Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make a Minor Adjustment to the Calculation Methodology for the BRIXXTM, 60923-60926 [2021-24012]

Download as PDF Federal Register / Vol. 86, No. 211 / Thursday, November 4, 2021 / Notices 3642 and 3632(b)(3), on October 20, 2021, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Contract 726 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2022–12, CP2022–13. Sean Robinson, Attorney, Corporate and Postal Business Law. [FR Doc. 2021–24002 Filed 11–3–21; 8:45 am] BILLING CODE 7710–12–P [FR Doc. 2021–24003 Filed 11–3–21; 8:45 am] Product Change—Priority Mail and First-Class Package Service Negotiated Service Agreement BILLING CODE 7710–12–P SECURITIES AND EXCHANGE COMMISSION Postal ServiceTM. ACTION: Notice. AGENCY: The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Date of required notice: November 4, 2021. FOR FURTHER INFORMATION CONTACT: Sean Robinson, 202–268–8405. SUPPLEMENTARY INFORMATION: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on October 28, 2021, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail & First-Class Package Service Contract 208 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2022–15, CP2022–16. SUMMARY: Sean Robinson, Attorney, Corporate and Postal Business Law. [FR Doc. 2021–24005 Filed 11–3–21; 8:45 am] BILLING CODE 7710–12–P POSTAL SERVICE Product Change—Priority Mail Express Negotiated Service Agreement Postal ServiceTM. Notice. AGENCY: The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Date of required notice: November 4, 2021. lotter on DSK11XQN23PROD with NOTICES1 SUMMARY: VerDate Sep<11>2014 17:57 Nov 03, 2021 Sean Robinson, 202–268–8405. SUPPLEMENTARY INFORMATION: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on October 21, 2021, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express Contract 93 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2022–13, CP2022–14. Sean Robinson, Attorney, Corporate and Postal Business Law. POSTAL SERVICE ACTION: FOR FURTHER INFORMATION CONTACT: Jkt 256001 [Release No. 34–93463; File No. SR–MIAX– 2021–52] Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make a Minor Adjustment to the Calculation Methodology for the BRIXXTM Commercial Real Estate Indexes October 29, 2021. 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 October 18, 2021, Miami International Securities Exchange, LLC (‘‘MIAX Options’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to make a minor adjustment to the calculation methodology for the BRIXXTM Commercial Real Estate Indexes (the ‘‘BRIXX Indexes’’), on which the Exchange may list and trade options. 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. 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00133 Fmt 4703 Sfmt 4703 60923 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 make a minor adjustment to the calculation methodology for each of the sector BRIXX Indexes—the BRIXX Office Index, BRIXX Retail Index, BRIXX Residential Index, and BRIXX Hospitality Index (collectively, the ‘‘BRIXX Sector Indexes’’), on which the Exchange may list and trade options.3 The Exchange does not propose to amend the methodology for the BRIXX Composite Index at this time. Background On April 17, 2020, the Exchange filed its proposal to list and trade options on five AF CRE Indexes (the AF CRE Residential Index, AF CRE Retail Index, AF CRE Office Index, AF CRE Hospitality Index and AF CRE Composite Index),4 all of which have since been rebranded as the BRIXX Indexes.5 In the AF CRE Index Notice, the Exchange described, among other things, the component selection criteria in order for an equity real estate 3 On April 16, 2020, the Exchange filed a Form 19b–4(e) with the Commission pursuant to Rule 19b–4(e) of the Act to list and trade options on the Advanced Fundamentals Commercial Real Estate Indexes (the ‘‘AF CRE Indexes’’), which have since been rebranded as the BRIXX Indexes. See Securities Exchange Act Release No. 91542 (April 13, 2021), 86 FR 20426 (April 19, 2021) (SR–MIAX– 2021–09). The Exchange has not yet listed options for trading on the BRIXX Indexes for business reasons. The Exchange notes that it will file a new Form 19b–4(e) with the Commission pursuant to Rule 19b–4(e) of the Act to list and trade options on the BRIXX Indexes at the time the Exchange anticipates it will begin listing options for trading. 4 See Securities Exchange Act Release No. 88767 (April 29, 2020), 85 FR 26743 (May 5, 2020) (SR– MIAX–2020–08) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to List and Trade Options That Overlie Five Advanced Fundamentals LLC Commercial Real Estate Indexes) (the ‘‘AF CRE Index Notice’’). 