[Federal Register Volume 78, Number 117 (Tuesday, June 18, 2013)]
[Notices]
[Pages 36625-36627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-14395]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69739; File No. SR-MIAX-2013-27]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Modify the Definition of ``Attributable Order''

June 12, 2013.
    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 June 4, 2013, Miami International Securities Exchange LLC 
(``Exchange'' or ``MIAX'') 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 self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend Exchange Rule 516 to 
modify the definition of ``Attributable Order.''
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.miaxoptions.com/filter/wotitle/rule_filing, at 
MIAX'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 received approval to be registered as a national 
securities exchange on December 3, 2012 \3\ and commenced trading 
operations on December 7, 2012. At that time, the Exchange included in 
Exchange Rule 516 definitions of order types that the Exchange intended 
to use after the commencement of trading on the Exchange. The preamble 
of Rule 516 notes that not all of the order types listed and described 
in Rule 516 will be initially available for use on the Exchange. In 
addition, Rule 516 provides that the Exchange will issue a Regulatory 
Circular listing which order types, among the order types defined in 
Rule 516, are available and that additional Regulatory Circulars will 
be issued as additional order types become available for use on the 
Exchange.
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    \3\ See Securities Exchange Act Release No. 68341 (December 3, 
2012) 77 FR 73089 (December 7, 2012) (File No. 10-207).
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    The Attributable Order type, defined in Rule 514(e), exists as one 
such order type that was not originally available at the commencement 
of trading on the

[[Page 36626]]

Exchange. The Exchange has now developed the necessary technology to 
support the Attributable Order type and would like to correspondingly 
modify its definition contained in Rule 516(e) to accommodate the 
functionality that will be implemented at this time. Pursuant to Rule 
516(e), an Attributable Order is a market or limit order which displays 
the user firm ID for purposes of trading on the Exchange. Use of 
Attributable Orders is voluntary.\4\
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    \4\ See MIAX Rule 516(e).
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    The ability to display information pertaining to a single order 
depends upon the Exchange's ability to broadcast that information to 
its members. This is currently accomplished through the Exchange's 
market data products, which for example includes the MIAX Top of Market 
(ToM).\5\ Thus, the functionality of an Attributable Order is linked to 
what is technologically feasible through the Exchange's market data 
products. The Exchange would like to modify the definition of 
Attributable Order contained in Rule 516(e) to acknowledge this 
relationship and to allow the functionality of the Attributable Order 
type to develop and be deployed correspondingly with technical advances 
related to its market data products. The Exchange proposes adding the 
following: ``Attributable Orders will be available for execution but 
may not display the user firm ID for all Exchange processes.'' This 
concept, which can be found in the definition of Attributable Orders of 
other options exchanges,\6\ will serve to put MIAX members on notice 
that the functionality of an Attributable Order to display the user 
firm ID, as it continually develops, may not be available during all 
Exchange processes. The Exchange proposes adding to Rule 516(e) that 
the Exchange will inform its members through a Regulatory Circular of 
the various Exchange processes in which the user firm ID of 
Attributable Order will be displayed.
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    \5\ See Securities Exchange Act Release No. 69007 (February 28, 
2013) 78 FR 14617 (March 6, 2013) (SR-MIAX-2013-05).
    \6\ See C2 Rule 6.10(f); ISE Rule 715(h); NYSE Arca Rule 
6.62(x); NYSE MKT Rule 900.3NY(v).
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    The Exchange believes that the proposed additional language in the 
Rule text will provide the Exchange the necessary flexibility to allow 
the Attributable Order type to display the user firm ID in additional 
Exchange processes while the Exchange continues to develop them. For 
instance, at its initial launch, Attributable Orders may be entered 
into and rest on the Exchange System and will only display the user 
firm ID through the Exchange market data products when the Attributable 
Order initiates a Liquidity Refresh Pause \7\ or a Route Timer.\8\ If 
the Exchange develops the Attributable Order to display the user firm 
ID in an additional Exchange process, for example during the Opening 
process, the Exchange will update its members through a Regulatory 
Circular as proposed in this filing.
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    \7\ See Rule 515(c)(1)(iii)(A).
    \8\ See Rule 529(b)(2).
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2. Statutory Basis
    MIAX believes that its proposed rule change is consistent with 
Section 6(b) of the Act \9\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act \10\ in particular, in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanisms of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that proposal will remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system because it would allow firms to better manage order flow by 
understanding the Attributable Order type functionality available on 
the Exchange. In addition, the proposed clarifying language will 
protect investors and the public interest by eliminating potential 
confusion that could be caused by the current description of order type 
functionality which may imply that the Attributable Order is available 
for all Exchange processes. The Exchange notes that the current 
available processes for the Attributable Order type do not encompass 
all the potential Exchange processes in which the Exchange believes 
would be useful to offer the Attributable Order, such as a price 
improvement mechanism or complex order mechanism which the Exchange may 
deploy in the future.

