Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 519C, Mass Cancellation of Trading Interest, 79383-79385 [2022-28084]
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Federal Register / Vol. 87, No. 247 / Tuesday, December 27, 2022 / Notices
to compete for order flow and deepen its
liquidity pool, improving the overall
quality of its market. Lastly, the
Exchange believes its proposal will not
impose any burden on inter-market
competition because it would allow the
Exchange to operate on a dedicated
network in the same manner as other
affiliated exchanges who operate on
dedicated networks separate from their
affiliates.28
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 29 and Rule 19b–4(f)(6) 30
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:
TKELLEY on DSK125TN23PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
28 See
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
PEARL–2022–60 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–2022–60. 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–2022–60 and
should be submitted on or before
January 17, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–28087 Filed 12–23–22; 8:45 am]
supra notes 5 and 6.
U.S.C. 78s(b)(3)(A).
30 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.
BILLING CODE P
29 15
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79383
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96548; File No. SR–
EMERALD–2022–35]
Self-Regulatory Organizations; MIAX
Emerald, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Exchange
Rule 519C, Mass Cancellation of
Trading Interest
December 20, 2022.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b-4 thereunder,2
notice is hereby given that on December
8, 2022, MIAX Emerald, LLC (‘‘MIAX
Emerald’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the 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 proposes to amend
Exchange Rule 519C, Mass Cancellation
of Trading Interest.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/emerald, at MIAX Emerald’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
Interpretations and Policies .01 of
Exchange Rule 519C, Mass Cancellation
1 15
31 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00111
Fmt 4703
Sfmt 4703
2 17
E:\FR\FM\27DEN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
27DEN1
79384
Federal Register / Vol. 87, No. 247 / Tuesday, December 27, 2022 / Notices
of Trading Interest, to provide
Members 3 the option of having the
Exchange cancel all orders, including
GTC Orders,4 if the Exchange detects a
loss of communication on a FIX Order
Interface (‘‘FOI’’) Session.
Background
TKELLEY on DSK125TN23PROD with NOTICES
Electronic Exchange Members
(‘‘EEMs’’) 5 connect to the Exchange via
the Financial Information eXchange
(‘‘FIX’’) Protocol.6 An EEM connects to
their assigned FIX port using the MIAX
FIX Order Interface (‘‘FOI’’) which is a
flexible interface that uses the FIX
protocol for both application and
session level messages. The Exchange
relies on heartbeat 7 messages to
determine the status of the connection
to ensure bi-directional communication
remains intact. Upon missing a single
heartbeat, FOI will send a Test Request
message 8 to the Member to check the
status of the connection. Upon missing
a certain number of heartbeats,9 FOI
will send a logout message and
terminate the connection. The Exchange
currently offers Members certain order
handling risk protection options in this
scenario.
Specifically, when a Loss of
Communication is detected on a FOI
3 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
4 A Good ‘til Cancelled or ‘‘GTC’’ Order is an
order to buy or sell which remains in effect until
it is either executed, cancelled or the underlying
option expires. See Exchange Rule 516(l).
5 The term ‘‘Electronic Exchange Member’’ or
‘‘EEM’’ means the holder of a Trading Permit who
is not a Market Maker. Electronic Exchange
Members are deemed ‘‘members’’ under the
Exchange Act. See Exchange Rule 100.
6 The Financial Information eXchange (FIX) is a
vendor-neutral electronic communications protocol
for the international real-time exchange of securities
transaction information. Scott, Gordon, Financial
Information eXchange (FIX), Investopedia (June 20,
2022), https://www.investopedia.com/terms/f/
financial-information-exchange.asp.
7 A ‘‘Heartbeat’’ message is a communication
which acts as a virtual pulse between the Exchange
System and the Member’s system. The heartbeat
message sent by the Member and received by the
Exchange allows the Exchange to continually
monitor its connection with the Member. See
Interpretations and Policies .02(i) of Exchange Rule
519C.
8 The test request message is a FIX Protocol
message that forces a heartbeat from the opposing
application. The test request message checks
sequence numbers or verifies communication line
status. The opposite application responds to the
Test Request with a Heartbeat containing the Test
Request ID. Financial Information Exchange
Protocol (FIX), Version 4.2 with errata. May 1, 2001.
9 The Exchange notes that the current System
setting is two (2) heartbeats, and that any change
to this setting will be determined by the Exchange
and communicated to Members via Regulatory
Circular.
