Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 515, Execution of Orders, 24843-24846 [2019-11101]
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Federal Register / Vol. 84, No. 103 / Wednesday, May 29, 2019 / Notices
The proposed rule change is not
intended to address competitive issues
but rather is concerned solely with
amending the Independence Policy to
remove obsolete references and make
other non-substantive changes.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to 19(b)(3)(A)
of the Act 10 and Rule 19b–4(f)(6) 11
thereunder.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
khammond on DSKBBV9HB2PROD with NOTICES
• 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–
NYSEAMER–2019–020 on the subject
line.
10 15
U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
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Paper Comments
24843
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.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
Commission’s website at https://
www.sec.gov.
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.
The subject matters of the closed
meeting will consist of the following
topics:
STATUS:
• 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–NYSEAMER–2019–020.
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–NYSEAMER–2019–020 and
should be submitted on or before June
19, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Eduardo A. Aleman,
Deputy Secretary.
Institution and settlement of injunctive
actions;
Institution and settlement of administrative
proceedings;
Consideration of amicus participation;
Resolution of litigation claims; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Dated: May 23, 2019.
Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019–11239 Filed 5–24–19; 11:15 am]
BILLING CODE 8011–01–P
[FR Doc. 2019–11107 Filed 5–28–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
TIME AND DATE:
1:00 p.m. on Thursday,
May 30, 2019.
The meeting will be held at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
PLACE:
12 17
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CFR 200.30–3(a)(12).
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[Release No. 34–85920; File No. SR–
PEARL–2019–19]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Exchange
Rule 515, Execution of Orders
May 22, 2019.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
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Federal Register / Vol. 84, No. 103 / Wednesday, May 29, 2019 / Notices
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 16,
2019, MIAX PEARL, LLC (‘‘MIAX
PEARL’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
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 515, Execution of
Orders.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal
office, and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
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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 515, Execution of
Orders. Specifically, the Exchange
proposes to amend subsection (d)(2),
Managed Interest Process for NonRoutable Orders, to remove unnecessary
rule text from subsection (d)(2)(iv)
relating to timestamps on orders being
managed to conform the operation of the
rule to the current System 3 behavior.
Currently, the rule provides that an
order subject to the Managed Interest
Process for Non-Routable Orders under
subsection (d)(2) will retain its original
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The term ‘‘System’’ means the automated
trading system used by the Exchange for the trading
of securities. See Exchange Rule 100.
2 17
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limit price irrespective of the prices at
which such order is booked and
displayed and will maintain its original
timestamp, provided however each time
the order is booked and displayed at a
more aggressive Book price, the order
will receive a new timestamp. All orders
that are re-booked and re-displayed
pursuant to the Managed Interest
Process for Non-Routable Orders will
retain their priority as compared to
other orders subject to the Managed
Interest Process for Non-Routable
Orders, based upon the time such order
was initially received by the Exchange.4
The Exchange now proposes to
remove the provision that each time the
order is booked and displayed at a more
aggressive Book price, the order will
receive a new timestamp. This provision
is unnecessary as orders subject to the
Managed Interest Process for NonRoutable Orders are all managed to the
same ABBO,5 and the System is
maintaining the priority of these orders
relative to one and other based upon
their original timestamp. Giving these
orders a new timestamp is not necessary
as their priority relative to one and other
will not change. Further, the rule
already contains a provision that states,
‘‘[a]ll orders that are re-booked and redisplayed pursuant to the Managed
Interest Process for Non-Routable
Orders will retain their priority as
compared to other orders subject to the
Managed Interest Process for NonRoutable Orders, based upon the time
such order was initially received by the
Exchange.’’ 6
The Managed Interest Process for
Non-Routable Orders provides that if
the limit price of an order locks or
crosses the current opposite side
NBBO 7 and the PBBO 8 is inferior to the
NBBO, the System will display the
order one MPV 9 away from the current
opposite side NBBO, and book the order
at a price that will lock the current
opposite side NBBO. Should the NBBO
price change to an inferior price level,
the order’s Book price will continuously
re-price to lock the new NBBO and the
managed order’s displayed price will
4 See
Exchange Rule 515(d)(2)(iv).
