Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 404A, Select Provisions of Options Listing Procedures Plan, Rule 406, Long-Term Option Contracts, and Rule 1809, Terms of Index Options Contracts, 47207-47210 [2018-20190]
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Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices
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[FR Doc. 2018–20211 Filed 9–17–18; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
daltland on DSKBBV9HB2PROD with NOTICES
Extension:
Regulation 14C (Commission Rules 14c–1
through 14c–7 and Schedule 14C), SEC
File No. 270–057, OMB Control No.
3235–0057
Notice is hereby given that, pursuant
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(44 U.S.C. 3501 et seq.), the Securities
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on the collection of information
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plans to submit this existing collection
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and approval.
Section 14(c) of the Securities
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Act’’) operates to require issuers that do
not solicit proxies or consents from any
or all of the holders of record of a class
of securities registered under Section 12
of the Exchange Act and in accordance
with the rules and regulations
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prescribed under Section 14(a) in
connection with a meeting of security
holders (including action by consent) to
distribute to any holders that were not
solicited an information statement
substantially equivalent to the
information that would be required to
be transmitted if a proxy or consent
solicitation were made. Regulation 14C
(Exchange Act Rules 14c–1 through
14c–7 and Schedule 14C) (17 CFR
240.14c–1 through 240.14c–7 and
240.14c–101) sets forth the requirements
for the dissemination, content and filing
of the information statement. We
estimate that Schedule 14C takes
approximately 130.9197 hours per
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approximately 569 issuers annually. In
addition, we estimate that 75% of the
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hours) is prepared by the issuer for an
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(98.1898 hours per response × 569
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to Pamela Dyson, Director/Chief
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Kenner, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
Mailbox@sec.gov.
Dated: September 12, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–20278 Filed 9–17–18; 8:45 am]
BILLING CODE 8011–01–P
PO 00000
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84089; File No. SR–MIAX–
2018–24]
Self-Regulatory Organizations; Miami
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Exchange Rule
404A, Select Provisions of Options
Listing Procedures Plan, Rule 406,
Long-Term Option Contracts, and Rule
1809, Terms of Index Options
Contracts
September 12, 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 August 30, 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 and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend Rule 404A, Select Provisions of
Options Listing Procedures Plan, Rule
406, Long-Term Option Contracts, and
Rule 1809, Terms of Index Options
Contracts.
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.
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices
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
MIAX Options Rule 404A, Select
Provisions of Options Listing
Procedures Plan, Rule 406, Long-Term
Option Contracts, and Rule 1809, Terms
of Index Options Contracts, to conform
its rules to the recently approved
changes to the Options Listing
Procedures Plan (‘‘OLPP’’), as well as to
the rules of other exchanges.3 The
Exchange, which is one of the
Participant Exchanges to the OLPP,
currently has rules that are designed to
incorporate the requirements of the
OLPP.4 All Participant Exchanges have
similar (essentially uniform) rules to
ensure consistency and compliance
with the OLPP. The Exchange proposes
to modify its rules to reflect the recent
updates described below, as well as to
conform to the rules of the other
exchanges.
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Addition of Long-Term Equity Options
(‘‘LEAPS’’)
First, the OLPP has been amended to
change the earliest date on which new
January LEAPS on equity options,
options on Exchange Traded Funds
(‘‘ETF’’), or options on Trust Issued
Receipts (‘‘TIR’’) may be added to a
single date (from three separate
months). As noted in the OLPP Notice,
in the past, there were operational
concerns related to adding new January
LEAPs series for all options classes on
which LEAPs were listed on a single
trading day.5 And, the addition of new
series in a pre-electronic environment
was a manual process. To accommodate
this, the addition of new January LEAPs
series was spread across three months
(September, October, and November).