5 See supra note 3. E:\FR\FM\04NON1.SGM 04NON1 60924 Federal Register / Vol. 86, No. 211 / Thursday, November 4, 2021 / Notices lotter on DSK11XQN23PROD with NOTICES1 investment trust (‘‘REIT’’) to be included in the calculation of each index. In particular, the composition of each index is determined in a reconstitution on a quarterly basis from audited REIT company public filings and supplemental filings with the Commission, updated each quarter and intra-quarter based on 8–K, 10–Q, and 10–K filings. The components in each of the indexes are determined from the REITs that have the largest enterprise value (‘‘Enterprise Value’’) 6 within each individual sector and that meet the following minimum eligibility requirements. To be eligible for inclusion in each of the BRIXX Sector Indexes, a REIT must: (i) Be classified as an equity REIT; (ii) be listed on a U.S. securities exchange; (iii) have a minimum Enterprise Value of $1 billion; (iv) have at least 85% of its revenue derived from the associated asset class; and (v) have issued a quarterly filing or annual report after its initial listing. Proposal The Exchange now proposes to modify the condition in romanette (iv), above, for an equity REIT to be eligible for inclusion in each of the BRIXX Sector Indexes. With the proposed change, to be eligible for inclusion in each of the BRIXX Sector Indexes, an equity company/REIT must have at least 70% of its revenue derived from the associated asset class. The Exchange does not propose to amend any other criteria for inclusion in the BRIXX Sector Indexes. The purpose of this change is to ensure a broad scope of REITs that may be included in the calculation of each BRIXX Sector Index while continuing to maintain that each component REIT derive substantial revenue from the associated asset class. The Exchange believes that with the proposed change, there will be a greater pool of equity REITs that may qualify for inclusion in each of the BRIXX Sector Index calculations, while continuing to ensure that the integrity of each BRIXX Sector Index will not be compromised. Further, with the proposed change, each BRIXX Sector Index will continue to be comprised of equity REITs representative of each particular sector of commercial real estate. The Exchange also believes that this proposal will continue to provide transparency 6 The term ‘‘Enterprise Value’’ refers to the measure of a company’s total value, calculated by adding the company’s market capitalization, total liabilities and preferred equity, then subtracting all cash and cash equivalents. See https:// www.investopedia.com/terms/e/enterprise value.asp. VerDate Sep<11>2014 17:57 Nov 03, 2021 Jkt 256001 regarding the calculation methodology for the BRIXX Sector Indexes. The Exchange represents that the proposed change will have no impact on the accuracy and dissemination of the BRIXX Sector Index values, which will continue to be disseminated and available to market participants in the same manner and in the same intervals. The proposed change will be made before the Exchange launches options on the BRIXX Sector Indexes. The Exchange intends that this filing is to provide market participants with an update regarding the proposed change to one condition of the component selection criteria, which criteria was included in the initial filing to list and trade options on the AF CRE Indexes (since rebranded as the BRIXX Indexes), as described in the AF CRE Index Notice.7 The Exchange notes that this filing does not propose to amend any of the Exchange’s generic initial and maintenance listing criteria, as set forth in Exchange Rules 1802(b)–(e). Further, the Exchange notes that with the proposed change to modify one of the conditions to the component selection criteria, the BRIXX Sector Indexes will continue to satisfy the Exchange’s initial and maintenance listing criteria for narrow-based indexes pursuant to the Exchange’s current rules.8 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.9 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 10 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 11 requirement that the rules of an exchange not be designed 7 See supra note 4, pages 10–11. Exchange Rule 1802(b)–(c). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 11 Id. 8 See PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange believes that the proposed rule changes remove impediments to and perfects the mechanism of a free and open market a national market system, and protects investors and the public interest by updating the methodology to determine which component securities are eligible for inclusion in each of the BRIXX Sector Indexes. The proposed change will have no impact on the dissemination of BRIXX Sector Index values; rather, the proposed change is intended to provide an update to market participants regarding the wider eligibility of certain components in the calculation of each index. The Exchange believes that by broadening the scope of potential equity REITs that may be included in each of the BRIXX Sector Indexes, this will ensure that no single equity REIT dominates each index. The Exchange believes this proposal perfects the mechanism of a free and open market a national market system, and protects investors and the public interest because, with the proposed