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.
6 See supra note 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.
8 The term ‘‘PBBO’’ means the best bid or offer
on the PEARL Exchange. See Exchange Rule 100.
9 The term ‘‘MPV’’ means Minimum Price
Variations. See Exchange Rule 509.
5 The
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continuously re-price one MPV away
from the new NBBO until (A) the order
has traded to and including its limit
price, (B) the order has traded to and
including its price protection limit at
which time any remaining contracts are
cancelled, (C) the order is fully executed
or (D) the order is cancelled.10
The following example illustrates
multiple non-routable orders being
managed under the Exchange’s Managed
Interest Process for Non-Routable
Orders.
Example 1
Current Market in XYZ August 50 Calls
ABBO $2.50 (10) × $2.70 (10)
Post-Only 11 interest
Order 1 buy 100 contracts, Display Price:
$2.65, Book Price: $2.70, Limit Price:
$2.70 [Time of receipt: 10:00:30.100]
Order 2 buy 100 contracts, Display Price:
$2.65, Book Price: $2.70, Limit Price:
$2.70 [Time of receipt: 10:01:30.100]
The Post-Only interest cannot be posted at
its limit price of $2.70 as it would create a
locked market, therefore it is managed under
the Managed Interest Process for NonRoutable Orders as described in Exchange
Rule 515(d)(2)(ii) and booked at a price that
locks the current opposite side NBBO and
displayed at a price that is one MPV away
from the opposite side NBBO.
PBBO $2.65 (200) × $2.75 (10)
NBBO $2.65 (200) × $2.70 (10)
The interest at $2.70 on the away market
is executed and the new best offer to sell on
the away exchange is $2.80 at 10:04:45.100.
ABBO $2.50 (10) × $2.80 (10)
1. The System will manage the Post-Only
interest under the Managed Interest
Process for Non-Routable Orders and rebook each Post-Only Order at its limit
price and re-display the order at its limit
price.
2. Post-Only Order 1 to buy 100 contracts,
Display Price: $2.70, Book Price: $2.70.
Limit Price: $2.70 [updated at
10:04:45.500].
3. Post-Only Order 2 to buy 100 contracts,
Display Price: $2.70, Book Price: $2.70.
10 See
Exchange Rule 515(d)(2)(ii).
Orders’’ are orders that will not
remove liquidity from the Book. Post-Only Orders
are to be ranked and executed on the Exchange
pursuant to Rule 514 (Priority on the Exchange), or
handled pursuant to Rule 515, as appropriate, and
will never route away to another trading center.
Post-Only Orders are evaluated with respect to
locking or crossing other orders as follows: (i) If a
Post-Only Order would lock or cross an order on
the System, the order will be handled pursuant to
the Post-Only Process under Rule 515(g); or (ii) if
a Post-Only Order would not lock or cross an order
on the System but would lock or cross the ABBO
where the PBBO is inferior to the ABBO, the order
will be handled pursuant to the Managed Interest
Process under Rule 515(d). The handling of a PostOnly Order may move from one process to the other
(i.e., a Post-Only Order initially handled under the
Post-Only Price Process may upon reevaluation be
handled under the Managed Interest Process if the
PBBO changes and the Post-Only Order no longer
locks or crosses an order on the System but locks
or crosses the ABBO). See Exchange Rule 516(j).
11 ‘‘Post-Only
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Limit Price: $2.70 [updated at
10:04:46.000—Order 1 retains priority
over Order 2 based upon the original
timestamp of each order].
PBBO $2.70 (200) × $2.75 (10)
NBBO $2.70 (200) × $2.75 (10)
Current Market in XYZ August 50 Calls
ABBO $2.50 (10) × $2.80 (10)
PBBO $2.70 (200) × $2.75 (10)
Post-Only Interest
Order 1: Buy 100 contracts, Display Price:
$2.70, Book Price: $2.70, Limit Price:
$2.70
Order 2: Buy 100 contracts, Display Price:
$2.70, Book Price: $2.70, Limit Price:
$2.70
NBBO $2.70 (200) × $2.75 (10)
4. Post-Only Order 1 to buy 100 contracts
is booked and displayed at is original
and full limit price of $2.70 which is the
most aggressive permissible price.