Today, however, these operational
concerns related to January LEAPs have
been alleviated as new series can be
added in bulk electronically. The Plan
Participants, including the Exchange,
believe that moving the addition of new
January LEAPs series to no earlier than
3 See Securities Exchange Act Release Nos. 82235
(December 7, 2017), 82 FR 58688 (December 13,
2017) (order approving the Fourth Amendment to
the OLPP); 81893 (October 18, 2017), 82 FR 49249
(‘‘OLPP Notice’’).
4 In addition to the Exchange, the ‘‘Participant
Exchanges’’ are: Cboe Exchange, Inc.; Cboe BZX
Exchange, Inc.; BOX Options Exchange, LLC; Cboe
C2 Exchange, Inc.; Cboe EDGX Exchange, Inc.;
MIAX PEARL, LLC; Nasdaq BX, Inc.; Nasdaq
GEMX, LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC;
Nasdaq Options Market, LLC; Nasdaq PHLX, LLC;
NYSE Arca, Inc.; and NYSE American, LLC.
5 See OLPP Notice at 49249.
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the Monday prior to the September
expiration would reduce marketplace
confusion about available January
LEAPs series. Where previously January
LEAPs series for options classes on the
February or March expiration cycles
would not have been available as early
as January LEAPs series for options
classes on the January expiration cycle,
under the proposed change, all January
LEAPs series will be available
concurrently. Accordingly, to conform
to this change, the Exchange proposes to
modify current Rule 406(b) to reflect
that new January LEAPS series on
equity options classes, options on ETFs,
or options on TIRs, may not be added
on a currently listed and traded option
class earlier than the Monday prior to
the September expiration (which is 28
months before the expiration).6
Addition of Equity, ETF, and TIR
Option Series After Regular Trading
Hours
Second, the OLPP has been amended
to allow equity, ETF, and TIR option
series to be added based on trading after
regular trading hours (i.e., after-market).
As noted in the OLPP Notice, the prior
version of the OLPP did not allow for
option series to be added based on
trading following regular trading hours.7
As such, the Exchange Participants were
unable to add new option series that
may result from trading following
regular trading hours until the next
morning, depending on the range of
prices in pre-market trading, which is
significant because events that occur
after regular trading hours, such as
earnings releases, often have an
important impact on the price of an
underlying security. In addition, there
are operational difficulties for market
participants throughout the industry
adding series after system startup. To
avoid the potential burden that would
result from the inability to add series as
a result of trading following regular
trading hours, the OLPP was amended
to allow an additional category by
which the price of an underlying
security may be measured. Specifically,
to conform to the amended OLPP, the
Exchange proposes to add subparagraph
(b)(1)(iv) to Rule 404A to provide that
‘‘for options series to be added based on
trading following regular trading
hours,’’ the price of the underlying
security is measured by ‘‘the most
recent share price reported by all
national securities exchanges between
4:15 p.m. and 6:00 p.m. Eastern Time.’’ 8
6 See
proposed Rule 406(b).
OLPP Notice at 49250.
8 See proposed Rule 404A(b)(1)(iv). The Exchange
proposes to relocate ‘‘and’’ from subparagraph (ii)
7 See
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Technical Changes
The Exchange proposes to modify
Rule 406(b) to delete now obsolete
operational language, which dates back
to when LEAPs were first adopted. The
language in question provides that:
After a new long-term option contract
series is listed, such series will be opened for
trading either when there is buying or selling
interest, or forty (40) minutes prior to the
close, whichever occurs first. No quotations
will be posted for such options series until
they are opened for trading.
The Exchange proposes to delete this
language because when this language
was adopted LEAPs were not opened for
trading until late in the trading day
unless there was buying or selling
interest. Today, however, technological
improvements allow the Exchange to
open all LEAP series at the same time
as all other series in an option class.
For the same reasons as described
above, the Exchange also proposes to
modify Rule 1809(b)(1)(ii) to delete
similar obsolete operational language,
which relates to long-term index options
series, and provides that:
When a new long-term index options series
is listed, such series will be opened for
trading either when there is buying or selling
interest, or forty (40) minutes prior to the
close, whichever occurs first. No quotations
will be posted for such options series until
they are opened for trading.
