Order Granting Application by MIAX PEARL, LLC for Exemption Pursuant to Section 36(a) of the Exchange Act From the Rule Filing Requirements of Section 19(b) of the Exchange Act With Respect to Certain Rules Incorporated by Reference, 17198-17200 [2018-08054]
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17198
Federal Register / Vol. 83, No. 75 / Wednesday, April 18, 2018 / Notices
Replacement Chargers ...........
Replacement adapters and
protective cases.
$75 each.
$50 each.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.3 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 4 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
Section 6(b)(4) of the Act,5 which
requires that Exchange rules provide for
the equitable allocation of reasonable
dues, fees, and other charges among its
Trading Permit Holders and other
persons using its facilities.
The Exchange believes the proposed
rule change is reasonable because the
amount of fees assessed reflect the
approximate cost to the Exchange to
provide those items to TPHs. The
Exchange believes it’s equitable and not
unfairly discriminatory because TPHs
that lose these items or damage these
items from non-normal wear or tear
should be responsible for the cost of
replacement. The Exchange believes the
proposed fees will encourage TPHs to
take proper care of the above-mentioned
PAR related hardware. As noted above,
the Exchange will still provide the
initial items free of charge and will also
not charge TPHs to replace defective
items (that were not the result of nonnormal wear and tear).
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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 intramarket or
intermarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange notes that the proposed rule
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
5 15 U.S.C. 78f(b)(4).
change applies to all TPHs that lose or
damage the above-mentioned PAR
related hardware. The Exchange also
notes the proposed rule change is not
intended for competitive purposes, but
rather because the Exchange no longer
wishes to subsidize TPHs for items they
lose or break.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 6 and paragraph (f) of Rule
19b–4 7 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 will institute proceedings
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:
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–
CBOE–2018–028 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–CBOE–2018–028. 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–CBOE–2018–028 and
should be submitted on or before May
9, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–08056 Filed 4–17–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83040]
Order Granting Application by MIAX
PEARL, LLC for Exemption Pursuant
to Section 36(a) of the Exchange Act
From the Rule Filing Requirements of
Section 19(b) of the Exchange Act With
Respect to Certain Rules Incorporated
by Reference
April 12, 2018.
MIAX PEARL, LLC (‘‘MIAX PEARL’’
or ‘‘Exchange’’) has filed with the
Securities and Exchange Commission
(‘‘Commission’’) an application for an
exemption under Section 36(a)(1) of the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) 1 from the rule filing
requirements of Section 19(b) of the
3 15
4 15
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17:31 Apr 17, 2018
6 15
7 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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1 15
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CFR 200.30–3(a)(12).
U.S.C. 78mm(a)(1).
18APN1
Federal Register / Vol. 83, No. 75 / Wednesday, April 18, 2018 / Notices
Exchange Act 2 with respect to certain
rules of the Miami International
Securities Exchange, LLC (‘‘MIAX
Options’’ 3) that the Exchange seeks to
incorporate by reference. Section 36 of
the Exchange Act authorizes the
Commission to conditionally or
unconditionally exempt any person,
security, or transaction, or any class
thereof, from any provision of the
Exchange Act or rule thereunder, if
necessary or appropriate in the public
interest and consistent with the
protection of investors.
On September 27, 2017, the
Commission approved a proposed rule
change by MIAX Options to adopt new
Chapter XVIII comprising MIAX
Options Rules 1801–1812 (‘‘MIAX
Options Index Options Rules’’), to
accommodate the trading of index
options by MIAX Options members and
establish generic listing standards and
maintenance standards to permit MIAX
Options to list ‘‘broad-based’’ and
‘‘narrow-based’’ index options pursuant
to Rule 19b–4(e) under the Act.4 On
February 8, 2018, MIAX PEARL filed a
proposed rule change with the
Commission to incorporate by reference,
in new Chapter XVIII of the MIAX
PEARL rulebook, the rules contained in
MIAX Options Chapter XVIII.5
MIAX PEARL has requested, pursuant
to Rule 0–12 under the Exchange Act,6
that the Commission grant the Exchange
an exemption from the rule filing
requirements of Section 19(b) of the
Exchange Act for changes to MIAX
PEARL Chapter XVIII that are effected
solely by virtue of a change to Chapter
XVIII of the MIAX Options rules.
Specifically, MIAX PEARL requests that
it be permitted to incorporate by
reference changes made to each MIAX
Options Index Options Rule that is
cross-referenced in the MIAX PEARL
Chapter XVIII rules,7 without the need
2 15
U.S.C. 78s(b).