5. Post-Only Order 2 to buy 100 contracts
is booked and displayed at is original
and full limit price of $2.70 which is the
most aggressive permissible price.
Order 3 Sell 100 contracts, Limit Price
$2.70 is received by the Exchange.
Consider Order 1, Order 2, and Order 3 as
Market Maker
1. Order 1 trades 100 contracts with Order
3 at $2.70.
2. Order 2 remains on the Book.
Current Market in XYZ August 50 Calls
PBBO $2.70 (100) × $2.75 (10)
ABBO $2.50 (10) × $2.80 (10)
NBBO $2.70 (100) × $2.75 (10)
The example demonstrates that the
relative priority between non-routable
orders remains the same regardless of
whether the orders receive a new
timestamp each time they are booked
and displayed at a more aggressive Book
price. In this example Order One is
received 60 seconds before Order Two,
thereby establishing its time priority. If
Order One and Order Two were to
receive new timestamps when each
order was booked and displayed at a
more aggressive price, Order One would
still retain its priority over Order Two
due to the fact that it would be handled
first in accordance to its original
timestamp and as a result would receive
a timestamp before Order Two.
The Exchange has a separate PostOnly Price (‘‘POP’’) Process 12 which is
engaged when the limit price of a PostOnly Order locks or crosses the current
opposite side PBBO where the PBBO is
the NBBO.13 A Post-Only Order may be
managed under the Managed Interest
Process for Non-Routable Orders or the
Post-Only Process depending upon
market conditions.14 A non Post-Only
Do Not Route (‘‘DNR’’) 15 order may
12 The Exchange notes that the POP Process is
unaffected by this proposal.
13 See Exchange Rule 515(g)(1).
14 See supra note 11.
15 A Do Not Route or ‘‘DNR’’ order is an order that
will never be routed outside of the Exchange
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only be managed under the Managed
Interest Process for Non-Routable
Orders. A Post-Only Order subject to the
POP Process will receive a new
timestamp each time the order is booked
and displayed at a more aggressive Book
price.16
Following is an example of the PostOnly Price Process.
Example 2
Current Market in XYZ August 50 Calls
PBBO $2.65 (100) × $2.75 (10)
Post-Only Interest
Order 1 buy 10 contracts, Display Price:
$2.70, Book Price: $2.70, Limit Price:
$2.80
Order 2 buy 10 contracts, Display Price:
$2.70, Book Price: $2.70, Limit Price:
$2.80
ABBO $2.65 (10) × $2.85 (10)
PBBO $2.70 (20) × $2.75 (10)
NBBO $2.70 (20) × $2.75 (10)
Non Post-Only DNR Interest
Order 3 buy 20 contracts, Limit price $2.80
(i) An Incoming Non Post-Only DNR
interest arrives to buy at $2.80 is executed
against the PBO, and the new best offer to
sell on the exchange becomes $2.85.
1. Order 3 trades 10 contracts with the PBO
at $2.75. The balance of Non Post-Only
Order 3 to buy 10 contracts is booked
and displayed at its original limit price
of $2.80.
(ii) The System will advance Order 1 and
Order 2 pursuant to the POP Process and rebook and re-display at a more aggressive
Book Price with a new timestamp pursuant
to the POP Process.
2. Post-Only Order 1 to buy 10 contracts is
re-booked and re-displayed with a new
time stamp at the Post-Only Order’s limit
price of $2.80.
3. Post-Only Order 2 to buy 10 contracts is
re-booked and re-displayed with a new
time stamp at the Post-Only Order’s limit
price of $2.80.