Conforming Changes
The Exchange proposes to make
certain changes to conform its rules to
the rules of other exchanges and to
codify a certain provision in the OLPP
that is not currently included in its
rules. First, the Exchange proposes to
add additional clarifying language to
Rule 406(b). Specifically, the Exchange
proposes to add a paragraph to note
that, pursuant to the OLPP, ‘‘exchanges
that list and trade the same equity
option class, ETF option class, or TIR
option class are authorized to jointly
determine and coordinate with the
Options Clearing Corporation on the
date of introduction of new LEAP series
for that option class consistent with this
paragraph (b).’’ This clarifying language
is identical to language contained in
other exchanges’ rules.9
Second, Amendment 2 to the OLPP 10
provided for a uniform minimum
to (iii) to conform to the change. See proposed Rule
404A(b)(1)(ii) and (iii).
9 For example, see Cboe Rule 5.8(b); see also
NYSE Arca Rule 6.4–O(d)(ii).
10 See Securities Exchange Act Release No. 58630
(September 24, 2008), 73 FR 57166 (October 1,
2008) (Order granting permanent approval to
Amendment No. 2 to the Plan for the Purpose of
Developing and Implementing Procedures Designed
to Facilitate the Listing and Trading of
Standardized Options).
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Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices
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volume threshold per underlying class
to qualify for the introduction of a new
expiration year of LEAPS on equity, ETF
and TIR classes. The Exchange proposes
to codify this change made to the OLPP
by Amendment 2 as new subparagraph
(c) to Rule 406 of the Exchange’s rules.
Specifically, this provision will provide:
‘‘The Exchange shall not list new LEAP
series on equity option classes, options
on ETFs, or options on TIRs in a new
expiration year if the national average
daily contract volume, excluding LEAP
and FLEX series, for that option class
during the preceding three (3) calendar
months is less than 1,000 contracts,
unless the new LEAP series has an
expiration year that has already been
listed on another exchange for that
option class. The preceding volume
threshold does not apply to the first six
(6) months an equity option class,
option on an ETF or option on a TIR is
listed on any exchange.’’ The Exchange
notes that this conforming change is
necessary to align the rules of the
Exchange with the OLPP and with other
exchanges.11
2. Statutory Basis
The Exchange believes that its
proposed rule change is consistent with
Section 6(b) of the Act 12 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 13 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 the Section
6(b)(5) 14 requirement that the rules of
an exchange not be designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the proposed rule
change, which conforms to the recently
adopted provisions of the OLPP, as
amended, allows the Exchange to
continue to list extended far term option
series that have been viewed as
beneficial to traders, investors and
public customers. Accordingly, the
Exchange believes that the proposal is
consistent with the Act because it will
allow the Exchange to list all January
11 For example, see Cboe Rule 5.8(c); see also
NYSE Arca Rule 6.4–O(d)(iii).
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
14 Id.
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19:14 Sep 17, 2018
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2021 expiration series on the Monday
prior to the September 2018 expiration.
Moreover, this change would simplify
the process for adding new January
LEAP options series and reduce
potential for investor confusion because
all new January LEAP options would be
made available beginning at the same
time, consistent with the amended
OLPP. The Exchange notes that this
proposal does not propose any new
provisions that have not already been
approved by the Commission in the
amended OLPP, but instead maintains
series listing rules that conform to the
amended OLPP.
The proposal to permit series to be
added based on after-market trading is
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
and to remove impediments to and
perfect the mechanisms of a free and
open market and a national market
system, by allowing the Exchange to
make series available for trading with
reduced operational difficulties. The
Exchange notes that this proposed
change, which is consistent with the
amended OLPP should provide market
participants with earlier notice
regarding what options series will be
available for trading the following day,
and should help to enhance investors’
ability to plan their options trading. The
Exchange also believes that the
proposed technical changes, including
deleting obsolete language and
reorganizing and consolidating the rule,
promote just and equitable principles of
trade, foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and remove impediments to and perfect
the mechanism of a free and open
market and a national market system.
