Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Exchange Rule 503, Openings on the Exchange, 17869-17872 [2018-08434]
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Federal Register / Vol. 83, No. 79 / Tuesday, April 24, 2018 / Notices
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Dated at Rockville, Maryland, this 19th day
of April 2018.
For the Nuclear Regulatory Commission.
Russell E. Chazell,
Federal Advisory Committee Management
Officer.
[FR Doc. 2018–08483 Filed 4–23–18; 8:45 am]
BILLING CODE 7590–01–P
Sunshine Act Meetings
daltland on DSKBBV9HB2PROD with NOTICES
2:00 p.m. on Thursday,
April 26, 2018.
PLACE: Closed Commission Hearing
Room 10800.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
Commissioner Piwowar, as duty
officer, voted to consider the items
listed for the closed meeting in closed
session.
The subject matters of the closed
meeting will be:
Institution and settlement of
injunctive actions;
VerDate Sep<11>2014
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Dated: April 19, 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018–08619 Filed 4–20–18; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83061; File No. SR–
NYSEAMER–2018–05]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Designation
of Longer Period for Commission
Action on Proposed Rule Change To
Establish an Electronic Price
Improvement Auction for Complex
Orders
April 18, 2018.
SECURITIES AND EXCHANGE
COMMISSION
TIME AND DATE:
Institution and settlement of
administrative proceedings; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed, please contact
Brent J. Fields from the Office of the
Secretary at (202) 551–5400.
On February 15, 2018, NYSE
American LLC (the ‘‘Exchange’’ or
‘‘NYSE American’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
establish an electronic price
improvement auction for complex
orders. The proposed rule change was
published for comment in the Federal
Register on March 7, 2018.3 The
Commission has received no comments
on the proposal.
Section 19(b)(2) of the Act 4 provides
that within 45 days of the publication of
notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 82802
(March 2, 2018), 83 FR 9769.
4 15 U.S.C. 78s(b)(2).
disapproved. The 45th day for this filing
is April 21, 2018. The Commission is
extending this 45-day time period.
The Commission finds that it is
appropriate to designate a longer period
within which to take action on the
proposed rule change so that it has
sufficient time to consider the proposed
rule change.
Accordingly, pursuant to Section
19(b)(2) of the Act,5 the Commission
designates June 5, 2018, as the date by
which the Commission should either
approve or disapprove, or institute
proceedings to determine whether to
disapprove, the proposed rule change
(File No. SR–NYSEAMER–2018–05).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–08435 Filed 4–23–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83060; File No. SR–
PEARL–2018–10]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Exchange Rule 503,
Openings on the Exchange
April 18, 2018.
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 April 6,
2018, MIAX PEARL, LLC (‘‘MIAX
PEARL’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
as described in Items I, II, and III below,
which Items have been prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend Exchange Rule 503, Openings on
the Exchange.
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
1 15
2 17
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17869
5 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(31).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
6 17
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Federal Register / Vol. 83, No. 79 / Tuesday, April 24, 2018 / Notices
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
daltland on DSKBBV9HB2PROD with NOTICES
1. Purpose
The Exchange proposes to amend
Exchange Rule 503, Openings on the
Exchange. Specifically, the Exchange
proposes to amend subsection (b)(1)(i)
and (b)(1)(ii) to make clarifying changes
to add additional detail to the rule text
which describes the two different
scenarios that the Exchange uses to
direct its Opening Process.3
Additionally, the Exchange proposes to
amend subsection (b)(2) and (b)(3) to
make additional clarifying changes to
align the rule text to the changes
proposed in subsection (b)(1)(i) and (ii).