change, there will be no change to the initial or maintenance listing criteria, expiration months, settlement or exercise style of options on the BRIXX Sector Indexes. Further, the Exchange believes that the proposed change will have no impact on the accuracy and dissemination of the BRIXX Sector Index values, which will continue to be disseminated and available to market participants in the same manner and in the same intervals. The Exchange notes that it has not listed options on the BRIXX Indexes at this time. The Exchange believes that the proposal satisfies the requirements of Section 6(b)(5) 12 of the Act because, with the proposed change, each of the BRIXX Sector Indexes will continue to satisfy the initial listing criteria for narrow-based indexes pursuant to the Exchange’s current rules.13 The Exchange notes that the initial listing criteria in Exchange Rule 1802(b) covers the following categories of requirements, in general, for each of the BRIXX Sector Indexes: That options are A.M-settled; each index is modifiedmarket capitalization weighted; specified minimum market capitalizations for each component security; specified minimum trading volumes over certain time periods for each component security; specified maximum weighting for the combined weight of the five highest weighted component securities in each index; 12 15 U.S.C. 78f(b)(5). Exchange Rule 1802(b). 13 See E:\FR\FM\04NON1.SGM 04NON1 Federal Register / Vol. 86, No. 211 / Thursday, November 4, 2021 / Notices specified maximum weights for each individual component security; that each component security is an ‘‘NMS stock’’ as defined in Rule 600 of Regulation NMS under the Act; and, that each index is widely disseminated at least once every 15 seconds by OPRA, CTA/CQ, NIDS or one or more major market data vendors.14 The Exchange also believes that, with the proposed modified eligibility criteria, that each of the BRIXX Sector Indexes will continue to satisfy the maintenance listing standards set forth in Exchange Rule 1802(c). The Exchange notes that the maintenance listing criteria in Exchange Rule 1802(c) covers the following categories of requirements, in general, for each of the BRIXX Sector Indexes: That the initial listing criteria set forth in Exchange Rule 1802(b)(1), (3), (6)– (12) continue to be satisfied; specified percentages that the total number of component securities may increase or decrease by from the time of initial listing; and specified trading volumes over six months.15 Notwithstanding the proposed change in component selection criteria, there will be no change to the current generic initial and maintenance listing criteria. This proposed change will have no impact on, or effect application and interpretation of, the initial and maintenance listing criteria in Exchange Rules 1802(b)–(c). The purpose of this prosed change is to update potential market participants regarding the component selection criteria used for each of the BRIXX Sector Indexes. The Exchange represents that it will continue to have the necessary systems capacity to support the new option series for each of the BRIXX Sector Indexes given the proposed modification once the Exchange determines to list options on the BRIXX Sector Indexes. lotter on DSK11XQN23PROD with NOTICES1 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. Intra-Market Competition The Exchange does not believe that the proposed change will impose any burden on intra-market that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed change is not intended to address a competitive issue. Rather, the proposed change is to update one piece 14 See 15 See id. Exchange Rule 1802(c). VerDate Sep<11>2014 17:57 Nov 03, 2021 Jkt 256001 60925 of the calculation methodology for the BRIXX Sector Indexes, on which the Exchange is authorized to list options. The proposed rule change has no impact on the dissemination of index values for the BRIXX Indexes. Further, the Exchange has not yet listed options for trading on the BRIXX Indexes at this time. 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. Inter-Market Competition The Exchange does not believe the propose change will impose any burden on inter-market competition because the proposed rule change will continue to facilitate the listing and trading of novel options products that will enhance competition for commercial real estate securities among market participants, to the benefit of investors and the marketplace. This proposal furthers the Exchange’s goal of listing options on the BRIXX Indexes, which will enhance competition by providing investors with an additional investment vehicle, in a fully-electronic trading environment, through which investors can gain and hedge exposure to various sectors of the commercial real estate market. Further, these products could offer a competitive alternative to other existing investment products that seek to allow investors to gain broad market exposure via equity REITs in the same individual sectors as the BRIXX Indexes. 