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22:43 Dec 23, 2022
Jkt 259001
connection the System 10 will logoff the
Member’s session and (i) cancel all
eligible orders for the FIX Session if
instructed by the Member upon login, or
(ii) cancel all eligible orders identified
by the Member. Following a
disconnection, a reconnection will not
be permitted for a certain period of time
(‘‘yy’’ seconds). The Exchange shall
determine the appropriate period of
(‘‘yy’’ seconds) and shall notify
Members of the value of ‘‘yy’’ seconds
via Regulatory Circular. In no event
shall ‘‘yy’’ be less than one (1) second
or greater than ten (10) seconds.11
At the time the Exchange adopted this
functionality the Exchange created an
exception for Good ‘Til Cancel Orders in
Interpretations and Policies .01, which
stated, Good ‘Til Cancelled (‘‘GTC’’)
orders, as defined in Rule 516 and
PRIME Orders, as defined in Rule 515A,
are not eligible for automatic
cancellation under paragraph (c) of Rule
519C.12
Proposal
The Exchange now proposes to amend
Interpretations and Policies .01 to allow
GTC orders to also be eligible for
cancellation when the Exchange detects
a Loss of Communication.
As proposed, if the Exchange
determines that there is a Loss of
Communication, the Exchange will
cancel the orders as described above,
additionally, if elected, the Exchange
proposes to cancel all GTC orders
submitted through that FIX Session. As
proposed, Members would need to
contact the Exchange’s Help Desk,13 in
a form and manner to be determined by
the Exchange and communicated via
Regulatory Circular, to have this
optional order protection (cancellation
of GTC orders) configured.
2. Statutory Basis
The Exchange believes that its
proposed rule change is consistent with
Section 6(b) of the Act 14 in general, and
furthers the objectives of section 6(b)(5)
of the Act 15 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
10 The term ‘‘System’’ means the automated
trading system used by the Exchange for the trading
of securities. See Exchange Rule 100.
11 See Exchange Rule 519C(c)(2).
12 See Interpretations and Policies .01 of
Exchange Rule 519C.
13 The term ‘‘Help Desk’’ means the Exchange’s
control room consisting of Exchange staff
authorized to make certain trading determinations
on behalf of the Exchange. The Help Desk shall
report to and be supervised by a senior executive
officer of the Exchange. See Exchange Rule 100.
14 15 U.S.C. 78f(b).
15 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00112
Fmt 4703
Sfmt 4703
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanisms of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The disconnect feature of FIX
connections is mandatory, however
Members have the option to enable the
cancellation of all orders for an entire
session or select orders for cancellation
on an order-by-order basis, which
would result in the cancellation of
orders submitted over a FIX Session
when such session disconnects. The
Exchange believes it is appropriate to
offer an additional option for Members
to have the Exchange cancel GTC orders
from the order book when there is a
communication issue between the
Member and the Exchange, as a
communication issue may or may not be
quickly resolved.
Offering to cancel all orders
(including GTC orders) allows the
Member to customize Exchange risk
protection functionality to align to a
Member’s business needs. Offering this
type of order cancellation functionality
to Members is consistent with the Act
because it enables Members to have
greater control over the execution of
their orders in the event there is a
communication issue with the
Exchange. The proposed order
cancellation functionality is designed to
mitigate the risk of a missed execution
associated with a loss of communication
with the Exchange. The proposed rule
change is not unfairly discriminatory
among market participants, as it is
available equally to all market
participants utilizing a FOI connection
to the Exchange.
The Exchange believes that the
proposed rule change will assist with
the maintenance of a fair and orderly
market by providing Members with
greater control over their resting orders.
The Exchange’s proposal is consistent
with the Act because it will mitigate the
risk of potential erroneous or
unintended executions associated with
a loss of communication which protects
investors and the public interest.
Additionally, the proposed rule adds
another level of risk protection for
Members and protects investors and the
public interest by increasing the risk
protection options available to Members
of the Exchange.
E:\FR\FM\27DEN1.SGM
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Federal Register / Vol. 87, No. 247 / Tuesday, December 27, 2022 / Notices
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 Exchange does not believe that
the proposed rule change to provide an
additional risk protection imposes any
burden on intra-market competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange believes that adding an
optional risk protection benefits all
Members on the Exchange that use a
FOI connection as any Member with a
FOI connection can elect to use the risk
protection described in the proposed
rule.