Commission notes that MIAX PEARL
referred to the Miami International Securities
Exchange, LLC as ‘‘MIAX Options’’ in its
application for an exemption under Section 36(a)(1)
of the Exchange Act. See Letter from Dimitriy
Kotov, Counsel, MIAX PEARL, to Brent J. Fields,
Secretary, Commission, dated March 14, 2018
(‘‘Exemptive Request’’). References herein to the
rules of MIAX Options are to the rules of the Miami
International Securities Exchange, LLC.
4 See 17 CFR 240.19b–4(e). See also Securities
Exchange Act Release No. 81739 (February 2, 2017),
82 FR 46111 (October 3, 2017). The proposed rule
change also made related changes to other rules in
the MIAX Options rulebook. See id.
5 See Securities Exchange Act Release No. 82756
(February 21, 2018), 83 FR 8538 (February 27,
2018). MIAX PEARL’s proposed rule change was
approved by the Commission on April 12, 2018. See
Securities Exchange Act Release No. 83039.
6 17 CFR 240.0–12.
7 MIAX PEARL Chapter XVIII states ‘‘[t]he rules
contained in MIAX Options Exchange Chapter
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3 The
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17:31 Apr 17, 2018
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for the Exchange to file separately the
same proposed rule changes pursuant to
Section 19(b) of the Exchange Act.8 By
virtue of these incorporations by
reference, MIAX PEARL members will
comply with the MIAX Options Index
Options Rules by complying with the
MIAX Options rules referenced in the
MIAX PEARL Chapter XVIII rules.9 The
Exchange states that the MIAX Options
rules the Exchange seeks to incorporate
by reference are categories of rules that
are regulatory in nature. The Exchange
has agreed to provide written notice to
its members whenever MIAX Options
proposes a change to Chapter XVIII of
its Rules.10
The Exchange believes this exemption
is appropriate in the public interest and
consistent with the protection of
investors because it will promote more
efficient use of the Exchange’s and the
Commission’s resources by avoiding
duplicative rule filings based on
simultaneous changes to identical rules
sought by more than one self-regulatory
organization (‘‘SRO’’),11 and because it
will result in the Exchange’s rules being
consistent with the relevant crossreferenced MIAX Options rules.
The Commission has issued
exemptions similar to the Exchange’s
request.12 In granting one such
XVIII, as such rules may be in effect from time to
time (the ‘Chapter XVIII Rules’), are hereby
incorporated by reference into this MIAX PEARL
Chapter XVIII, and are thus MIAX PEARL Rules and
thereby applicable to MIAX PEARL Members.’’
8 See Exemptive Request, supra note 3, at 2.
9 Id.
10 The Exchange states that it will provide such
notice on its website in the same section it uses to
post its own proposed rule change filings pursuant
to Rule 19b-4(l). See 17 CFR 240.19b–4(l). In
addition, the Exchange states that its website will
also include a link to the MIAX Options website
where the proposed rule change filings are located.
See Exemptive Request, supra note 3, at 2.