Updated Market in XYZ August 50 Calls
PBBO $2.80 (30) × $2.85 (10)
Non Post-Only interest
Order 3 buy 10 contracts, Display Price:
$2.80, Book Price: $2.80, Limit Price:
$2.80
Post-Only Interest
Order 1 buy 10 contracts, Display Price:
$2.80, Book Price: $2.80, Limit Price:
$2.80
Order 2 buy 10 contracts, Display Price:
$2.80, Book Price: $2.80, Limit Price:
$2.80
ABBO $2.65 (10) × $2.85 (10)
NBBO $2.80 (30) × $2.85 (20)
Non Post-Only Interest
Order 4 sell 11 contracts, Limit price $2.80
is received by the Exchange.
regardless of the prices displayed by away markets.
A DNR order may execute on the Exchange at a
price equal to or better than, but not inferior to, the
best away market price but, if that best away market
remains, the DNR order will be handled in
accordance with the Managed Interest Process
described in Rule 515(d)(2). See Exchange Rule
516(g).
16 See Exchange Rule 515(g)(3)(iv).
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24845
(iii) An Incoming Non Post-Only interest
arrives to sell at $2.80 is executed against the
PBB.
4. Order 3 trades 10 contracts with Order
4 at $2.80. Order 3 is exhausted and
leaves no balance.
5. Order 1 trades 1 contract with Order 4
at $2.80. The balance of Post-Only Order
1 to buy 9 contracts remains booked and
displayed at its original limit price of
$2.80.
6. Order 4 is exhausted and leaves no
balance.
7. Order 2 does not trade. Post-Only Order
2 to buy 10 contracts remains booked
and displayed at its original limit price
of $2.80.
Updated Market in XYZ August 50 Calls
ABBO $2.65 (10) × $2.85 (10)
PBBO $2.80 (19) × $2.85 (10)
NBBO $2.80 (19) × $2.85 (20)
The Exchange’s proposal to amend
the Managed Interest Process for NonRoutable Orders to remove the provision
from subsection (d)(iv) that provided
that each time an order is booked and
displayed at a more aggressive Book
price, the order would receive a new
timestamp conforms the rule to the
operation of the System. It is not
necessary for the System to give these
orders a new timestamp each time that
the order is re-booked and re-displayed
as all orders being managed under the
Managed Interest Process for NonRoutable Orders will maintain their
relative priority to each other as all
interest is being managed together to the
same ABBO. Conversely, only Post-Only
Orders are subject to the POP Process
and are managed to the PBBO, therefore
it is necessary to timestamp this interest
as there may be non-routable interest
that supersedes Post-Only interest as a
result of the Post-Only designation
which requires that Post-Only Orders
not remove liquidity from the Book.17
2. Statutory Basis
The Exchange believes that its
proposed rule changes are consistent
with Section 6(b) of the Act 18 in
general, and furthers the objectives of
Section 6(b)(5) of the Act 19 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
17 See
supra note 11.
U.S.C. 78f(b).
19 15 U.S.C. 78f(b)(5).
18 15
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general, to protect investors and the
public interest.
The Exchange believes its proposal
removes impediments to and perfects
the mechanisms of a free and open
market and a national market system as
the removal of the proposed rule text
does not have a substantive effect on the
relative priority of non-routable orders
being managed under the Exchange’s
Managed Interest Process for NonRoutable Orders. Non-routable orders
will retain their priority relative to other
orders subject to the Managed Interest
Process for Non-Routable Orders based
upon the time each order is received by
the Exchange.
The Exchange’s proposal to remove
unnecessary rule text from its rules
promotes just and equitable principles
of trade and removes impediments to
and perfects the mechanisms of a free
and open market and a national market
system and, in general, protects
investors and the public interest, by
adding clarity and precision to the
Exchange’s rules. The Exchange believes
it is the interest of investors and the
public to accurately describe the
behavior of the Exchange’s System in its
rules.
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 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 intra-market competition
as the rules of the Exchange apply
equally to all Members.20 The proposed
rule change is not a competitive filing
and is intended to enhance the
protection of investors and the public by
clarifying the operation of the
Exchange’s System.
