class continues to meet
the requirements for approval and is
trading solely on the Exchange, the
Exchange may not restrict series with
open interest to closing transactions;
instead, the Exchange may only delist
series with no open interest and
determine to not open for trading any
additional series in that option class,
and may delist the option class when all
series within that class have expired.
There are various business reasons
why the Exchange may choose to no
longer list an option class (e.g., lack of
trading interest, lack of market-making
3 See
Securities Exchange Act Release No. 81371
(August 10, 2017), 82 FR 38942 (August 16, 2017)
(SR–MIAX–2017–39).
4 See Securities Exchange Act Release No. 82346
(December 18, 2017), 82 FR 60778 (December 22,
2017) (SR–CBOE–2017–076).
VerDate Sep<11>2014
16:47 Mar 08, 2018
Jkt 244001
interest, etc.). The Exchange believes
restricting such classes to closing
transactions will allow open interest to
be closed in a timelier and more
efficient manner. When seeking to delist
an option class the Exchange believes
that restricting series to closing
transactions is a better way to transition
the class to a delisted state than the
current method of not adding additional
series and allowing market participants
to continue to add new positions in the
existing series. Restricting trading to
closing transactions encourages market
participants to close transactions, which
helps to limit any potential negative
effects associated with delisting a class.
For example, restricting trading to
closing transactions helps prevent
market participants from adding new
positions that cannot be rolled into the
following expiration (a common options
strategy).
The Exchange notes that this proposal
is consistent with the manner in which
Rule 403 operates in relation to option
classes with underlying securities that
no longer meet the requirements for
approval—additional series are not
added, series with open interest are
restricted to closing only, and series
without open interest are delisted. As
proposed, when the Exchange seeks to
delist an option class with an
underlying security that continues to
meet the requirements for approval the
Exchange will not open additional
series in the option class and will
restrict trading to closing transactions.
Allowing Market Makers to facilitate
closing transactions of other market
participants will help market
participants close positions in classes
that will be delisted by the Exchange,
which helps to protect investors and the
public interest. It is reasonable to
restrict series to closing only pursuant
to current Rule 403 when underlying
securities no longer meet requirements
for approval. The Exchange believes it is
also reasonable to restrict series to
closing when the options class no longer
satisfies business justifications for
listing the class.
The Exchange will announce the
implementation date of the proposed
rule change by Regulatory Circular to be
published no later than 90 days
following the operative date of the
proposed rule. The implementation date
will be no later than 90 days following
the issuance of the Regulatory Circular.
2. Statutory Basis
The Exchange believes that its
proposed rule change is consistent with
Section 6(b) of the Act 5 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 6 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. Additionally, the
Exchange believes the proposed rule
change is consistent with Section
6(b)(5) 7 requirements that the rules of
an exchange not be designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, when seeking to delist
an option class—whether or not the
underlying security continues to meet
the requirements for approval—the
Exchange believes that restricting series
to closing transactions is a better way to
transition the class to a delisted state
than the current method of not adding
additional series and allowing market
participants to continue to add new
positions in the existing series.
Restricting trading to closing
transactions encourages market
participants to close transactions, which
helps to limit any potential negative
effects associated with delisting a class
and helps to protect customers and the
public interest.
The Exchange notes that this proposal
is consistent with the manner in which
Rule 403 operates in relation to option
classes with underlying securities that
no longer meet the requirements for
approval—additional series are not
added, series with open interest are
restricted to closing only, and series
without open interest are delisted. As
proposed, when the Exchange seeks to
delist an option class with an
underlying security that continues to
meet the requirements for approval the
Exchange will not open additional
series in the option class and will
restrict trading to closing transactions.
Also consistent with current Rule 403,
opening transactions by Market Makers
executed to accommodate closing
transactions of other market participants
may be permitted. Allowing Market
Makers and market participants to
facilitate closing transactions will help
close positions in classes that will be
delisted by the Exchange, which helps
to protect investors and the public
interest. It is reasonable to restrict series
to closing only pursuant to current Rule
403 when underlying securities no
6 15
5 15
PO 00000
U.S.C. 78f(b).
Frm 00117
Fmt 4703
U.S.C. 78f(b)(5).
7 Id.
Sfmt 4703
10539
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Federal Register / Vol. 83, No. 47 / Friday, March 9, 2018 / Notices
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longer meet requirements for approval.
The Exchange believes it is also
reasonable to restrict series to closing
when the option class no longer satisfies
business justifications for listing the
class.