11 Id.
12 See, e.g., Securities Exchange Act Release Nos.
76998 (January 29, 2016), 81 FR 6066, 6083–84
(February 4, 2016) (order granting application for
registration as a national securities exchange of ISE
Mercury, LLC (now known as Nasdaq MRX, LLC)
and exemptive request relating to rules of the
International Securities Exchange, LLC (now known
as Nasdaq ISE, LLC) (‘‘ISE’’) incorporated by
reference, including index options rules); 70050
(July 26, 2013), 78 FR 46622, 46642 (August 1,
2013) (order granting application for registration as
a national securities exchange of Topaz Exchange,
LLC (now known as Nasdaq GEMX, LLC) and
exemptive request relating to rules of ISE
incorporated by reference, including index options
rules); 61152 (December 10, 2009), 74 FR 66699,
66709–10 (December 16, 2009) (order granting
application for registration as a national securities
exchange of C2 Options Exchange, Incorporated
(‘‘C2’’) and exemptive request relating to rules of
the Chicago Board Options Exchange, Incorporated
(‘‘CBOE’’) incorporated by reference, including
index options rules). See also, e.g., Securities
Exchange Act Release No. 61534 (February 18,
2010), 75 FR 8760 (February 25, 2010) (order
granting BATS Exchange, Inc.’s exemptive request
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Frm 00062
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17199
exemption in 2010, the Commission
repeated a prior, 2004 Commission
statement that it would consider similar
future exemption requests from other
SROs, provided that:
• An SRO wishing to incorporate
rules of another SRO by reference has
submitted a written request for an order
exempting it from the requirement in
Section 19(b) of the Exchange Act to file
proposed rule changes relating to the
rules incorporated by reference, has
identified the applicable originating
SRO(s), together with the rules it wants
to incorporate by reference, and
otherwise has complied with the
procedural requirements set forth in the
Commission’s release governing
procedures for requesting exemptive
orders pursuant to Rule 0–12 under the
Exchange Act; 13
• The incorporating SRO has
requested incorporation of categories of
rules (rather than individual rules
within a category) that are not trading
rules (e.g., the SRO has requested
incorporation of rules such as margin,
suitability, or arbitration); and
• The incorporating SRO has
reasonable procedures in place to
provide written notice to its members
each time a change is proposed to the
incorporated rules of another SRO.14
The Commission believes that the
Exchange has satisfied each of these
conditions. The Commission also
believes that granting the Exchange an
exemption from the rule filing
requirements under Section 19(b) of the
Exchange Act will promote efficient use
of Commission and Exchange resources
by avoiding duplicative rule filings
based on simultaneous changes to
identical rule text sought by more than
one SRO.15 The Commission therefore
finds it appropriate in the public
interest and consistent with the
protection of investors to exempt the
Exchange from the rule filing
requirements under Section 19(b) of the
Exchange Act with respect to the abovedescribed rules it has incorporated by
reference. This exemption is
relating to rules incorporated by reference by the
BATS Exchange Options Market rules) (‘‘BATS
Options Market Order’’).
13 See 17 CFR 240.0–12 and Securities Exchange
Act Release No. 39624 (February 5, 1998), 63 FR
8101 (February 18, 1998) (‘‘Commission Procedures
for Filing Applications for Orders for Exemptive
Relief Pursuant to Section 36 of the Exchange Act;
Final Rule’’).
14 See BATS Options Market Order, supra note 12
(citing Securities Exchange Act Release No. 49260
(February 17, 2004), 69 FR 8500 (February 24, 2004)
(order granting exemptive request relating to rules
incorporated by reference by several SROs) (‘‘2004
Order’’)).
15 See BATS Options Market Order, supra note
12, 75 FR at 8761; see also 2004 Order, supra note
14, 69 FR at 8502.
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Federal Register / Vol. 83, No. 75 / Wednesday, April 18, 2018 / Notices
conditioned upon the Exchange
promptly providing written notice to its
members whenever MIAX Options
changes a rule that the Exchange has
incorporated by reference.
Accordingly, It is ordered, pursuant to
Section 36 of the Exchange Act,16 that
the Exchange is exempt from the rule
filing requirements of Section 19(b) of
the Exchange Act solely with respect to
changes to the rules identified in its
request that incorporate by reference
certain MIAX Options rules that are the
result of changes to such MIAX Options’
rules, provided that the Exchange
promptly provides written notice to its
members whenever MIAX Options
proposes to change a rule that the
Exchange has incorporated by reference.
Reporting System (‘‘RTRS’’) to reflect
the re-engineered RTRS and modernize
and consolidate the RTRS information
facility (‘‘RTRS IF’’) (‘‘proposed rule
change’’). The MSRB has filed the
proposed rule change under Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b-4(f)(6) 4 thereunder, as a
noncontroversial rule change that
renders the proposal effective upon
filing. The proposed rule change would
be made operative on May 29, 2018.
The text of the proposed rule change
is available on the MSRB’s website at
www.msrb.org/Rules-andInterpretations/SEC-Filings/2018Filings.aspx, at the MSRB’s principal
office, and at the Commission’s Public
Reference Room.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Eduardo A. Aleman,
Assistant Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2018–08054 Filed 4–17–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83038; File No. SR–MSRB–
2018–02]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change to the MSRB’s Facility for the
Real-Time Transaction Reporting
System
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 notice is hereby
given that on April 2, 2018 the
Municipal Securities Rulemaking Board
(the ‘‘MSRB’’ or ‘‘Board’’) 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 MSRB. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
April 12, 2018.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The MSRB filed with the Commission
a proposed rule change to the MSRB’s
facility for the Real-Time Transaction
U.S.C. 78mm.