Currently, the Exchange has two
separate sets of criteria, either of which
must be satisfied in order to begin the
Opening Process; one for when there is
a possible trade on MIAX PEARL 4 and
one for when there is not.5 Specifically,
Rule 503(b)(1)(i) states that to begin the
Opening Process, ‘‘[i]f there is a possible
trade on MIAX PEARL, a Valid Width
NBBO 6 must be present.’’ The Exchange
now proposes to amend this sentence to
remove the phrase ‘‘a possible trade’’
and replace it with a more
comprehensive description of scenarios
which, if present, would require the
presence of a Valid Width NBBO to
begin the Opening Process, to better
align the rule text to the current
Exchange functionality. The Exchange
therefore proposes to amend subsection
(b)(1)(i) to state, ‘‘[i]f there is locking or
crossing interest on MIAX PEARL, or
3 See
Exchange Rule 503(a)(1).
Exchange Rule 503(b)(1)(i).
5 See Exchange Rule 503(b)(1)(ii).
6 See Exchange Rule 503(a)(4).
4 See
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interest that locks or crosses the NBBO,7
a Valid Width NBBO must be present.’’
The following example demonstrates
interest on MIAX PEARL that locks or
crosses the NBBO.
Example 1
MIAX PEARL receives a Customer Do
Not Route (‘‘DNR’’) 8 to sell 100 @ $.05
prior to the opening.
At 9:30 a.m. MIAX PEARL receives
ABBO 9 market data from one other
exchange.
ABBO: $.05 × $5.00
NBBO: $.05 × $5.00
The interest to sell @ $.05 on MIAX
PEARL locks the NBBO.
The interest on MIAX PEARL is not
routable and there is no other interest
available on MIAX PEARL in this
scenario. The Exchange’s rules require a
Valid Width NBBO 10 to be present to
begin the Opening Process. The
Exchange believes that requiring the
presence of a Valid Width NBBO as a
condition precedent to starting the
Opening Process ensures that there is a
sufficient quoted market in the options
series which in turn will ensure that the
Exchange’s Opening Process determines
a valid Opening Price.11 The Exchange
believes this requirement provides a
level of price protection to orders on its
Book 12 and will limit transactions from
occurring at the opening at potentially
erroneous prices.
Similarly, the Exchange also proposes
to amend subsection (b)(1)(ii) to remove
the phrase, ‘‘no trade is possible’’ and
replace it with a more comprehensive
description of the conditions which
would result in the Exchange using its
second set of criteria, which is not
changing under this proposal, whereby
any one of the conditions may be
satisfied in order to begin the Opening
Process. The Exchange therefore
proposes to amend subsection (b)(1)(ii)
to state, ‘‘[i]f there is no locking or
7 The term ‘‘NBBO’’ means the national best bid
or offer as calculated by the Exchange based on
market information received by the Exchange from
OPRA. See Exchange Rule 100.
8 A Do Not Route or ‘‘DNR’’ order is an order that
will never be routed outside of the Exchange
regardless of the prices displayed by away markets.
See Exchange Rule 516(g).
9 The term ‘‘ABBO’’ or ‘‘Away Best Bid or Offer’’
means the best bid(s) or offer(s) disseminated by
other Eligible Exchanges (defined in Rule 1400(f))
and calculated by the Exchange based on market
information received by the Exchange from OPRA.
See Exchange Rule 100.
10 The Exchange notes that the current calculation
of a Valid Width NBBO on MIAX PEARL requires
the disseminated quotes of at least two other
exchanges and the quotes of at least one MIAX
PEARL Market Maker.
11 See Exchange Rule 503(b)(2)(i).
12 The term ‘‘Book’’ means the electronic book of
buy and sell orders and quotes maintained by the
System. See Exchange Rule 100.
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Frm 00083
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crossing interest on MIAX PEARL or
interest that locks or crosses the NBBO,
then the Exchange will open dependent
upon one of the following: (A) A Valid
Width NBBO is present; or (B) A certain
number of other options exchanges (as
determined by the Exchange and posted
by MIAX PEARL on its website) have
disseminated a firm quote on OPRA; or
(C) A certain period of time (as
determined by the Exchange and posted
by MIAX PEARL on its website) has
elapsed.’’