The Exchange does not believe the
proposed rule change will impose any
burden on inter-market competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
For all the reasons stated, the Exchange
does not believe that the proposed rule
change will impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act.
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.
TKELLEY on DSK125TN23PROD with NOTICES
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
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
16 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b4(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
VerDate Sep<11>2014
22:43 Dec 23, 2022
Jkt 259001
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–
EMERALD–2022–35.
• 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–EMERALD–2022–35. 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–EMERALD–2022–35, and
Frm 00113
Fmt 4703
should be submitted on or before
January 17, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–28084 Filed 12–23–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96542; File No. SR–
NASDAQ–2022–076]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Equity 4, Rule 4754 Regarding Close
Eligible Interest
December 20, 2022.
Paper Comments
PO 00000
79385
Sfmt 4703
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 December
12, 2022, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
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 proposes to amend
Equity 4, Rule 4754. The text of the
proposed rule change is available on the
Exchange’s website at https://
listingcenter.nasdaq.com/rulebook/
nasdaq/rules, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 87, Number 247 (Tuesday, December 27, 2022)]
[Notices]
[Pages 79383-79385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28084]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96548; File No. SR-EMERALD-2022-35]
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 519C, Mass Cancellation of Trading Interest
December 20, 2022.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 8, 2022, MIAX Emerald, LLC (``MIAX Emerald'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Exchange Rule 519C, Mass
Cancellation of Trading Interest.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/emerald, at MIAX
Emerald'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 Interpretations and Policies .01 of
Exchange Rule 519C, Mass Cancellation
[[Page 79384]]
of Trading Interest, to provide Members \3\ the option of having the
Exchange cancel all orders, including GTC Orders,\4\ if the Exchange
detects a loss of communication on a FIX Order Interface (``FOI'')
Session.
---------------------------------------------------------------------------
\3\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
\4\ A Good `til Cancelled or ``GTC'' Order is an order to buy or
sell which remains in effect until it is either executed, cancelled
or the underlying option expires. See Exchange Rule 516(l).
---------------------------------------------------------------------------
Background
Electronic Exchange Members (``EEMs'') \5\ connect to the Exchange
via the Financial Information eXchange (``FIX'') Protocol.\6\ An EEM
connects to their assigned FIX port using the MIAX FIX Order Interface
(``FOI'') which is a flexible interface that uses the FIX protocol for
both application and session level messages. The Exchange relies on
heartbeat \7\ messages to determine the status of the connection to
ensure bi-directional communication remains intact. Upon missing a
single heartbeat, FOI will send a Test Request message \8\ to the
Member to check the status of the connection. Upon missing a certain
number of heartbeats,\9\ FOI will send a logout message and terminate
the connection. The Exchange currently offers Members certain order
handling risk protection options in this scenario.
---------------------------------------------------------------------------
\5\ The term ``Electronic Exchange Member'' or ``EEM'' means the
holder of a Trading Permit who is not a Market Maker. Electronic
Exchange Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
\6\ The Financial Information eXchange (FIX) is a vendor-neutral
electronic communications protocol for the international real-time
exchange of securities transaction information. Scott, Gordon,
Financial Information eXchange (FIX), Investopedia (June 20, 2022),
https://www.investopedia.com/terms/f/financial-information-exchange.asp.
\7\ A ``Heartbeat'' message is a communication which acts as a
virtual pulse between the Exchange System and the Member's system.
The heartbeat message sent by the Member and received by the
Exchange allows the Exchange to continually monitor its connection
with the Member. See Interpretations and Policies .02(i) of Exchange
Rule 519C.
\8\ The test request message is a FIX Protocol message that
forces a heartbeat from the opposing application. The test request
message checks sequence numbers or verifies communication line
status. The opposite application responds to the Test Request with a
Heartbeat containing the Test Request ID. Financial Information
Exchange Protocol (FIX), Version 4.2 with errata. May 1, 2001.
\9\ The Exchange notes that the current System setting is two
(2) heartbeats, and that any change to this setting will be
determined by the Exchange and communicated to Members via
Regulatory Circular.