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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 21 and Rule 19b–4(f)(6) 22
thereunder.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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–2019–19 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–2019–19. 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
21 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
22 17
20 The term ‘‘Member’’ means an individual or
organization that is registered with the Exchange
pursuant to Chapter II of MIAX PEARL Rules for
purposes of trading on the Exchange as an
‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’
Members are deemed ‘‘members’’ under the
Exchange Act. See Exchange Rule 100.
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submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–PEARL–2019–19 and
should be submitted on or before June
19, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–11101 Filed 5–28–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
33492; 813–00391]
Tudor Investment Corporation and
Tudor Employee Investment Fund LLC
May 23, 2019.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
Notice of application for an order
under sections 6(b) and 6(e) of the
Investment Company Act of 1940 (the
‘‘Act’’) granting an exemption from all
provisions of the Act and the rules and
regulations thereunder, except sections
9, 17, 30, and 36 through 53 of the Act,
and the rules and regulations
thereunder (the ‘‘Rules and
Regulations’’). With respect to sections
17(a), (d), (e), (f), (g) and (j) and 30(a),
(b), (e), and (h) of the Act, and the Rules
and Regulations, and rule 38a–1 under
23 17
E:\FR\FM\29MYN1.SGM
CFR 200.30–3(a)(12).
29MYN1
]]>Agencies
[Federal Register Volume 84, Number 103 (Wednesday, May 29, 2019)]
[Notices]
[Pages 24843-24846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11101]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85920; File No. SR-PEARL-2019-19]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange
Rule 515, Execution of Orders
May 22, 2019.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 24844]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 16, 2019, MIAX PEARL, LLC (``MIAX PEARL'' or the ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend Exchange Rule 515,
Execution of Orders.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/pearl at MIAX
PEARL's principal office, and at the Commission's Public Reference
Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
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 515, Execution of
Orders. Specifically, the Exchange proposes to amend subsection (d)(2),
Managed Interest Process for Non-Routable Orders, to remove unnecessary
rule text from subsection (d)(2)(iv) relating to timestamps on orders
being managed to conform the operation of the rule to the current
System \3\ behavior.
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\3\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
---------------------------------------------------------------------------
Currently, the rule provides that an order subject to the Managed
Interest Process for Non-Routable Orders under subsection (d)(2) will
retain its original limit price irrespective of the prices at which
such order is booked and displayed and will maintain its original
timestamp, provided however each time the order is booked and displayed
at a more aggressive Book price, the order will receive a new
timestamp. All orders that are re-booked and re-displayed pursuant to
the Managed Interest Process for Non-Routable Orders will retain their
priority as compared to other orders subject to the Managed Interest
Process for Non-Routable Orders, based upon the time such order was
initially received by the Exchange.\4\
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\4\ See Exchange Rule 515(d)(2)(iv).
---------------------------------------------------------------------------
The Exchange now proposes to remove the provision that each time
the order is booked and displayed at a more aggressive Book price, the
order will receive a new timestamp. This provision is unnecessary as
orders subject to the Managed Interest Process for Non-Routable Orders
are all managed to the same ABBO,\5\ and the System is maintaining the
priority of these orders relative to one and other based upon their
original timestamp. Giving these orders a new timestamp is not
necessary as their priority relative to one and other will not change.
Further, the rule already contains a provision that states, ``[a]ll
orders that are re-booked and re-displayed pursuant to the Managed
Interest Process for Non-Routable Orders will retain their priority as
compared to other orders subject to the Managed Interest Process for
Non-Routable Orders, based upon the time such order was initially
received by the Exchange.'' \6\
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\5\ 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.
\6\ See supra note 4.
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The Managed Interest Process for Non-Routable Orders provides that
if the limit price of an order locks or crosses the current opposite
side NBBO \7\ and the PBBO \8\ is inferior to the NBBO, the System will
display the order one MPV \9\ away from the current opposite side NBBO,
and book the order at a price that will lock the current opposite side
NBBO. Should the NBBO price change to an inferior price level, the
order's Book price will continuously re-price to lock the new NBBO and
the managed order's displayed price will continuously re-price one MPV
away from the new NBBO until (A) the order has traded to and including
its limit price, (B) the order has traded to and including its price
protection limit at which time any remaining contracts are cancelled,
(C) the order is fully executed or (D) the order is cancelled.\10\
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\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\ The term ``PBBO'' means the best bid or offer on the PEARL
Exchange. See Exchange Rule 100.