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: 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 16 and Rule 19b–4(f)(6) 17 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 16 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. 17 17 PO 00000 Frm 00135 Fmt 4703 Sfmt 4703 Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– MIAX–2021–52 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–2021–52. 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 E:\FR\FM\04NON1.SGM 04NON1 60926 Federal Register / Vol. 86, No. 211 / Thursday, November 4, 2021 / Notices submissions should refer to File Number SR–MIAX–2021–52 and should be submitted on or before November 26, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 J. Matthew DeLesDernier, Assistant Secretary. Vanessa A. Countryman from the Office of the Secretary at (202) 551–5400. Authority: 5 U.S.C. 552b. Dated: November 2, 2021. Vanessa A. Countryman, Secretary. [FR Doc. 2021–24222 Filed 11–2–21; 4:15 pm] BILLING CODE 8011–01–P [FR Doc. 2021–24012 Filed 11–3–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93472; File No. SR– NYSEArca–2021–91] Sunshine Act Meetings 1:30 p.m. on Tuesday, November 9, 2021. PLACE: The meeting will be held via remote means and/or at the Commission’s headquarters, 100 F Street NE, Washington, DC 20549. STATUS: This meeting will be closed to the public. MATTERS TO BE CONSIDERED: Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present. 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 matter of the closed meeting will consist of the following topics: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; Resolution of litigation claims; and Other matters relating to examinations and 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 lotter on DSK11XQN23PROD with NOTICES1 TIME AND DATE: Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change to Amend Rule 6.87–O October 29, 2021. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 20, 2021, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. 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 proposes to amend Rule 6.87–O to improve the operation of the Rule. The proposed change is available on the Exchange’s website at www.nyse.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 self-regulatory organization 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 those 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. 15 U.S.C. 78s(b)(1). 15 U.S.C. 78a. 3 17 CFR 240.19b 4. 1 2 18 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:57 Nov 03, 2021 Jkt 256001 PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this rule change is to amend Rule 6.87–O ‘‘Nullification and Adjustment of Options Transactions including Obvious Errors’’ to improve the operation of the Rule. Following discussions with other exchanges and a cross-section of industry participants and in coordination with the Listed Options Market Structure Working Group (‘‘LOMSWG’’) (collectively, the ‘‘Industry Working Group’’), the Exchange proposes: (1) To amend section (b)(3) of the Rule to permit the Exchange to determine the Theoretical Price of a Customer option transaction in a wide market so long as a narrow market exists at any point during the 10second period after an opening or reopening; and (2) to amend section (c)(4)(B) of the Rule to adjust, rather than nullify, Customer transactions in Obvious Error situations, provided the adjustment does not violate the limit price. The Exchange understands that upon approval of this proposal, other options exchanges will also submit substantively identical proposals to the Commission. Proposed Change to Section (b)(3) Rule 6.87–O has been part of various harmonization efforts by the Industry Working Group.4 These efforts have often centered around the Theoretical Price for which an options transaction should be compared to determine whether an Obvious Error has occurred. For instance, all options exchanges have adopted language comparable to Commentary .06,5 which explains how an exchange is to determine Theoretical Price at the open, when there are no valid quotes, and when there is a wide quote. This includes at times the use of a singular third-party vendor, known as a TP Provider (currently CBOE Livevol, LLC). Similarly, section (b)(3) of Rule 6.87– O was previously harmonized across all options exchanges to handle situations where executions occur in markets that are wide (as set forth in the rule).6 Under that section, the Exchange 4 See, e.g., Securities Exchange Act Release Nos. 74921 (May 8, 2015), 80 FR 27747 (May 14, 2015) (SR–NYSEArca-2015–41); 80496 (April 20, 2017), 82 FR 19282 (April 26, 2017) (SR–NYSEArca-2017– 42). 5 See, e.g., Securities Exchange Act Release No. 81580 (September 12, 2017), 82 FR 43578 (September 18, 2017) (SR–NYSEArca-2017–101). 6 See, e.g., Securities Exchange Act Release No. 74921 (May 8, 2015), 80 FR 27747 (May 14, 2015) (SR–NYSEArca–2015–41). E:\FR\FM\04NON1.SGM 04NON1