17 17 CFR 200.30–3(a)(76).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
17:31 Apr 17, 2018
MSRB Rule G–14, on transaction
reporting, requires brokers, dealers and
municipal securities dealers (‘‘dealers’’)
to report executed transactions in
municipal securities to RTRS within 15
minutes of the time of trade, with
limited exceptions. RTRS disseminates
information about transactions
occurring in the municipal securities
market to RTRS subscription services,
including to the MSRB’s Electonic
Municipal Market Access System
(EMMA®). The RTRS IF sets forth the
material aspects of the operation of
RTRS by describing the basic
functionality of, and the high-level
parameters by which the MSRB
operates, RTRS. The proposed rule
change consists of amendments to the
RTRS IF.5
3 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 The RTRS facility is currently available on the
MSRB’s website at https://www.msrb.org/Rules-andInterpretations/MSRB-Rules/Facilities/RTRSFacility.aspx.
4 17
16 15
VerDate Sep<11>2014
In its filing with the Commission, the
MSRB 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 MSRB has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
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Background
The MSRB is enhancing certain RTRS
components, including improving
business continuity and connectivity
services to RTRS and migrating
subscription products to encrypted
solutions.6 The purpose of the proposed
rule change is to revise the RTRS IF to
reflect this re-engineering of RTRS and
to modernize and consolidate the RTRS
IF.
Since the re-engineering would result
in revisions to the RTRS IF, the MSRB
took the opportunity to perform a
comprehensive review of the RTRS IF to
evaluate whether it sufficiently and
clearly describes the basic functionality
and operation of RTRS. The MSRB
believes that dealers, submitters 7 and
subscribers 8 benefit from this
information being provided in a concise
and organized manner.
Proposed Amendments to the RTRS
Information Facility
(i) Subscriber Connectivity Changes
The RTRS IF sets forth RTRS
subscribers’ options for connecting to
the RTRS Real-Time Transaction Data
Subscription Service (‘‘Real-Time
Service’’). Currently, subscribers have
the option to connect to the Real-Time
Service either over the internet or by
leased line. As part of the reengineering, the MSRB will require that
subscribers to the Real-Time Service
utilize the internet to connect to RTRS.
As a result, subscribers will no longer be
able to use leased lines for the RealTime Service.
With respect to messaging with RTRS,
subscribers currently must use either
the MQ Series messaging software or a
Transmission Control Protocol (‘‘TCP’’)
Socket connection. As part of the reengineering, the MSRB will offer
subscribers a new web service as an
option for messaging with RTRS and
retire the MQ Series messaging software.
Moreover, the MSRB will require that
any TCP socket connections utilized for
messaging with RTRS are secure.
The MSRB is implementing these
subscriber connectivity changes to
improve business continuity by
allowing for more efficient failovers to
6 The MSRB has reported the enhancements to
RTRS components to the SEC consistent with
Regulation Systems Compliance and Integrity. See
Exchange Act Release No. 73639 (November 19,
2014), 79 FR 72251 (December 5, 2014).
7 As defined in Rule G–14, a submitter means a
dealer, or service bureau acting on behalf of a
dealer, that has been authorized to interface with
RTRS for the purposes of entering transaction data
into the system.
8 Subscriber refers to an individual or entity that
receives RTRS data through an MSRB subscription
service.
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18APN1
]]>Agencies
[Federal Register Volume 83, Number 75 (Wednesday, April 18, 2018)]
[Notices]
[Pages 17198-17200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08054]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83040]
Order Granting Application by MIAX PEARL, LLC for Exemption
Pursuant to Section 36(a) of the Exchange Act From the Rule Filing
Requirements of Section 19(b) of the Exchange Act With Respect to
Certain Rules Incorporated by Reference
April 12, 2018.
MIAX PEARL, LLC (``MIAX PEARL'' or ``Exchange'') has filed with the
Securities and Exchange Commission (``Commission'') an application for
an exemption under Section 36(a)(1) of the Securities Exchange Act of
1934 (``Exchange Act'') \1\ from the rule filing requirements of
Section 19(b) of the
[[Page 17199]]
Exchange Act \2\ with respect to certain rules of the Miami
International Securities Exchange, LLC (``MIAX Options'' \3\) that the
Exchange seeks to incorporate by reference. Section 36 of the Exchange
Act authorizes the Commission to conditionally or unconditionally
exempt any person, security, or transaction, or any class thereof, from
any provision of the Exchange Act or rule thereunder, if necessary or
appropriate in the public interest and consistent with the protection
of investors.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78mm(a)(1).