\9\ The term ``MPV'' means Minimum Price Variations. See
Exchange Rule 509.
\10\ See Exchange Rule 515(d)(2)(ii).
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The following example illustrates multiple non-routable orders
being managed under the Exchange's Managed Interest Process for Non-
Routable Orders.
Example 1
Current Market in XYZ August 50 Calls
ABBO $2.50 (10) x $2.70 (10)
Post-Only \11\ interest
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\11\ ``Post-Only Orders'' are orders that will not remove
liquidity from the Book. Post-Only Orders are to be ranked and
executed on the Exchange pursuant to Rule 514 (Priority on the
Exchange), or handled pursuant to Rule 515, as appropriate, and will
never route away to another trading center. Post-Only Orders are
evaluated with respect to locking or crossing other orders as
follows: (i) If a Post-Only Order would lock or cross an order on
the System, the order will be handled pursuant to the Post-Only
Process under Rule 515(g); or (ii) if a Post-Only Order would not
lock or cross an order on the System but would lock or cross the
ABBO where the PBBO is inferior to the ABBO, the order will be
handled pursuant to the Managed Interest Process under Rule 515(d).
The handling of a Post-Only Order may move from one process to the
other (i.e., a Post-Only Order initially handled under the Post-Only
Price Process may upon reevaluation be handled under the Managed
Interest Process if the PBBO changes and the Post-Only Order no
longer locks or crosses an order on the System but locks or crosses
the ABBO). See Exchange Rule 516(j).
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Order 1 buy 100 contracts, Display Price: $2.65, Book Price:
$2.70, Limit Price: $2.70 [Time of receipt: 10:00:30.100]
Order 2 buy 100 contracts, Display Price: $2.65, Book Price:
$2.70, Limit Price: $2.70 [Time of receipt: 10:01:30.100]
The Post-Only interest cannot be posted at its limit price of
$2.70 as it would create a locked market, therefore it is managed
under the Managed Interest Process for Non-Routable Orders as
described in Exchange Rule 515(d)(2)(ii) and booked at a price that
locks the current opposite side NBBO and displayed at a price that
is one MPV away from the opposite side NBBO.
PBBO $2.65 (200) x $2.75 (10)
NBBO $2.65 (200) x $2.70 (10)
The interest at $2.70 on the away market is executed and the new
best offer to sell on the away exchange is $2.80 at 10:04:45.100.
ABBO $2.50 (10) x $2.80 (10)
1. The System will manage the Post-Only interest under the
Managed Interest Process for Non-Routable Orders and re-book each
Post-Only Order at its limit price and re-display the order at its
limit price.
2. Post-Only Order 1 to buy 100 contracts, Display Price: $2.70,
Book Price: $2.70. Limit Price: $2.70 [updated at 10:04:45.500].
3. Post-Only Order 2 to buy 100 contracts, Display Price: $2.70,
Book Price: $2.70.
[[Page 24845]]
Limit Price: $2.70 [updated at 10:04:46.000--Order 1 retains
priority over Order 2 based upon the original timestamp of each
order].
PBBO $2.70 (200) x $2.75 (10)
NBBO $2.70 (200) x $2.75 (10)
Current Market in XYZ August 50 Calls
ABBO $2.50 (10) x $2.80 (10)
PBBO $2.70 (200) x $2.75 (10)
Post-Only Interest
Order 1: Buy 100 contracts, Display Price: $2.70, Book Price:
$2.70, Limit Price: $2.70
Order 2: Buy 100 contracts, Display Price: $2.70, Book Price:
$2.70, Limit Price: $2.70
NBBO $2.70 (200) x $2.75 (10)
4. Post-Only Order 1 to buy 100 contracts is booked and
displayed at is original and full limit price of $2.70 which is the
most aggressive permissible price.