Additionally, the Exchange proposes
to amend the heading of subsection
503(b)(2) to align the rule text to the
proposed changes discussed above.
Currently, the heading reads, ‘‘Opening
Process Where There is a Possible Trade
on MIAX PEARL.’’ The Exchange
proposes to amend this heading to state,
‘‘Opening Process Where There is
Locking or Crossing Interest on MIAX
PEARL or Interest that Locks or Crosses
the NBBO.’’ Further, the Exchange
proposes to amend the heading of
subsection 503(b)(3) to align the rule
text to the proposed changes discussed
above. Currently, the heading reads,
‘‘Opening Process Where There is No
Possible Trade on MIAX PEARL.’’ The
Exchange now proposes to amend this
heading to state, ‘‘Opening Process
Where There is No Locking or Crossing
Interest on MIAX PEARL and no Interest
that Locks or Crosses the NBBO.’’ The
Exchange believes that these proposed
changes harmonize the rule text with
the proposed amendments to subsection
(b)(1)(i) and (ii).
The Exchange notes that the proposed
changes are clarifying changes only that
will not alter the current behavior of the
Exchange’s Opening Process. The
Opening Process where there is locking
or crossing interest on MIAX PEARL or
interest that locks or crosses the NBBO
will remain unchanged.13 Likewise, the
Opening Process for where there is no
locking or crossing interest on MIAX
PEARL and no interest that locks or
crosses the NBBO will remain
unchanged. Orders in the System will
be handled at the conclusion of the
Opening Process in time sequence,
beginning with the order with the oldest
time stamp and may, in whole or in
part, be placed on the Book, cancelled,
executed, managed in accordance with
Rule 515, or routed in accordance with
Rule 529.14
The proposed rule change provides
additional clarification and better aligns
the rule text to how the Opening Process
operates in production, and provides
consistency in the Exchange’s rules
13 See
14 See
E:\FR\FM\24APN1.SGM
Exchange Rule 503(b)(2)(i)–(iv).
Exchange Rule 503(b)(3).
24APN1
Federal Register / Vol. 83, No. 79 / Tuesday, April 24, 2018 / Notices
daltland on DSKBBV9HB2PROD with NOTICES
concerning the operation of the
Exchange’s Opening Process.
2. Statutory Basis
MIAX PEARL believes that its
proposed rule change is consistent with
Section 6(b) of the Act 15 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 16 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in, securities, to
remove impediments to and perfect the
mechanisms of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The Exchange believes that the
proposed changes to its rulebook add
additional detail and provide further
clarification to Members, investors, and
the Public, regarding the operation of
the Exchange’s Opening Process. The
Exchange believes it is in the interest of
investors and the public to accurately
describe the behavior of the Exchange’s
System in its rules as this information
may be used by investors to make
decisions concerning the submission of
their orders. Transparency and clarity
are consistent with the Act because it
removes impediments to and helps
perfect the mechanism of a free and
open market and a national market
system, and, in general, protects
investors and the public interest by
accurately describing the behavior of the
Exchange’s System.
Currently the rule requires the
presence of a Valid Width NBBO to
begin the Opening Process when there
is locking or crossing interest on the
Exchange (a possible trade), the
additional rule text requires the
presence of a Valid Width NBBO to
begin the Opening Process when there
is interest that locks or crosses the
NBBO, which similarly serves to protect
routable and non-routable interest on
the Book. The Exchange believes that
requiring a Valid Width NBBO to be
present prior to beginning the Opening
Process when there is locking or
crossing interest on the Exchange, or
interest that locks or crosses the NBBO,
ensures that the option series is being
sufficiently quoted to allow meaningful
price discovery. The Exchange’s current
Valid Width NBBO calculation requires
the disseminated quotes of at least two
other exchanges and the quotes of at
15 15
16 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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17:03 Apr 23, 2018
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least one MIAX PEARL Market Maker.17
The Exchange believes that using quotes
from competing options exchanges, in
addition to quotes from its own Market
Maker, ensures that the Exchange can
calculate a valid Opening Price.18 The
Exchange believes that its Valid Width
NBBO requirement contributes to the
operation of a fair and orderly market,
and in general, protects investors and
the public interest by reducing the
chance that the Exchange could execute
opening transactions at a potentially
erroneous Opening Price.