Furthermore, the Exchange believes that
the proposed conforming changes,
adding language to Rule 406, promote
just and equitable principles of trade,
foster cooperation and coordination
with persons engaged in facilitating
transactions in securities, and remove
impediments to and perfect the
mechanism of a free and open market
and a national market system by
providing clarity and consistency to the
rules, and creating uniformity amongst
exchanges with respect to rules related
to the OLPP.
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. Specifically,
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47209
the Exchange believes that by
conforming Exchange rules to the
amended OLPP, the Exchange would
promote regulatory clarity and
consistency, thereby reducing burdens
on the marketplace and facilitating
investor protection. The Exchange
believes that adopting rules, which it
anticipates will likewise be adopted by
Participant Exchanges, would allow for
continued competition between
Exchange market participants trading
similar products as their counterparts
on other exchanges, while at the same
time allowing the Exchange to continue
to compete for order flow with other
exchanges in option issues.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 15 and Rule
19b–4(f)(6) thereunder.16 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.17
A proposed rule change filed under
Rule 19b–4(f)(6) 18 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),19 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
15 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
18 17 CFR 240.19b–4(f)(6).
19 17 CFR 240.19b–4(f)(6)(iii).
16 17
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Federal Register / Vol. 83, No. 181 / Tuesday, September 18, 2018 / Notices
immediately upon filing. The
Commission notes that the Exchange’s
proposal would conform the Exchange’s
rules to the amended OLPP, which the
Commission previously approved.20
Accordingly, the Commission believes
that the proposal raises no new or novel
regulatory issues and waiver of the 30day operative delay is consistent with
the protection of investors and the
public interest. The Commission
therefore waives the 30-day operative
delay and designates the proposed rule
change to be operative upon filing.21
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 22 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
daltland on DSKBBV9HB2PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
MIAX–2018–24 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–2018–24. 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
20 See
OLPP Notice, supra note 3.
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).
22 15 U.S.C. 78s(b)(2)(B).
21 For
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19:14 Sep 17, 2018
Jkt 244001
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–2018–24 and should
be submitted on or before October 9,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–20190 Filed 9–17–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84107; File No. SR–
CboeBZX–2018–070]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To List and
Trade Shares of the iShares iBonds
Dec 2025 Term Muni Bond ETF of
iShares Trust Under BZX Rule
14.11(c)(4) (Index Fund Shares)
September 13, 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 August
30, 2018, Cboe BZX Exchange, Inc.
(‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Sfmt 4703
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. 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 proposing to list and
trade under BZX Rule 14.11(c)(4) the
shares of the iShares iBonds Dec 2025
Term Muni Bond ETF (the ‘‘Fund’’) of
iShares Trust (the ‘‘Trust’’).
The text of the proposed rule change
is available at the Exchange’s website at
www.markets.cboe.com, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant parts 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 list and
trade shares (‘‘Shares’’) of the Fund
under BZX Rule 14.11(c)(4),5 which
governs the listing and trading of index
fund shares based on fixed income
securities indexes.6 The Shares will be
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii).
5 The Commission approved BZX Rule 14.11(c) in
Securities Exchange Act Release No. 65225 (August
30, 2011), 76 FR 55148 (September 6, 2011) (SR–
BATS–2011–018).