5. Post-Only Order 2 to buy 100 contracts is booked and
displayed at is original and full limit price of $2.70 which is the
most aggressive permissible price.
Order 3 Sell 100 contracts, Limit Price $2.70 is received by the
Exchange.
Consider Order 1, Order 2, and Order 3 as Market Maker
1. Order 1 trades 100 contracts with Order 3 at $2.70.
2. Order 2 remains on the Book.
Current Market in XYZ August 50 Calls
PBBO $2.70 (100) x $2.75 (10)
ABBO $2.50 (10) x $2.80 (10)
NBBO $2.70 (100) x $2.75 (10)
The example demonstrates that the relative priority between non-
routable orders remains the same regardless of whether the orders
receive a new timestamp each time they are booked and displayed at a
more aggressive Book price. In this example Order One is received 60
seconds before Order Two, thereby establishing its time priority. If
Order One and Order Two were to receive new timestamps when each order
was booked and displayed at a more aggressive price, Order One would
still retain its priority over Order Two due to the fact that it would
be handled first in accordance to its original timestamp and as a
result would receive a timestamp before Order Two.
The Exchange has a separate Post-Only Price (``POP'') Process \12\
which is engaged when the limit price of a Post-Only Order locks or
crosses the current opposite side PBBO where the PBBO is the NBBO.\13\
A Post-Only Order may be managed under the Managed Interest Process for
Non-Routable Orders or the Post-Only Process depending upon market
conditions.\14\ A non Post-Only Do Not Route (``DNR'') \15\ order may
only be managed under the Managed Interest Process for Non-Routable
Orders. A Post-Only Order subject to the POP Process will receive a new
timestamp each time the order is booked and displayed at a more
aggressive Book price.\16\
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\12\ The Exchange notes that the POP Process is unaffected by
this proposal.
\13\ See Exchange Rule 515(g)(1).
\14\ See supra note 11.
\15\ 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. A DNR order may execute on the Exchange at a price
equal to or better than, but not inferior to, the best away market
price but, if that best away market remains, the DNR order will be
handled in accordance with the Managed Interest Process described in
Rule 515(d)(2). See Exchange Rule 516(g).
\16\ See Exchange Rule 515(g)(3)(iv).
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Following is an example of the Post-Only Price Process.
Example 2
Current Market in XYZ August 50 Calls
PBBO $2.65 (100) x $2.75 (10)
Post-Only Interest
Order 1 buy 10 contracts, Display Price: $2.70, Book Price:
$2.70, Limit Price: $2.80
Order 2 buy 10 contracts, Display Price: $2.70, Book Price:
$2.70, Limit Price: $2.80
ABBO $2.65 (10) x $2.85 (10)
PBBO $2.70 (20) x $2.75 (10)
NBBO $2.70 (20) x $2.75 (10)
Non Post-Only DNR Interest
Order 3 buy 20 contracts, Limit price $2.80
(i) An Incoming Non Post-Only DNR interest arrives to buy at
$2.80 is executed against the PBO, and the new best offer to sell on
the exchange becomes $2.85.
1. Order 3 trades 10 contracts with the PBO at $2.75. The
balance of Non Post-Only Order 3 to buy 10 contracts is booked and
displayed at its original limit price of $2.80.
(ii) The System will advance Order 1 and Order 2 pursuant to the
POP Process and re-book and re-display at a more aggressive Book
Price with a new timestamp pursuant to the POP Process.
2. Post-Only Order 1 to buy 10 contracts is re-booked and re-
displayed with a new time stamp at the Post-Only Order's limit price
of $2.80.
3. Post-Only Order 2 to buy 10 contracts is re-booked and re-
displayed with a new time stamp at the Post-Only Order's limit price
of $2.80.