\2\ 15 U.S.C. 78s(b).
\3\ The Commission notes that MIAX PEARL referred to the Miami
International Securities Exchange, LLC as ``MIAX Options'' in its
application for an exemption under Section 36(a)(1) of the Exchange
Act. See Letter from Dimitriy Kotov, Counsel, MIAX PEARL, to Brent
J. Fields, Secretary, Commission, dated March 14, 2018 (``Exemptive
Request''). References herein to the rules of MIAX Options are to
the rules of the Miami International Securities Exchange, LLC.
---------------------------------------------------------------------------
On September 27, 2017, the Commission approved a proposed rule
change by MIAX Options to adopt new Chapter XVIII comprising MIAX
Options Rules 1801-1812 (``MIAX Options Index Options Rules''), to
accommodate the trading of index options by MIAX Options members and
establish generic listing standards and maintenance standards to permit
MIAX Options to list ``broad-based'' and ``narrow-based'' index options
pursuant to Rule 19b-4(e) under the Act.\4\ On February 8, 2018, MIAX
PEARL filed a proposed rule change with the Commission to incorporate
by reference, in new Chapter XVIII of the MIAX PEARL rulebook, the
rules contained in MIAX Options Chapter XVIII.\5\
---------------------------------------------------------------------------
\4\ See 17 CFR 240.19b-4(e). See also Securities Exchange Act
Release No. 81739 (February 2, 2017), 82 FR 46111 (October 3, 2017).
The proposed rule change also made related changes to other rules in
the MIAX Options rulebook. See id.
\5\ See Securities Exchange Act Release No. 82756 (February 21,
2018), 83 FR 8538 (February 27, 2018). MIAX PEARL's proposed rule
change was approved by the Commission on April 12, 2018. See
Securities Exchange Act Release No. 83039.
---------------------------------------------------------------------------
MIAX PEARL has requested, pursuant to Rule 0-12 under the Exchange
Act,\6\ that the Commission grant the Exchange an exemption from the
rule filing requirements of Section 19(b) of the Exchange Act for
changes to MIAX PEARL Chapter XVIII that are effected solely by virtue
of a change to Chapter XVIII of the MIAX Options rules. Specifically,
MIAX PEARL requests that it be permitted to incorporate by reference
changes made to each MIAX Options Index Options Rule that is cross-
referenced in the MIAX PEARL Chapter XVIII rules,\7\ without the need
for the Exchange to file separately the same proposed rule changes
pursuant to Section 19(b) of the Exchange Act.\8\ By virtue of these
incorporations by reference, MIAX PEARL members will comply with the
MIAX Options Index Options Rules by complying with the MIAX Options
rules referenced in the MIAX PEARL Chapter XVIII rules.\9\ The Exchange
states that the MIAX Options rules the Exchange seeks to incorporate by
reference are categories of rules that are regulatory in nature. The
Exchange has agreed to provide written notice to its members whenever
MIAX Options proposes a change to Chapter XVIII of its Rules.\10\
---------------------------------------------------------------------------
\6\ 17 CFR 240.0-12.
\7\ MIAX PEARL Chapter XVIII states ``[t]he rules contained in
MIAX Options Exchange Chapter XVIII, as such rules may be in effect
from time to time (the `Chapter XVIII Rules'), are hereby
incorporated by reference into this MIAX PEARL Chapter XVIII, and
are thus MIAX PEARL Rules and thereby applicable to MIAX PEARL
Members.''
\8\ See Exemptive Request, supra note 3, at 2.
\9\ Id.
\10\ The Exchange states that it will provide such notice on its
website in the same section it uses to post its own proposed rule
change filings pursuant to Rule 19b-4(l). See 17 CFR 240.19b-4(l).
In addition, the Exchange states that its website will also include
a link to the MIAX Options website where the proposed rule change
filings are located. See Exemptive Request, supra note 3, at 2.
---------------------------------------------------------------------------
The Exchange believes this exemption is appropriate in the public
interest and consistent with the protection of investors because it
will promote more efficient use of the Exchange's and the Commission's
resources by avoiding duplicative rule filings based on simultaneous
changes to identical rules sought by more than one self-regulatory
organization (``SRO''),\11\ and because it will result in the
Exchange's rules being consistent with the relevant cross-referenced
MIAX Options rules.
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\11\ Id.