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. The
proposed rule change does not alter any
functionality of the Exchange’s System
and is designed to add additional clarity
and detail to the Exchange’s rules.
The Exchange does not believe that
the proposed rule change will impose
any burden on inter-market competition
as the Rules apply equally to all
Exchange Members. The proposed rule
change is not a competitive filing and is
intended to enhance the protection of
investors by ensuring that there is a
sufficient quoted market from which the
Exchange can determine a valid
Opening Price. Additionally, the
proposed rule change provides
additional detail and clarity to the
Exchange’s rulebook regarding the
Exchange’s Opening Process.
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 19 and Rule 19b–4(f)(6) 20
thereunder.
supra note 10.
supra note 11.
19 15 U.S.C. 78s(b)(3)(A).
20 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
17871
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
PEARL–2018–10 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–2018–10. 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
17 See
18 See
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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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Federal Register / Vol. 83, No. 79 / Tuesday, April 24, 2018 / Notices
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–2018–10 and
should be submitted on or before May
15, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–08434 Filed 4–23–18; 8:45 am]
BILLING CODE 8011–01–P
SOCIAL SECURITY ADMINISTRATION
[Docket No: SSA–2018–0015]
Agency Information Collection
Activities: Proposed Request
The Social Security Administration
(SSA) publishes a list of information
collection packages requiring clearance
by the Office of Management and
Budget (OMB) in compliance with
Public Law 104–13, the Paperwork
Reduction Act of 1995, effective October
1, 1995. This notice includes revisions
of OMB-approved information
collections.
SSA is soliciting comments on the
accuracy of the agency’s burden
estimate; the need for the information;
its practical utility; ways to enhance its
quality, utility, and clarity; and ways to
minimize burden on respondents,
including the use of automated
collection techniques or other forms of
information technology. Mail, email, or
fax your comments and
recommendations on the information
collection(s) to the OMB Desk Officer
and SSA Reports Clearance Officer at
the following addresses or fax numbers.
(OMB), Office of Management and
Budget, Attn: Desk Officer for SSA,
Fax: 202–395–6974, Email address:
OIRA_Submission@omb.eop.gov
(SSA), Social Security Administration,
OLCA, Attn: Reports Clearance
Director, 3100 West High Rise, 6401
Security Blvd., Baltimore, MD 21235,
Fax: 410–966–2830, Email address:
OR.Reports.Clearance@ssa.gov
Or you may submit your comments
online through www.regulations.gov,
Number of
respondents
Modality of completion
referencing Docket ID Number [SSA–
2018–0015].
The information collections below are
pending at SSA. SSA will submit them
to OMB within 60 days from the date of
this notice. To be sure we consider your
comments, we must receive them no
later than June 25, 2018. Individuals can
obtain copies of the collection
instruments by writing to the above
email address.
1. Claimant’s Medication—20 CFR
404.1512 & 416.912—0960–0289. In
cases where claimants request a hearing
after denial of their disability claim for
Social Security, SSA uses Form HA–
4632 to request information from the
claimant regarding the medications they
use. This information helps the
administrative law judge overseeing the
case to fully investigate: (1) The
claimant’s medical treatment, and (2)
the effects of the medications on the
claimant’s medical impairments and
functional capacity. The respondents
are applicants (or their representatives)
for Old Age, Survivors, and Disability
Insurance benefits or SSI payments who
request a hearing to contest an agency
denial of their claim.
Type of Request: Revision of an OMBapproved information collection.
Frequency of
response
Average
burden per
response
(minutes)
Estimated total
annual burden
(hours)
HA–4632 (paper) .............................................................................................