6 The Commission previously has approved
proposed rule changes relating to listing and trading
of funds based on municipal bond indexes. See
Securities Exchange Act Release Nos. 78329 (July
14, 2016), 81 FR 47217 (July 20, 2016) (SR–
BatsBZX–2016–01) (order approving the listing and
trading of the following series of VanEck Vectors
ETF Trust: VanEck Vectors AMT-Free 6–8 Year
Municipal Index ETF; VanEck Vectors AMT-Free 8–
12 Year Municipal Index ETF; and VanEck Vectors
AMT-Free 12–17 Year Municipal Index ETF); 67985
4 17
E:\FR\FM\18SEN1.SGM
18SEN1
]]>Agencies
[Federal Register Volume 83, Number 181 (Tuesday, September 18, 2018)]
[Notices]
[Pages 47207-47210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20190]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84089; File No. SR-MIAX-2018-24]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Exchange Rule 404A, Select Provisions of
Options Listing Procedures Plan, Rule 406, Long-Term Option Contracts,
and Rule 1809, Terms of Index Options Contracts
September 12, 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 August 30, 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 and II below, which Items have been
prepared by the Exchange. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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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 Rule 404A, Select
Provisions of Options Listing Procedures Plan, Rule 406, Long-Term
Option Contracts, and Rule 1809, Terms of Index Options Contracts.
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.
[[Page 47208]]
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 MIAX Options Rule 404A, Select
Provisions of Options Listing Procedures Plan, Rule 406, Long-Term
Option Contracts, and Rule 1809, Terms of Index Options Contracts, to
conform its rules to the recently approved changes to the Options
Listing Procedures Plan (``OLPP''), as well as to the rules of other
exchanges.\3\ The Exchange, which is one of the Participant Exchanges
to the OLPP, currently has rules that are designed to incorporate the
requirements of the OLPP.\4\ All Participant Exchanges have similar
(essentially uniform) rules to ensure consistency and compliance with
the OLPP. The Exchange proposes to modify its rules to reflect the
recent updates described below, as well as to conform to the rules of
the other exchanges.
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\3\ See Securities Exchange Act Release Nos. 82235 (December 7,
2017), 82 FR 58688 (December 13, 2017) (order approving the Fourth
Amendment to the OLPP); 81893 (October 18, 2017), 82 FR 49249
(``OLPP Notice'').
\4\ In addition to the Exchange, the ``Participant Exchanges''
are: Cboe Exchange, Inc.; Cboe BZX Exchange, Inc.; BOX Options
Exchange, LLC; Cboe C2 Exchange, Inc.; Cboe EDGX Exchange, Inc.;
MIAX PEARL, LLC; Nasdaq BX, Inc.; Nasdaq GEMX, LLC; Nasdaq ISE, LLC;
Nasdaq MRX, LLC; Nasdaq Options Market, LLC; Nasdaq PHLX, LLC; NYSE
Arca, Inc.; and NYSE American, LLC.
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Addition of Long-Term Equity Options (``LEAPS'')
First, the OLPP has been amended to change the earliest date on
which new January LEAPS on equity options, options on Exchange Traded
Funds (``ETF''), or options on Trust Issued Receipts (``TIR'') may be
added to a single date (from three separate months). As noted in the
OLPP Notice, in the past, there were operational concerns related to
adding new January LEAPs series for all options classes on which LEAPs
were listed on a single trading day.\5\ And, the addition of new series
in a pre-electronic environment was a manual process. To accommodate
this, the addition of new January LEAPs series was spread across three
months (September, October, and November). Today, however, these
operational concerns related to January LEAPs have been alleviated as
new series can be added in bulk electronically. The Plan Participants,
including the Exchange, believe that moving the addition of new January
LEAPs series to no earlier than the Monday prior to the September
expiration would reduce marketplace confusion about available January
LEAPs series. Where previously January LEAPs series for options classes
on the February or March expiration cycles would not have been
available as early as January LEAPs series for options classes on the
January expiration cycle, under the proposed change, all January LEAPs
series will be available concurrently. Accordingly, to conform to this
change, the Exchange proposes to modify current Rule 406(b) to reflect
that new January LEAPS series on equity options classes, options on
ETFs, or options on TIRs, may not be added on a currently listed and
traded option class earlier than the Monday prior to the September
expiration (which is 28 months before the expiration).\6\
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\5\ See OLPP Notice at 49249.
\6\ See proposed Rule 406(b).