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 not necessary or appropriate in 
furtherance of the purposes of the Act. . The Exchange believes that 
the proposal will would provide member organizations with the 
information required for better use of the Attributable Order type. The 
Exchange notes that it operates in a highly competitive market in which 
market participants can readily direct order flow to competing venues 
who offer similar functionality. Many competing venues offer similar 
functionality to market participants. To this end, the Exchange is 
proposing adding more detail regarding one of its order types and a 
mechanism, specifically the Regulatory Circular, to provide continuing 
updates. The Exchange believes the proposed rule change is pro-
competitive because the added information regarding the Attributable 
Order type would enable member organizations to better compare the 
functionality of the Attributable Order type on the Exchange to that of 
other exchanges.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act\11\ and Rule 19b-4(f)(6) thereunder.\12\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the

[[Page 36627]]

Commission to waive the 30-day operative delay, noting that doing so 
will, among other things, protect investors by avoiding potential 
confusion regarding the availability of Attributable Orders. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. In 
particular, MIAX's Rule 516 (Order Types Defined) already provides that 
certain order types would not be available when MIAX initially 
commenced operations. Specifically, MIAX Rule 516 provides that ``. . . 
not all of the order types listed and described in this rule will be 
initially available for use on the Exchange. The Exchange will issue a 
Regulatory Circular listing which order types, among the order types 
set forth below, are available.'' Paragraph (e) of MIAX Rule 516 sets 
forth the applicable provision on Attributable Orders. In addition to 
defining that order type and noting that its use is voluntary, 
Paragraph (e) states that ``[t]he Exchange will issue a Regulatory 
Circular specifying the class(es) of securities for which the 
Attributable Order type shall be available.'' As such, MIAX currently 
has the ability to begin to offer the Attributable Order type on its 
market without submitting a rule change to the Commission. However, 
this proposed rule change would further clarify Paragraph (e) by 
stating that Attributable Orders will only display the user firm ID for 
those exchange processes that are specified by MIAX. MIAX further 
clarifies that it will issue a Regulatory Circular that specifies the 
applicable Exchange processes and classes of securities for which 
Attributable Order types will display the user firm ID. Waiving the 30-
day operative delay in this case will allow MIAX to avoid investor 
confusion by immediately clarifying the applicable rule text to reflect 
the current state of Attributable Orders on MIAX as it begins to offer 
this order type to market participants and will allow MIAX to 
accommodate this order type as it develops the technological capability 
to fully utilize it through MIAX's market data products. Accordingly, 
the Commission hereby grants the Exchange's request and designates the 
proposal operative upon filing.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MIAX-2013-27 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 SR-MIAX-2013-27. 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/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 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 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. 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 SR-MIAX-2013-27 and should be 
submitted on or before July 9, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority. \16\
Kevin M. O'Neill,
Deputy Secretary.
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    \16\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2013-14395 Filed 6-17-13; 8:45 am]
BILLING CODE 8011-01-P