Electronic Records Express ............................................................................
20,000
180,000
1
1
15
15
5,000
45,000
Total ..........................................................................................................
200,000
........................
........................
50,000
2. Disability Report—Adult—20 CFR
404.1512 & 416.912—0960–0579. State
Disability Determination Services (DDS)
use the SSA–3368 and its electronic
versions to determine if adult disability
applicants’ impairments are severe and,
if so, how the impairments affect the
applicants’ ability to work. This
determination dictates whether the
DDSs and SSA will find the applicant
disabled and entitled to SSI payments.
The respondents are applicants for Title
Number of
respondents
Modality of completion
II disability benefits or Title XVI SSI
payments.
Type of Request: Revision of an OMBapproved information collection.
Frequency of
response
Average
burden per
response
(minutes)
Estimated
annual burden
(hours)
7,571
2,484,231
1,060,360
1
1
1
90
90
90
11,357
3,726,347
1,590,540
Totals ........................................................................................................
daltland on DSKBBV9HB2PROD with NOTICES
SSA–3368 (Paper form) ..................................................................................
Electronic Disability Collection System (EDCS) ..............................................
i3368 (Internet) ................................................................................................
3,552,162
........................
........................
5,328,244
3. Representative Payee ReportSpecial Veterans Benefits—20 CFR
408.665—0960–0621. Title VIII of the
Act allows for payment of monthly
Social Security benefits to qualified
21 17
World War II veterans residing outside
the United States. An SSA-appointed
representative payee may receive and
manage the monthly payment for the
beneficiary’s use and benefit. SSA uses
the information on Form SSA–2001–F6
to determine whether the representative
payee used the certified payments
properly, and continues to demonstrate
strong concern for the beneficiary’s best
CFR 200.30–3(a)(12).
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17:03 Apr 23, 2018
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]]>Agencies
[Federal Register Volume 83, Number 79 (Tuesday, April 24, 2018)]
[Notices]
[Pages 17869-17872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08434]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83060; File No. SR-PEARL-2018-10]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Exchange Rule
503, Openings on the Exchange
April 18, 2018.
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 April 6, 2018, MIAX PEARL, LLC (``MIAX PEARL'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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 503,
Openings on the Exchange.
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
[[Page 17870]]
office, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Exchange Rule 503, Openings on the
Exchange. Specifically, the Exchange proposes to amend subsection
(b)(1)(i) and (b)(1)(ii) to make clarifying changes to add additional
detail to the rule text which describes the two different scenarios
that the Exchange uses to direct its Opening Process.\3\ Additionally,
the Exchange proposes to amend subsection (b)(2) and (b)(3) to make
additional clarifying changes to align the rule text to the changes
proposed in subsection (b)(1)(i) and (ii).
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\3\ See Exchange Rule 503(a)(1).
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Currently, the Exchange has two separate sets of criteria, either
of which must be satisfied in order to begin the Opening Process; one
for when there is a possible trade on MIAX PEARL \4\ and one for when
there is not.\5\ Specifically, Rule 503(b)(1)(i) states that to begin
the Opening Process, ``[i]f there is a possible trade on MIAX PEARL, a
Valid Width NBBO \6\ must be present.'' The Exchange now proposes to
amend this sentence to remove the phrase ``a possible trade'' and
replace it with a more comprehensive description of scenarios which, if
present, would require the presence of a Valid Width NBBO to begin the
Opening Process, to better align the rule text to the current Exchange
functionality. The Exchange therefore proposes to amend subsection
(b)(1)(i) to state, ``[i]f there is locking or crossing interest on
MIAX PEARL, or interest that locks or crosses the NBBO,\7\ a Valid
Width NBBO must be present.''
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\4\ See Exchange Rule 503(b)(1)(i).
\5\ See Exchange Rule 503(b)(1)(ii).
\6\ See Exchange Rule 503(a)(4).