Agencies

[Federal Register Volume 86, Number 211 (Thursday, November 4, 2021)]
[Notices]
[Pages 60923-60926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24012]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93463; File No. SR-MIAX-2021-52]


Self-Regulatory Organizations; Miami International Securities 
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Make a Minor Adjustment to the Calculation 
Methodology for the BRIXX\TM\ Commercial Real Estate Indexes

October 29, 2021.
    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 October 18, 2021, Miami International Securities Exchange, LLC 
(``MIAX Options'' or ``Exchange'') filed with the Securities and 
Exchange Commission (``Commission'') a proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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 make a minor adjustment to the 
calculation methodology for the BRIXX\TM\ Commercial Real Estate 
Indexes (the ``BRIXX Indexes''), on which the Exchange may list and 
trade options.
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxoptions.com/rule-filings/ at MIAX Options' 
principal office, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to make a minor adjustment to the calculation 
methodology for each of the sector BRIXX Indexes--the BRIXX Office 
Index, BRIXX Retail Index, BRIXX Residential Index, and BRIXX 
Hospitality Index (collectively, the ``BRIXX Sector Indexes''), on 
which the Exchange may list and trade options.\3\ The Exchange does not 
propose to amend the methodology for the BRIXX Composite Index at this 
time.
---------------------------------------------------------------------------

    \3\ On April 16, 2020, the Exchange filed a Form 19b-4(e) with 
the Commission pursuant to Rule 19b-4(e) of the Act to list and 
trade options on the Advanced Fundamentals Commercial Real Estate 
Indexes (the ``AF CRE Indexes''), which have since been rebranded as 
the BRIXX Indexes. See Securities Exchange Act Release No. 91542 
(April 13, 2021), 86 FR 20426 (April 19, 2021) (SR-MIAX-2021-09). 
The Exchange has not yet listed options for trading on the BRIXX 
Indexes for business reasons. The Exchange notes that it will file a 
new Form 19b-4(e) with the Commission pursuant to Rule 19b-4(e) of 
the Act to list and trade options on the BRIXX Indexes at the time 
the Exchange anticipates it will begin listing options for trading.
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Background
    On April 17, 2020, the Exchange filed its proposal to list and 
trade options on five AF CRE Indexes (the AF CRE Residential Index, AF 
CRE Retail Index, AF CRE Office Index, AF CRE Hospitality Index and AF 
CRE Composite Index),\4\ all of which have since been rebranded as the 
BRIXX Indexes.\5\ In the AF CRE Index Notice, the Exchange described, 
among other things, the component selection criteria in order for an 
equity real estate

[[Page 60924]]

investment trust (``REIT'') to be included in the calculation of each 
index.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 88767 (April 29, 
2020), 85 FR 26743 (May 5, 2020) (SR-MIAX-2020-08) (Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change to List and 
Trade Options That Overlie Five Advanced Fundamentals LLC Commercial 
Real Estate Indexes) (the ``AF CRE Index Notice'').
    \5\ See supra note 3.
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    In particular, the composition of each index is determined in a 
reconstitution on a quarterly basis from audited REIT company public 
filings and supplemental filings with the Commission, updated each 
quarter and intra-quarter based on 8-K, 10-Q, and 10-K filings. The 
components in each of the indexes are determined from the REITs that 
have the largest enterprise value (``Enterprise Value'') \6\ within 
each individual sector and that meet the following minimum eligibility 
requirements. To be eligible for inclusion in each of the BRIXX Sector 
Indexes, a REIT must: (i) Be classified as an equity REIT; (ii) be 
listed on a U.S. securities exchange; (iii) have a minimum Enterprise 
Value of $1 billion; (iv) have at least 85% of its revenue derived from 
the associated asset class; and (v) have issued a quarterly filing or 
annual report after its initial listing.
---------------------------------------------------------------------------