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Addition of Equity, ETF, and TIR Option Series After Regular Trading
Hours
Second, the OLPP has been amended to allow equity, ETF, and TIR
option series to be added based on trading after regular trading hours
(i.e., after-market). As noted in the OLPP Notice, the prior version of
the OLPP did not allow for option series to be added based on trading
following regular trading hours.\7\ As such, the Exchange Participants
were unable to add new option series that may result from trading
following regular trading hours until the next morning, depending on
the range of prices in pre-market trading, which is significant because
events that occur after regular trading hours, such as earnings
releases, often have an important impact on the price of an underlying
security. In addition, there are operational difficulties for market
participants throughout the industry adding series after system
startup. To avoid the potential burden that would result from the
inability to add series as a result of trading following regular
trading hours, the OLPP was amended to allow an additional category by
which the price of an underlying security may be measured.
Specifically, to conform to the amended OLPP, the Exchange proposes to
add subparagraph (b)(1)(iv) to Rule 404A to provide that ``for options
series to be added based on trading following regular trading hours,''
the price of the underlying security is measured by ``the most recent
share price reported by all national securities exchanges between 4:15
p.m. and 6:00 p.m. Eastern Time.'' \8\
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\7\ See OLPP Notice at 49250.
\8\ See proposed Rule 404A(b)(1)(iv). The Exchange proposes to
relocate ``and'' from subparagraph (ii) to (iii) to conform to the
change. See proposed Rule 404A(b)(1)(ii) and (iii).
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Technical Changes
The Exchange proposes to modify Rule 406(b) to delete now obsolete
operational language, which dates back to when LEAPs were first
adopted. The language in question provides that:
After a new long-term option contract series is listed, such
series will be opened for trading either when there is buying or
selling interest, or forty (40) minutes prior to the close,
whichever occurs first. No quotations will be posted for such
options series until they are opened for trading.
The Exchange proposes to delete this language because when this
language was adopted LEAPs were not opened for trading until late in
the trading day unless there was buying or selling interest. Today,
however, technological improvements allow the Exchange to open all LEAP
series at the same time as all other series in an option class.
For the same reasons as described above, the Exchange also proposes
to modify Rule 1809(b)(1)(ii) to delete similar obsolete operational
language, which relates to long-term index options series, and provides
that:
When a new long-term index options series is listed, such series
will be opened for trading either when there is buying or selling
interest, or forty (40) minutes prior to the close, whichever occurs
first. No quotations will be posted for such options series until
they are opened for trading.
Conforming Changes
The Exchange proposes to make certain changes to conform its rules
to the rules of other exchanges and to codify a certain provision in
the OLPP that is not currently included in its rules. First, the
Exchange proposes to add additional clarifying language to Rule 406(b).
Specifically, the Exchange proposes to add a paragraph to note that,
pursuant to the OLPP, ``exchanges that list and trade the same equity
option class, ETF option class, or TIR option class are authorized to
jointly determine and coordinate with the Options Clearing Corporation
on the date of introduction of new LEAP series for that option class
consistent with this paragraph (b).'' This clarifying language is
identical to language contained in other exchanges' rules.\9\
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\9\ For example, see Cboe Rule 5.8(b); see also NYSE Arca Rule
6.4-O(d)(ii).
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Second, Amendment 2 to the OLPP \10\ provided for a uniform minimum
[[Page 47209]]
volume threshold per underlying class to qualify for the introduction
of a new expiration year of LEAPS on equity, ETF and TIR classes. The
Exchange proposes to codify this change made to the OLPP by Amendment 2
as new subparagraph (c) to Rule 406 of the Exchange's rules.