\7\ The term ``NBBO'' means the national best bid or offer as
calculated by the Exchange based on market information received by
the Exchange from OPRA. See Exchange Rule 100.
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The following example demonstrates interest on MIAX PEARL that
locks or crosses the NBBO.
Example 1
MIAX PEARL receives a Customer Do Not Route (``DNR'') \8\ to sell
100 @ $.05 prior to the opening.
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\8\ A Do Not Route or ``DNR'' order is an order that will never
be routed outside of the Exchange regardless of the prices displayed
by away markets. See Exchange Rule 516(g).
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At 9:30 a.m. MIAX PEARL receives ABBO \9\ market data from one
other exchange.
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\9\ The term ``ABBO'' or ``Away Best Bid or Offer'' means the
best bid(s) or offer(s) disseminated by other Eligible Exchanges
(defined in Rule 1400(f)) and calculated by the Exchange based on
market information received by the Exchange from OPRA. See Exchange
Rule 100.
ABBO: $.05 x $5.00
NBBO: $.05 x $5.00
The interest to sell @ $.05 on MIAX PEARL locks the NBBO.
The interest on MIAX PEARL is not routable and there is no other
interest available on MIAX PEARL in this scenario. The Exchange's rules
require a Valid Width NBBO \10\ to be present to begin the Opening
Process. The Exchange believes that requiring the presence of a Valid
Width NBBO as a condition precedent to starting the Opening Process
ensures that there is a sufficient quoted market in the options series
which in turn will ensure that the Exchange's Opening Process
determines a valid Opening Price.\11\ The Exchange believes this
requirement provides a level of price protection to orders on its Book
\12\ and will limit transactions from occurring at the opening at
potentially erroneous prices.
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\10\ The Exchange notes that the current calculation of a Valid
Width NBBO on MIAX PEARL requires the disseminated quotes of at
least two other exchanges and the quotes of at least one MIAX PEARL
Market Maker.
\11\ See Exchange Rule 503(b)(2)(i).
\12\ The term ``Book'' means the electronic book of buy and sell
orders and quotes maintained by the System. See Exchange Rule 100.
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Similarly, the Exchange also proposes to amend subsection
(b)(1)(ii) to remove the phrase, ``no trade is possible'' and replace
it with a more comprehensive description of the conditions which would
result in the Exchange using its second set of criteria, which is not
changing under this proposal, whereby any one of the conditions may be
satisfied in order to begin the Opening Process. The Exchange therefore
proposes to amend subsection (b)(1)(ii) to state, ``[i]f there is no
locking or crossing interest on MIAX PEARL or interest that locks or
crosses the NBBO, then the Exchange will open dependent upon one of the
following: (A) A Valid Width NBBO is present; or (B) A certain number
of other options exchanges (as determined by the Exchange and posted by
MIAX PEARL on its website) have disseminated a firm quote on OPRA; or
(C) A certain period of time (as determined by the Exchange and posted
by MIAX PEARL on its website) has elapsed.''
Additionally, the Exchange proposes to amend the heading of
subsection 503(b)(2) to align the rule text to the proposed changes
discussed above. Currently, the heading reads, ``Opening Process Where
There is a Possible Trade on MIAX PEARL.'' The Exchange proposes to
amend this heading to state, ``Opening Process Where There is Locking
or Crossing Interest on MIAX PEARL or Interest that Locks or Crosses
the NBBO.'' Further, the Exchange proposes to amend the heading of
subsection 503(b)(3) to align the rule text to the proposed changes
discussed above. Currently, the heading reads, ``Opening Process Where
There is No Possible Trade on MIAX PEARL.'' The Exchange now proposes
to amend this heading to state, ``Opening Process Where There is No
Locking or Crossing Interest on MIAX PEARL and no Interest that Locks
or Crosses the NBBO.'' The Exchange believes that these proposed
changes harmonize the rule text with the proposed amendments to
subsection (b)(1)(i) and (ii).
