[Federal Register Volume 77, Number 161 (Monday, August 20, 2012)]
[Notices]
[Pages 50184-50185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-20409]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67660; File No. 10-207]


Miami International Securities Exchange, LLC; Notice of Filing of 
Application for Registration as a National Securities Exchange Under 
Section 6 of the Securities Exchange Act of 1934

August 15, 2012.
    On April 26, 2012, Miami International Securities Exchange, LLC 
(``MIAX'') submitted to the Securities and Exchange Commission 
(``Commission'') a Form 1 application under the Securities Exchange Act 
of 1934 (``Exchange Act''), seeking registration as a national 
securities exchange under Section 6 of the Exchange Act. MIAX's Form 1 
application provides detailed information on how it proposes to satisfy 
the requirements of the Exchange Act.
    The Commission is publishing this notice to solicit comments on 
MIAX's Form 1 application. The Commission will take any comments it 
receives into consideration in making its determination about whether 
to grant MIAX's request to be registered as a national securities 
exchange. The Commission will grant the registration if it finds that 
the requirements of the Exchange Act and the rules and regulations 
thereunder with respect to MIAX are satisfied.\1\
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    \1\ 15 U.S.C. 78s(a).
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    MIAX would be wholly owned by its parent company, Miami 
International Holdings, Inc. (``Miami Holdings''). If approved, MIAX 
would commence operation of a fully automated electronic trading 
platform for the trading of standardized options with a continuous, 
automated matching function. MIAX would not have a physical trading 
floor. Liquidity would be derived from orders to buy and orders to sell 
submitted to MIAX electronically by its registered broker-dealer 
members, as well as from quotes submitted electronically by market 
makers.
    A description of the manner of operation of MIAX's proposed system 
can be found in Exhibit E to MIAX's Form 1 application. The proposed 
rulebook for the proposed MIAX exchange can be found in Exhibit B to 
MIAX's Form 1 application, and the governing documents for both MIAX 
and Miami Holdings can be found in Exhibit A. A listing of the officers 
and directors of MIAX can be found in Exhibit J to MIAX's Form 1 
application. MIAX's Form 1 application, including all of the Exhibits 
referenced above, is available online at www.sec.gov/rules/other.shtml 
as well as at the Commission's Public Reference Room.
    With respect to MIAX's proposed trading rules, some of the notable 
features proposed by MIAX are highlighted below. For example, in 
certain circumstances where MIAX could not fully execute an incoming 
Priority Customer order,\2\ it has proposed to use mechanisms and route 
timers that would expose the incoming order to the MIAX market for up 
to one second before routing the order to away markets or otherwise 
handling the order in accordance with its proposed trading rules.\3\ In 
addition, in limited circumstances, certain orders that are eligible 
for routing could be routed immediately, at least in part, without 
being subject to a one second route timer, if they meet a number of 
criteria.\4\
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    \2\ See proposed MIAX Rule 100 (defining ``Priority Customer'' 
as a person or entity that is not a broker or dealer in securities 
and does not place more than 390 orders in listed options per day on 
average during a calendar month for its own beneficial accounts).
    \3\ See proposed MIAX Rules 515 and 529. See also Exhibit E to 
MIAX's Form 1 submission, at 5-7.
    \4\ See proposed MIAX Rule 529. In short, an order would be 
eligible for immediate routing if (1) it is a customer order 
significantly greater in size than the size of the NBBO posted at 
away markets, and (2) it arrives at a time when MIAX has significant 
interest posted at one minimum price variation inferior to the NBBO 
at away markets.
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    MIAX has proposed three different classes of market makers that 
would operate on MIAX: Primary Lead Market Makers; Lead Market Makers; 
and Registered Market Makers. The different classes of market makers 
would be subject to varying levels of affirmative and negative market 
making obligations.
    Notably, MIAX would allow market makers to use a variety of quote 
types, some of which would have a specific time in force and would be 
analogous to orders (MIAX refers to such order types as ``eQuotes,'' 
and market makers would be able to enter these orders through their 
quotation infrastructure).\5\ Specifically, MIAX has proposed rules to 
allow market makers to submit any of the following ``quote'' types: 
Standard quote; Day eQuote; Immediate or Cancel eQuote; Fill or Kill 
eQuote; Intermarket Sweep eQuote; Auction or Cancel eQuote; and Opening 
Only eQuote.\6\ While market makers could only have one Standard quote 
active at any one time, they would be permitted to have multiple types 
of eQuotes active in a single series.\7\
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    \5\ See Exhibit E to MIAX's Form 1 submission, at 3.
    \6\ See proposed MIAX Rule 517.
    \7\ If its application ultimately is approved by the Commission, 
MIAX does not expect to make Day eQuotes available for use upon 
first commencing operations. See Exhibit E to MIAX's Form 1 
submission.
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    MIAX's proposed rules also provide for the categorization of 
certain market maker quotes as ``priority'' quotes and ``non-priority'' 
quotes.\8\ Use of priority quotes, which need to meet certain bid/ask 
differential requirements, would entitle market makers to precedence 
over all other professional interest (i.e., non-Priority Customer 
orders and market maker orders and non-priority quotes) on MIAX at the 
same price.\9\
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    \8\ See proposed MIAX Rule 517.
    \9\ See id.
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    Interested persons are invited to submit written data, views, and 
arguments concerning MIAX's Form 1, including whether the application 
is consistent with the Exchange Act. Comments may be submitted by any 
of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number 10-207 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number 10-207. 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 Web site (http://www.sec.gov/rules/other.shtml). 
Copies of the

[[Page 50185]]

submission, all subsequent amendments, all written statements with 
respect to MIAX's Form 1 filed with the Commission, and all written 
communications relating to the application 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 
Web site 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 a.m. and 3 p.m. All comments received will be 
posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make publicly available. All submissions 
should refer to File Number 10-207 and should be submitted on or before 
October 4, 2012.
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    \10\ 17 CFR 200.30-3(a)(71)(i).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012-20409 Filed 8-17-12; 8:45 am]
BILLING CODE 8011-01-P