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The Commission has issued exemptions similar to the Exchange's
request.\12\ In granting one such exemption in 2010, the Commission
repeated a prior, 2004 Commission statement that it would consider
similar future exemption requests from other SROs, provided that:
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\12\ See, e.g., Securities Exchange Act Release Nos. 76998
(January 29, 2016), 81 FR 6066, 6083-84 (February 4, 2016) (order
granting application for registration as a national securities
exchange of ISE Mercury, LLC (now known as Nasdaq MRX, LLC) and
exemptive request relating to rules of the International Securities
Exchange, LLC (now known as Nasdaq ISE, LLC) (``ISE'') incorporated
by reference, including index options rules); 70050 (July 26, 2013),
78 FR 46622, 46642 (August 1, 2013) (order granting application for
registration as a national securities exchange of Topaz Exchange,
LLC (now known as Nasdaq GEMX, LLC) and exemptive request relating
to rules of ISE incorporated by reference, including index options
rules); 61152 (December 10, 2009), 74 FR 66699, 66709-10 (December
16, 2009) (order granting application for registration as a national
securities exchange of C2 Options Exchange, Incorporated (``C2'')
and exemptive request relating to rules of the Chicago Board Options
Exchange, Incorporated (``CBOE'') incorporated by reference,
including index options rules). See also, e.g., Securities Exchange
Act Release No. 61534 (February 18, 2010), 75 FR 8760 (February 25,
2010) (order granting BATS Exchange, Inc.'s exemptive request
relating to rules incorporated by reference by the BATS Exchange
Options Market rules) (``BATS Options Market Order'').
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An SRO wishing to incorporate rules of another SRO by
reference has submitted a written request for an order exempting it
from the requirement in Section 19(b) of the Exchange Act to file
proposed rule changes relating to the rules incorporated by reference,
has identified the applicable originating SRO(s), together with the
rules it wants to incorporate by reference, and otherwise has complied
with the procedural requirements set forth in the Commission's release
governing procedures for requesting exemptive orders pursuant to Rule
0-12 under the Exchange Act; \13\
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\13\ See 17 CFR 240.0-12 and Securities Exchange Act Release No.
39624 (February 5, 1998), 63 FR 8101 (February 18, 1998)
(``Commission Procedures for Filing Applications for Orders for
Exemptive Relief Pursuant to Section 36 of the Exchange Act; Final
Rule'').
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The incorporating SRO has requested incorporation of
categories of rules (rather than individual rules within a category)
that are not trading rules (e.g., the SRO has requested incorporation
of rules such as margin, suitability, or arbitration); and
The incorporating SRO has reasonable procedures in place
to provide written notice to its members each time a change is proposed
to the incorporated rules of another SRO.\14\
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\14\ See BATS Options Market Order, supra note 12 (citing
Securities Exchange Act Release No. 49260 (February 17, 2004), 69 FR
8500 (February 24, 2004) (order granting exemptive request relating
to rules incorporated by reference by several SROs) (``2004
Order'')).
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The Commission believes that the Exchange has satisfied each of
these conditions. The Commission also believes that granting the
Exchange an exemption from the rule filing requirements under Section
19(b) of the Exchange Act will promote efficient use of Commission and
Exchange resources by avoiding duplicative rule filings based on
simultaneous changes to identical rule text sought by more than one
SRO.\15\ The Commission therefore finds it appropriate in the public
interest and consistent with the protection of investors to exempt the
Exchange from the rule filing requirements under Section 19(b) of the
Exchange Act with respect to the above-described rules it has
incorporated by reference. This exemption is
[[Page 17200]]
conditioned upon the Exchange promptly providing written notice to its
members whenever MIAX Options changes a rule that the Exchange has
incorporated by reference.
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\15\ See BATS Options Market Order, supra note 12, 75 FR at
8761; see also 2004 Order, supra note 14, 69 FR at 8502.
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Accordingly, It is ordered, pursuant to Section 36 of the Exchange
Act,\16\ that the Exchange is exempt from the rule filing requirements
of Section 19(b) of the Exchange Act solely with respect to changes to
the rules identified in its request that incorporate by reference
certain MIAX Options rules that are the result of changes to such MIAX
Options' rules, provided that the Exchange promptly provides written
notice to its members whenever MIAX Options proposes to change a rule
that the Exchange has incorporated by reference.
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\16\ 15 U.S.C. 78mm.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(76).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-08054 Filed 4-17-18; 8:45 am]
BILLING CODE 8011-01-P