    \6\ The term ``Enterprise Value'' refers to the measure of a 
company's total value, calculated by adding the company's market 
capitalization, total liabilities and preferred equity, then 
subtracting all cash and cash equivalents. See https://www.investopedia.com/terms/e/enterprisevalue.asp.
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Proposal
    The Exchange now proposes to modify the condition in romanette 
(iv), above, for an equity REIT to be eligible for inclusion in each of 
the BRIXX Sector Indexes. With the proposed change, to be eligible for 
inclusion in each of the BRIXX Sector Indexes, an equity company/REIT 
must have at least 70% of its revenue derived from the associated asset 
class. The Exchange does not propose to amend any other criteria for 
inclusion in the BRIXX Sector Indexes. The purpose of this change is to 
ensure a broad scope of REITs that may be included in the calculation 
of each BRIXX Sector Index while continuing to maintain that each 
component REIT derive substantial revenue from the associated asset 
class. The Exchange believes that with the proposed change, there will 
be a greater pool of equity REITs that may qualify for inclusion in 
each of the BRIXX Sector Index calculations, while continuing to ensure 
that the integrity of each BRIXX Sector Index will not be compromised.
    Further, with the proposed change, each BRIXX Sector Index will 
continue to be comprised of equity REITs representative of each 
particular sector of commercial real estate. The Exchange also believes 
that this proposal will continue to provide transparency regarding the 
calculation methodology for the BRIXX Sector Indexes. The Exchange 
represents that the proposed change will have no impact on the accuracy 
and dissemination of the BRIXX Sector Index values, which will continue 
to be disseminated and available to market participants in the same 
manner and in the same intervals. The proposed change will be made 
before the Exchange launches options on the BRIXX Sector Indexes.
    The Exchange intends that this filing is to provide market 
participants with an update regarding the proposed change to one 
condition of the component selection criteria, which criteria was 
included in the initial filing to list and trade options on the AF CRE 
Indexes (since rebranded as the BRIXX Indexes), as described in the AF 
CRE Index Notice.\7\ The Exchange notes that this filing does not 
propose to amend any of the Exchange's generic initial and maintenance 
listing criteria, as set forth in Exchange Rules 1802(b)-(e). Further, 
the Exchange notes that with the proposed change to modify one of the 
conditions to the component selection criteria, the BRIXX Sector 
Indexes will continue to satisfy the Exchange's initial and maintenance 
listing criteria for narrow-based indexes pursuant to the Exchange's 
current rules.\8\
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    \7\ See supra note 4, pages 10-11.
    \8\ See Exchange Rule 1802(b)-(c).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\9\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \10\ requirements that the rules of 
an exchange be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \11\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ Id.
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    The Exchange believes that the proposed rule changes remove 
impediments to and perfects the mechanism of a free and open market a 
national market system, and protects investors and the public interest 
by updating the methodology to determine which component securities are 
eligible for inclusion in each of the BRIXX Sector Indexes. The 
proposed change will have no impact on the dissemination of BRIXX 
Sector Index values; rather, the proposed change is intended to provide 
an update to market participants regarding the wider eligibility of 
certain components in the calculation of each index. The Exchange 
believes that by broadening the scope of potential equity REITs that 
may be included in each of the BRIXX Sector Indexes, this will ensure 
that no single equity REIT dominates each index. The Exchange believes 
this proposal perfects the mechanism of a free and open market a 
national market system, and protects investors and the public interest 
because, with the proposed change, there will be no change to the 
initial or maintenance listing criteria, expiration months, settlement 
or exercise style of options on the BRIXX Sector Indexes. Further, the 
Exchange believes that the proposed change will have no impact on the 
accuracy and dissemination of the BRIXX Sector Index values, which will 
continue to be disseminated and available to market participants in the 
same manner and in the same intervals. The Exchange notes that it has 
not listed options on the BRIXX Indexes at this time.
    The Exchange believes that the proposal satisfies the requirements 
of Section 6(b)(5) \12\ of the Act because, with the proposed change, 
each of the BRIXX Sector Indexes will continue to satisfy the initial 
listing criteria for narrow-based indexes pursuant to the Exchange's 
current rules.\13\ The Exchange notes that the initial listing criteria 
in Exchange Rule 1802(b) covers the following categories of 
requirements, in general, for each of the BRIXX Sector Indexes: That 
options are A.M-settled; each index is modified-market capitalization 
weighted; specified minimum market capitalizations for each component 
security; specified minimum trading volumes over certain time periods 
for each component security; specified maximum weighting for the 
combined weight of the five highest weighted component securities in 
each index;