Specifically, this provision will provide: ``The Exchange shall not
list new LEAP series on equity option classes, options on ETFs, or
options on TIRs in a new expiration year if the national average daily
contract volume, excluding LEAP and FLEX series, for that option class
during the preceding three (3) calendar months is less than 1,000
contracts, unless the new LEAP series has an expiration year that has
already been listed on another exchange for that option class. The
preceding volume threshold does not apply to the first six (6) months
an equity option class, option on an ETF or option on a TIR is listed
on any exchange.'' The Exchange notes that this conforming change is
necessary to align the rules of the Exchange with the OLPP and with
other exchanges.\11\
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\10\ See Securities Exchange Act Release No. 58630 (September
24, 2008), 73 FR 57166 (October 1, 2008) (Order granting permanent
approval to Amendment No. 2 to the Plan for the Purpose of
Developing and Implementing Procedures Designed to Facilitate the
Listing and Trading of Standardized Options).
\11\ For example, see Cboe Rule 5.8(c); see also NYSE Arca Rule
6.4-O(d)(iii).
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2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act \12\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \13\ 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 the
Section 6(b)(5) \14\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ Id.
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In particular, the proposed rule change, which conforms to the
recently adopted provisions of the OLPP, as amended, allows the
Exchange to continue to list extended far term option series that have
been viewed as beneficial to traders, investors and public customers.
Accordingly, the Exchange believes that the proposal is consistent with
the Act because it will allow the Exchange to list all January 2021
expiration series on the Monday prior to the September 2018 expiration.
Moreover, this change would simplify the process for adding new January
LEAP options series and reduce potential for investor confusion because
all new January LEAP options would be made available beginning at the
same time, consistent with the amended OLPP. The Exchange notes that
this proposal does not propose any new provisions that have not already
been approved by the Commission in the amended OLPP, but instead
maintains series listing rules that conform to the amended OLPP.
The proposal to permit series to be added based on after-market
trading is designed to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
facilitating transactions in securities, and to remove impediments to
and perfect the mechanisms of a free and open market and a national
market system, by allowing the Exchange to make series available for
trading with reduced operational difficulties. The Exchange notes that
this proposed change, which is consistent with the amended OLPP should
provide market participants with earlier notice regarding what options
series will be available for trading the following day, and should help
to enhance investors' ability to plan their options trading. The
Exchange also believes that the proposed technical changes, including
deleting obsolete language and reorganizing and consolidating the rule,
promote just and equitable principles of trade, foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and remove impediments to and perfect the mechanism of a
free and open market and a national market system. Furthermore, the
Exchange believes that the proposed conforming changes, adding language
to Rule 406, promote just and equitable principles of trade, foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and remove impediments to and perfect the
mechanism of a free and open market and a national market system by
providing clarity and consistency to the rules, and creating uniformity
amongst exchanges with respect to rules related to the OLPP.
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. Specifically, the Exchange
believes that by conforming Exchange rules to the amended OLPP, the
Exchange would promote regulatory clarity and consistency, thereby
reducing burdens on the marketplace and facilitating investor
protection. The Exchange believes that adopting rules, which it
anticipates will likewise be adopted by Participant Exchanges, would
allow for continued competition between Exchange market participants
trading similar products as their counterparts on other exchanges,
while at the same time allowing the Exchange to continue to compete for
order flow with other exchanges in option issues.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \15\ and Rule 19b-4(f)(6) thereunder.\16\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\17\
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\15\ 15 U.S.C. 78s(b)(3)(A)(iii).
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \18\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\19\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative
[[Page 47210]]
immediately upon filing. The Commission notes that the Exchange's
proposal would conform the Exchange's rules to the amended OLPP, which
the Commission previously approved.\20\ Accordingly, the Commission
believes that the proposal raises no new or novel regulatory issues and
waiver of the 30-day operative delay is consistent with the protection
of investors and the public interest. The Commission therefore waives
the 30-day operative delay and designates the proposed rule change to
be operative upon filing.\21\
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\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6)(iii).
\20\ See OLPP Notice, supra note 3.
\21\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \22\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\22\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-MIAX-2018-24 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-2018-24. 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-2018-24 and should be submitted on
or before October 9, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20190 Filed 9-17-18; 8:45 am]
BILLING CODE 8011-01-P