Updated Market in XYZ August 50 Calls
PBBO $2.80 (30) x $2.85 (10)
Non Post-Only interest
Order 3 buy 10 contracts, Display Price: $2.80, Book Price:
$2.80, Limit Price: $2.80
Post-Only Interest
Order 1 buy 10 contracts, Display Price: $2.80, Book Price:
$2.80, Limit Price: $2.80
Order 2 buy 10 contracts, Display Price: $2.80, Book Price:
$2.80, Limit Price: $2.80
ABBO $2.65 (10) x $2.85 (10)
NBBO $2.80 (30) x $2.85 (20)
Non Post-Only Interest
Order 4 sell 11 contracts, Limit price $2.80 is received by the
Exchange.
(iii) An Incoming Non Post-Only interest arrives to sell at
$2.80 is executed against the PBB.
4. Order 3 trades 10 contracts with Order 4 at $2.80. Order 3 is
exhausted and leaves no balance.
5. Order 1 trades 1 contract with Order 4 at $2.80. The balance
of Post-Only Order 1 to buy 9 contracts remains booked and displayed
at its original limit price of $2.80.
6. Order 4 is exhausted and leaves no balance.
7. Order 2 does not trade. Post-Only Order 2 to buy 10 contracts
remains booked and displayed at its original limit price of $2.80.
Updated Market in XYZ August 50 Calls
ABBO $2.65 (10) x $2.85 (10)
PBBO $2.80 (19) x $2.85 (10)
NBBO $2.80 (19) x $2.85 (20)
The Exchange's proposal to amend the Managed Interest Process for
Non-Routable Orders to remove the provision from subsection (d)(iv)
that provided that each time an order is booked and displayed at a more
aggressive Book price, the order would receive a new timestamp conforms
the rule to the operation of the System. It is not necessary for the
System to give these orders a new timestamp each time that the order is
re-booked and re-displayed as all orders being managed under the
Managed Interest Process for Non-Routable Orders will maintain their
relative priority to each other as all interest is being managed
together to the same ABBO. Conversely, only Post-Only Orders are
subject to the POP Process and are managed to the PBBO, therefore it is
necessary to timestamp this interest as there may be non-routable
interest that supersedes Post-Only interest as a result of the Post-
Only designation which requires that Post-Only Orders not remove
liquidity from the Book.\17\
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\17\ See supra note 11.
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2. Statutory Basis
The Exchange believes that its proposed rule changes are consistent
with Section 6(b) of the Act \18\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \19\ 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
[[Page 24846]]
general, to protect investors and the public interest.
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\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(5).
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The Exchange believes its proposal removes impediments to and
perfects the mechanisms of a free and open market and a national market
system as the removal of the proposed rule text does not have a
substantive effect on the relative priority of non-routable orders
being managed under the Exchange's Managed Interest Process for Non-
Routable Orders. Non-routable orders will retain their priority
relative to other orders subject to the Managed Interest Process for
Non-Routable Orders based upon the time each order is received by the
Exchange.
The Exchange's proposal to remove unnecessary rule text from its
rules promotes just and equitable principles of trade and removes
impediments to and perfects the mechanisms of a free and open market
and a national market system and, in general, protects investors and
the public interest, by adding clarity and precision to the Exchange's
rules. The Exchange believes it is the interest of investors and the
public to accurately describe the behavior of the Exchange's System in
its rules.
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 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 intra-market competition as the rules of the
Exchange apply equally to all Members.\20\ The proposed rule change is
not a competitive filing and is intended to enhance the protection of
investors and the public by clarifying the operation of the Exchange's
System.
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\20\ The term ``Member'' means an individual or organization
that is registered with the Exchange pursuant to Chapter II of MIAX
PEARL Rules for purposes of trading on the Exchange as an
``Electronic Exchange Member'' or ``Market Maker.'' Members are
deemed ``members'' under the Exchange Act. See Exchange Rule 100.
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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 \21\ and Rule 19b-4(f)(6) \22\
thereunder.
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\21\ 15 U.S.C. 78s(b)(3)(A).
\22\ 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-2019-19 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-2019-19. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-PEARL-2019-19 and should be submitted on
or before June 19, 2019.
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,
Deputy Secretary.
[FR Doc. 2019-11101 Filed 5-28-19; 8:45 am]
BILLING CODE 8011-01-P