[[Page 60925]]

specified maximum weights for each individual component security; that 
each component security is an ``NMS stock'' as defined in Rule 600 of 
Regulation NMS under the Act; and, that each index is widely 
disseminated at least once every 15 seconds by OPRA, CTA/CQ, NIDS or 
one or more major market data vendors.\14\ The Exchange also believes 
that, with the proposed modified eligibility criteria, that each of the 
BRIXX Sector Indexes will continue to satisfy the maintenance listing 
standards set forth in Exchange Rule 1802(c). The Exchange notes that 
the maintenance listing criteria in Exchange Rule 1802(c) covers the 
following categories of requirements, in general, for each of the BRIXX 
Sector Indexes: That the initial listing criteria set forth in Exchange 
Rule 1802(b)(1), (3), (6)-(12) continue to be satisfied; specified 
percentages that the total number of component securities may increase 
or decrease by from the time of initial listing; and specified trading 
volumes over six months.\15\ Notwithstanding the proposed change in 
component selection criteria, there will be no change to the current 
generic initial and maintenance listing criteria. This proposed change 
will have no impact on, or effect application and interpretation of, 
the initial and maintenance listing criteria in Exchange Rules 1802(b)-
(c). The purpose of this prosed change is to update potential market 
participants regarding the component selection criteria used for each 
of the BRIXX Sector Indexes.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(5).
    \13\ See Exchange Rule 1802(b).
    \14\ See id.
    \15\ See Exchange Rule 1802(c).
---------------------------------------------------------------------------

    The Exchange represents that it will continue to have the necessary 
systems capacity to support the new option series for each of the BRIXX 
Sector Indexes given the proposed modification once the Exchange 
determines to list options on the BRIXX Sector Indexes.

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.
Intra-Market Competition
    The Exchange does not believe that the proposed change will impose 
any burden on intra-market that is not necessary or appropriate in 
furtherance of the purposes of the Act because the proposed change is 
not intended to address a competitive issue. Rather, the proposed 
change is to update one piece of the calculation methodology for the 
BRIXX Sector Indexes, on which the Exchange is authorized to list 
options. The proposed rule change has no impact on the dissemination of 
index values for the BRIXX Indexes. Further, the Exchange has not yet 
listed options for trading on the BRIXX Indexes at this time.
Inter-Market Competition
    The Exchange does not believe the propose change will impose any 
burden on inter-market competition because the proposed rule change 
will continue to facilitate the listing and trading of novel options 
products that will enhance competition for commercial real estate 
securities among market participants, to the benefit of investors and 
the marketplace. This proposal furthers the Exchange's goal of listing 
options on the BRIXX Indexes, which will enhance competition by 
providing investors with an additional investment vehicle, in a fully-
electronic trading environment, through which investors can gain and 
hedge exposure to various sectors of the commercial real estate market. 
Further, these products could offer a competitive alternative to other 
existing investment products that seek to allow investors to gain broad 
market exposure via equity REITs in the same individual sectors as the 
BRIXX Indexes.

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 \16\ and Rule 19b-4(f)(6) \17\ 
thereunder.
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 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.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MIAX-2021-52 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-2021-52. 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

[[Page 60926]]

submissions should refer to File Number SR-MIAX-2021-52 and should be 
submitted on or before November 26, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-24012 Filed 11-3-21; 8:45 am]
BILLING CODE 8011-01-P
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