---------------------------------------------------------------------------
Specifically, when a Loss of Communication is detected on a FOI
connection the System \10\ will logoff the Member's session and (i)
cancel all eligible orders for the FIX Session if instructed by the
Member upon login, or (ii) cancel all eligible orders identified by the
Member. Following a disconnection, a reconnection will not be permitted
for a certain period of time (``yy'' seconds). The Exchange shall
determine the appropriate period of (``yy'' seconds) and shall notify
Members of the value of ``yy'' seconds via Regulatory Circular. In no
event shall ``yy'' be less than one (1) second or greater than ten (10)
seconds.\11\
---------------------------------------------------------------------------
\10\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
\11\ See Exchange Rule 519C(c)(2).
---------------------------------------------------------------------------
At the time the Exchange adopted this functionality the Exchange
created an exception for Good `Til Cancel Orders in Interpretations and
Policies .01, which stated, Good `Til Cancelled (``GTC'') orders, as
defined in Rule 516 and PRIME Orders, as defined in Rule 515A, are not
eligible for automatic cancellation under paragraph (c) of Rule
519C.\12\
---------------------------------------------------------------------------
\12\ See Interpretations and Policies .01 of Exchange Rule 519C.
---------------------------------------------------------------------------
Proposal
The Exchange now proposes to amend Interpretations and Policies .01
to allow GTC orders to also be eligible for cancellation when the
Exchange detects a Loss of Communication.
As proposed, if the Exchange determines that there is a Loss of
Communication, the Exchange will cancel the orders as described above,
additionally, if elected, the Exchange proposes to cancel all GTC
orders submitted through that FIX Session. As proposed, Members would
need to contact the Exchange's Help Desk,\13\ in a form and manner to
be determined by the Exchange and communicated via Regulatory Circular,
to have this optional order protection (cancellation of GTC orders)
configured.
---------------------------------------------------------------------------
\13\ The term ``Help Desk'' means the Exchange's control room
consisting of Exchange staff authorized to make certain trading
determinations on behalf of the Exchange. The Help Desk shall report
to and be supervised by a senior executive officer of the Exchange.
See Exchange Rule 100.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act \14\ in general, and furthers the
objectives of section 6(b)(5) of the Act \15\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanisms of a free and open market and a national market
system and, in general, to protect investors and the public interest.
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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(5).
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The disconnect feature of FIX connections is mandatory, however
Members have the option to enable the cancellation of all orders for an
entire session or select orders for cancellation on an order-by-order
basis, which would result in the cancellation of orders submitted over
a FIX Session when such session disconnects. The Exchange believes it
is appropriate to offer an additional option for Members to have the
Exchange cancel GTC orders from the order book when there is a
communication issue between the Member and the Exchange, as a
communication issue may or may not be quickly resolved.
Offering to cancel all orders (including GTC orders) allows the
Member to customize Exchange risk protection functionality to align to
a Member's business needs. Offering this type of order cancellation
functionality to Members is consistent with the Act because it enables
Members to have greater control over the execution of their orders in
the event there is a communication issue with the Exchange. The
proposed order cancellation functionality is designed to mitigate the
risk of a missed execution associated with a loss of communication with
the Exchange. The proposed rule change is not unfairly discriminatory
among market participants, as it is available equally to all market
participants utilizing a FOI connection to the Exchange.
The Exchange believes that the proposed rule change will assist
with the maintenance of a fair and orderly market by providing Members
with greater control over their resting orders. The Exchange's proposal
is consistent with the Act because it will mitigate the risk of
potential erroneous or unintended executions associated with a loss of
communication which protects investors and the public interest.
Additionally, the proposed rule adds another level of risk protection
for Members and protects investors and the public interest by
increasing the risk protection options available to Members of the
Exchange.
[[Page 79385]]
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 Exchange does not believe that the proposed rule change to
provide an additional risk protection imposes any burden on intra-
market competition that is not necessary or appropriate in furtherance
of the purposes of the Act. The Exchange believes that adding an
optional risk protection benefits all Members on the Exchange that use
a FOI connection as any Member with a FOI connection can elect to use
the risk protection described in the proposed rule.
The Exchange does not believe the proposed rule change will impose
any burden on inter-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act. For all the
reasons stated, the Exchange does not believe that the proposed rule
change will impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.
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.
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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-EMERALD-2022-35.
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-EMERALD-2022-35. 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-EMERALD-2022-35, and should be submitted
on or before January 17, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-28084 Filed 12-23-22; 8:45 am]
BILLING CODE 8011-01-P