The Exchange also believes the
proposed changes promote just and
equitable principles of trade and remove
impediments to and perfect the
mechanism of a free and open market
and a national market system because
the proposed rule is designed to allow
the Exchange to facilitate transactions in
products solely listed on the Exchange
in a uniform manner. Additionally, the
proposed amendment would foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities and would
remove impediments to and perfect the
mechanism of a free and open market
and a national exchange system because
the proposed amendment would make
the rules of Exchange consistent with
other options exchanges which trade
index options.8 In particular, the
Exchange believes that the proposed
changes will provide greater clarity to
Members 9 and the public regarding the
Exchange’s Rules as they pertain to
index options. It is in the public interest
for rules to be uniform and consistent
across options exchanges so as to
eliminate the potential for confusion.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
MIAX Options 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. The
proposed rule change is consistent with
the manner in which Rule 403 operates
in relation to option classes with
underlying securities that no longer
meet the requirements for approval—
additional series are not added, series
with open interest are restricted to
closing only, and series without open
interest are delisted. Also consistent
with current Rule 403, opening
transactions by Market Makers executed
to accommodate closing transactions of
other market participants may be
permitted. Allowing Market Makers to
facilitate closing transactions of other
market participants will help close
positions in classes that will be delisted
by the Exchange, which helps to protect
investors and the public interest and
does not impose any burden on
8 See
supra note 4.
term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
9 The
VerDate Sep<11>2014
16:47 Mar 08, 2018
Jkt 244001
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act. Additionally, the
proposed rule change is consistent with
the rules of other options exchanges that
currently list for trading index options,
therefore, the Exchange believes that
this proposed rule change will add
clarity and uniformity to the rule
governing index options.
The Exchange does not believe that
the proposed rule change will impose
any burden on intermarket 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 10 and Rule 19b–4(f)(6) 11
thereunder.
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:
10 15
U.S.C. 78s(b)(3)(A).
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.
11 17
PO 00000
Frm 00118
Fmt 4703
Sfmt 4703
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–2018–07 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–MIAX–2018–07. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet 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–MIAX–2018–07, and
should be submitted on or before March
30, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–04792 Filed 3–8–18; 8:45 am]
BILLING CODE P
12 17
E:\FR\FM\09MRN1.SGM
CFR 200.30–3(a)(12).
09MRN1
]]>Agencies
[Federal Register Volume 83, Number 47 (Friday, March 9, 2018)]
[Notices]
[Pages 10538-10540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-04792]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82814; File No. SR-MIAX-2018-07]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Exchange Rule 403, Withdrawal of Approval
of Underlying Securities
March 6, 2018.
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 February 21, 2018, Miami International
Securities Exchange, LLC (``MIAX Options'' or the ``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.b-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 403,
Withdrawal of Approval of Underlying Securities, to allow the Exchange
to delist an option class if open for trading on another national
securities exchange, and to not open for trading or restrict securities
with open interest to closing transactions, if open for trading solely
on the Exchange.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/ at MIAX Options'
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 seeks to amend Rule 403 to add Interpretations and
Policies .02, to allow the Exchange to delist an option class if it is
open for trading on another securities exchange; restrict option series
to closing transactions when an option class is open for trading solely
on the Exchange and the underlying security continues to meet the
requirements for approval; restrict series with open interest to
closing transactions, provided that, opening transactions by Market
Makers executed to accommodate closing transactions of other market
participants may be permitted; and to delist the option class when all
series within that class have expired. The Exchange believes the
ability to restrict option series to closing transactions when an
option class is
[[Page 10539]]
open for trading solely on the Exchange and the underlying security
continues to meet the requirements for approval will allow the Exchange
to delist option series in a timely and efficient manner. The Exchange
believes the proposed rule amendment is necessary in connection with
the listing and trading of option classes that are open for trading
solely on the Exchange, including, but not limited to, exclusively
listed cash-settled index option products.\3\ The proposed rule change
is based on a proposal recently submitted by Cboe Exchange, Inc.
(``Cboe'').\4\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 81371 (August 10,
2017), 82 FR 38942 (August 16, 2017) (SR-MIAX-2017-39).
\4\ See Securities Exchange Act Release No. 82346 (December 18,
2017), 82 FR 60778 (December 22, 2017) (SR-CBOE-2017-076).
---------------------------------------------------------------------------
Currently, whenever the Exchange determines that an underlying
security previously approved for Exchange options transactions does not
meet the then current requirements for continuance of such approval or
for any other reason should no longer be approved, the Exchange will
not open for trading any additional series of options of the class
covering that underlying security and may prohibit any opening
transactions in series of options of that class previously opened
(except that opening transactions by Market Makers executed to
accommodate closing transactions of other market participants may be
permitted). The Exchange seeks to add Interpretations and Policies .02
to provide that when an option class is trading on another exchange,
MIAX Options may delist such option class immediately, regardless of
whether the option class continues to meet the requirements for
approval. When an option class that no longer meets the requirements
for approval is trading solely on the Exchange, the Exchange may not
add any additional series, may restrict series with open interest to
closing transactions, and may delist any series without open interest.
However, when an option class continues to meet the requirements for
approval and is trading solely on the Exchange, the Exchange may not
restrict series with open interest to closing transactions; instead,
the Exchange may only delist series with no open interest and determine
to not open for trading any additional series in that option class, and
may delist the option class when all series within that class have
expired.