The Exchange notes that the proposed changes are clarifying changes
only that will not alter the current behavior of the Exchange's Opening
Process. The Opening Process where there is locking or crossing
interest on MIAX PEARL or interest that locks or crosses the NBBO will
remain unchanged.\13\ Likewise, the Opening Process for where there is
no locking or crossing interest on MIAX PEARL and no interest that
locks or crosses the NBBO will remain unchanged. Orders in the System
will be handled at the conclusion of the Opening Process in time
sequence, beginning with the order with the oldest time stamp and may,
in whole or in part, be placed on the Book, cancelled, executed,
managed in accordance with Rule 515, or routed in accordance with Rule
529.\14\
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\13\ See Exchange Rule 503(b)(2)(i)-(iv).
\14\ See Exchange Rule 503(b)(3).
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The proposed rule change provides additional clarification and
better aligns the rule text to how the Opening Process operates in
production, and provides consistency in the Exchange's rules
[[Page 17871]]
concerning the operation of the Exchange's Opening Process.
2. Statutory Basis
MIAX PEARL believes that its proposed rule change is consistent
with Section 6(b) of the Act \15\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \16\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in, securities, to remove impediments to and
perfect the mechanisms of a free and open market and a national market
system and, in general, to protect investors and the public interest.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed changes to its rulebook add
additional detail and provide further clarification to Members,
investors, and the Public, regarding the operation of the Exchange's
Opening Process. The Exchange believes it is in the interest of
investors and the public to accurately describe the behavior of the
Exchange's System in its rules as this information may be used by
investors to make decisions concerning the submission of their orders.
Transparency and clarity are consistent with the Act because it removes
impediments to and helps perfect the mechanism of a free and open
market and a national market system, and, in general, protects
investors and the public interest by accurately describing the behavior
of the Exchange's System.
Currently the rule requires the presence of a Valid Width NBBO to
begin the Opening Process when there is locking or crossing interest on
the Exchange (a possible trade), the additional rule text requires the
presence of a Valid Width NBBO to begin the Opening Process when there
is interest that locks or crosses the NBBO, which similarly serves to
protect routable and non-routable interest on the Book. The Exchange
believes that requiring a Valid Width NBBO to be present prior to
beginning the Opening Process when there is locking or crossing
interest on the Exchange, or interest that locks or crosses the NBBO,
ensures that the option series is being sufficiently quoted to allow
meaningful price discovery. The Exchange's current Valid Width NBBO
calculation requires the disseminated quotes of at least two other
exchanges and the quotes of at least one MIAX PEARL Market Maker.\17\
The Exchange believes that using quotes from competing options
exchanges, in addition to quotes from its own Market Maker, ensures
that the Exchange can calculate a valid Opening Price.\18\ The Exchange
believes that its Valid Width NBBO requirement contributes to the
operation of a fair and orderly market, and in general, protects
investors and the public interest by reducing the chance that the
Exchange could execute opening transactions at a potentially erroneous
Opening Price.
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\17\ See supra note 10.
\18\ See supra note 11.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change
does not alter any functionality of the Exchange's System and is
designed to add additional clarity and detail to the Exchange's rules.
The Exchange does not believe that the proposed rule change will
impose any burden on inter-market competition as the Rules apply
equally to all Exchange Members. The proposed rule change is not a
competitive filing and is intended to enhance the protection of
investors by ensuring that there is a sufficient quoted market from
which the Exchange can determine a valid Opening Price. Additionally,
the proposed rule change provides additional detail and clarity to the
Exchange's rulebook regarding the Exchange's Opening Process.
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 \19\ and Rule 19b-4(f)(6) \20\
thereunder.
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\19\ 15 U.S.C. 78s(b)(3)(A).
\20\ 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- PEARL-2018-10 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-2018-10. 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
[[Page 17872]]
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-2018-10 and should be
submitted on or before May 15, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-08434 Filed 4-23-18; 8:45 am]
BILLING CODE 8011-01-P