There are various business reasons why the Exchange may choose to
no longer list an option class (e.g., lack of trading interest, lack of
market-making interest, etc.). The Exchange believes restricting such
classes to closing transactions will allow open interest to be closed
in a timelier and more efficient manner. When seeking to delist an
option class the Exchange believes that restricting series to closing
transactions is a better way to transition the class to a delisted
state than the current method of not adding additional series and
allowing market participants to continue to add new positions in the
existing series. Restricting trading to closing transactions encourages
market participants to close transactions, which helps to limit any
potential negative effects associated with delisting a class. For
example, restricting trading to closing transactions helps prevent
market participants from adding new positions that cannot be rolled
into the following expiration (a common options strategy).
The Exchange notes that this proposal is consistent with the manner
in which Rule 403 operates in relation to option classes with
underlying securities that no longer meet the requirements for
approval--additional series are not added, series with open interest
are restricted to closing only, and series without open interest are
delisted. As proposed, when the Exchange seeks to delist an option
class with an underlying security that continues to meet the
requirements for approval the Exchange will not open additional series
in the option class and will restrict trading to closing transactions.
Allowing Market Makers to facilitate closing transactions of other
market participants will help market participants close positions in
classes that will be delisted by the Exchange, which helps to protect
investors and the public interest. It is reasonable to restrict series
to closing only pursuant to current Rule 403 when underlying securities
no longer meet requirements for approval. The Exchange believes it is
also reasonable to restrict series to closing when the options class no
longer satisfies business justifications for listing the class.
The Exchange will announce the implementation date of the proposed
rule change by Regulatory Circular to be published no later than 90
days following the operative date of the proposed rule. The
implementation date will be no later than 90 days following the
issuance of the Regulatory Circular.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act \5\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \6\ 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. Additionally,
the Exchange believes the proposed rule change is consistent with
Section 6(b)(5) \7\ requirements that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ Id.
---------------------------------------------------------------------------
In particular, when seeking to delist an option class--whether or
not the underlying security continues to meet the requirements for
approval--the Exchange believes that restricting series to closing
transactions is a better way to transition the class to a delisted
state than the current method of not adding additional series and
allowing market participants to continue to add new positions in the
existing series. Restricting trading to closing transactions encourages
market participants to close transactions, which helps to limit any
potential negative effects associated with delisting a class and helps
to protect customers and the public interest.
The Exchange notes that this proposal is consistent with the manner
in which Rule 403 operates in relation to option classes with
underlying securities that no longer meet the requirements for
approval--additional series are not added, series with open interest
are restricted to closing only, and series without open interest are
delisted. As proposed, when the Exchange seeks to delist an option
class with an underlying security that continues to meet the
requirements for approval the Exchange will not open additional series
in the option class and will restrict trading to closing transactions.
Also consistent with current Rule 403, opening transactions by Market
Makers executed to accommodate closing transactions of other market
participants may be permitted. Allowing Market Makers and market
participants to facilitate closing transactions will help close
positions in classes that will be delisted by the Exchange, which helps
to protect investors and the public interest. It is reasonable to
restrict series to closing only pursuant to current Rule 403 when
underlying securities no
[[Page 10540]]
longer meet requirements for approval. The Exchange believes it is also
reasonable to restrict series to closing when the option class no
longer satisfies business justifications for listing the class.
The Exchange also believes the proposed changes promote just and
equitable principles of trade and remove impediments to and perfect the
mechanism of a free and open market and a national market system
because the proposed rule is designed to allow the Exchange to
facilitate transactions in products solely listed on the Exchange in a
uniform manner. Additionally, the proposed amendment would foster
cooperation and coordination with persons engaged in facilitating
transactions in securities and would remove impediments to and perfect
the mechanism of a free and open market and a national exchange system
because the proposed amendment would make the rules of Exchange
consistent with other options exchanges which trade index options.\8\
In particular, the Exchange believes that the proposed changes will
provide greater clarity to Members \9\ and the public regarding the
Exchange's Rules as they pertain to index options. It is in the public
interest for rules to be uniform and consistent across options
exchanges so as to eliminate the potential for confusion.
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\8\ See supra note 4.
\9\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
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B. Self-Regulatory Organization's Statement on Burden on Competition
MIAX Options 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. The proposed rule change is
consistent with the manner in which Rule 403 operates in relation to
option classes with underlying securities that no longer meet the
requirements for approval--additional series are not added, series with
open interest are restricted to closing only, and series without open
interest are delisted. Also consistent with current Rule 403, opening
transactions by Market Makers executed to accommodate closing
transactions of other market participants may be permitted. Allowing
Market Makers to facilitate closing transactions of other market
participants will help close positions in classes that will be delisted
by the Exchange, which helps to protect investors and the public
interest and does not impose any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
Additionally, the proposed rule change is consistent with the rules of
other options exchanges that currently list for trading index options,
therefore, the Exchange believes that this proposed rule change will
add clarity and uniformity to the rule governing index options.
The Exchange does not believe that the proposed rule change will
impose any burden on intermarket 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 \10\ and Rule 19b-4(f)(6) \11\
thereunder.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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 [email protected]. Please include
File Number SR-MIAX-2018-07 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-MIAX-2018-07. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet 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-MIAX-2018-07, and should be submitted on
or before March 30, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-04792 Filed 3-8-18; 8:45 am]
BILLING CODE P
