[Federal Register Volume 78, Number 238 (Wednesday, December 11, 2013)]
[Notices]
[Pages 75439-75441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-29490]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70992; File No. SR-MIAX-2013-55]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change to Amend Exchange Rule 402

December 5, 2013.
    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 November 26, 2013, Miami International Securities Exchange LLC 
(``MIAX'' 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.
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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 402 to 
enable the listing and trading on the Exchange of options on the ETFS 
Silver Trust, the ETFS Gold Trust, the ETFS Palladium Trust, the ETFS 
Platinum Trust, and the Sprott Physical Gold Trust.
    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 proposes to amend Rule 402 (Criteria for Underlying 
Securities) to enable the listing and trading on the Exchange of 
options on the ETFS Silver Trust, the ETFS Gold Trust, the ETFS 
Palladium Trust, the ETFS Platinum Trust, and the Sprott Physical Gold 
Trust.
    Under current Rule 402, only Exchange-Traded Fund Shares (``ETFs'') 
that (1) represent interests in registered investment companies (or 
series thereof) organized as open-end management investment companies, 
unit investment trusts or similar entities that hold portfolios of 
securities and/or financial instruments (``Funds''), including, but not 
limited to, stock index futures contracts, options on futures, options 
on securities and indices, equity caps, collars and floors, swap 
agreements, forward contracts, repurchase agreements and reverse 
repurchase agreements (the ``Financial Instruments''), and money market 
instruments, including, but not limited to, U.S. government securities 
and repurchase agreements (the ``Money Market Instruments'') comprising 
or otherwise based on or representing investments in broad-based 
indexes or portfolios of securities and/or Financial Instruments and 
Money Market Instruments (or that hold securities in one or more other 
registered investment companies that themselves hold such portfolios of 
securities and/or Financial Instruments and Money Market Instruments), 
or (2) represent interests in a trust or similar entity that holds a 
specified non-U.S. currency or currencies deposited with the trust 
which when aggregated in some specified minimum number may be 
surrendered to the trust or similar entity by the beneficial owner to 
receive the specified non-U.S. currency or currencies and pays the 
beneficial owner interest and other distributions on the deposited non-
U.S. currency or currencies, if any, declared and paid by the trust 
(``Currency Trust Shares''), or (3) represent commodity pool interests 
principally engaged, directly or indirectly, in holding and/or managing 
portfolios or baskets of securities, commodity futures contracts, 
options on commodity futures contracts, swaps, forward contracts and/or 
options on physical commodities and/or non-U.S. currency (``Commodity 
Pool ETFs''), or (4) are issued by the SPDR[supreg] Gold Trust or the 
iShares COMEX Gold Trust or the iShares Silver Trust, or (5) represent 
an interest in a registered investment company (``Investment Company'') 
organized as an open-end management company or similar entity, that 
invests in a portfolio of securities selected by the Investment 
Company's investment adviser consistent with the Investment Company's 
investment objectives and policies, which is issued in a specified 
aggregate minimum number in return for a deposit of a specified 
portfolio of securities and/or a cash amount with a value equal to the 
next determined net asset value (``NAV''), and when aggregated in the 
same specified minimum number, may be redeemed at a holder's request, 
which holder will be paid a specified portfolio of securities and/or 
cash with a value equal to the next determined NAV (``Managed Fund 
Share'') are eligible as underlying

[[Page 75440]]

securities for options traded on the Exchange.\3\ This rule change 
proposes to expand the types of ETFs that may be approved for options 
trading on the Exchange to include ETFS Silver Trust, the ETFS Gold 
Trust, the ETFS Palladium Trust, the ETFS Platinum Trust, and the 
Sprott Physical Gold Trust.
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    \3\ See Exchange Rule 402(i).
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    Apart from allowing ETFS Silver Trust, the ETFS Gold Trust, the 
ETFS Palladium Trust, the ETFS Platinum Trust, and the Sprott Physical 
Gold Trust to be an underlying for options traded on the Exchange as 
described above, the listing standards for ETFs will remain unchanged 
from those that apply under current Exchange Rules. ETFs on which 
options may be listed and traded must still be listed and traded on a 
national securities exchange and must satisfy the other listing 
standards set forth in Rule 402(i).
    Specifically, in addition to satisfying the aforementioned listing 
requirements, ETFs must meet [sic] either (1) meet the criteria and 
guidelines set forth in paragraphs 402(a) and (b) or (2) they must be 
available for creation or redemption each business day from or through 
the issuing trust, investment company, commodity pool or other entity 
in cash or in kind at a price related to net asset value, and the 
issuer is obligated to issue ETF Shares in a specified aggregate number 
even if some or all of the investment assets and/or cash required to be 
deposited have not been received by the issuer, subject to the 
condition that the person obligated to deposit the investment assets 
has undertaken to deliver them as soon as possible and such undertaking 
is secured by the delivery and maintenance of collateral consisting of 
cash or cash equivalents satisfactory to the issuer of the ETF Shares, 
all as described in the ETF Shares' prospectus.
    The Exchange states that the current continued listing standards 
for options on ETFs will apply to options on ETFS Silver Trust, the 
ETFS Gold Trust, the ETFS Palladium Trust, the ETFS Platinum Trust, and 
the Sprott Physical Gold Trust. Specifically, under 403(g), options on 
ETFs may be subject to suspension of opening transactions as follows: 
(1) Following the initial twelve-month period beginning upon the 
commencement of trading of the ETF Fund [sic] Shares, there are fewer 
than 50 record and/or beneficial holders of the ETF Fund [sic] Shares 
for 30 or more consecutive trading days; (2) the value of the index or 
portfolio of securities, non-U.S. currency, or portfolio of commodities 
including commodity futures contracts, options on commodity futures 
contracts, swaps, forward contracts and/or options on physical 
commodities and/or Financial Instruments and Money Market Instruments 
on which ETF Fund [sic] Shares are based is no longer calculated or 
available; or (3) such other event occurs or condition exists that in 
the opinion of the Exchange makes further dealing on the Exchange 
inadvisable.
    In addition, ETFS Silver Trust, the ETFS Gold Trust, the ETFS 
Palladium Trust, the ETFS Platinum Trust, or the Sprott Physical Gold 
Trust shall not be deemed to meet the requirements for continued 
approval, and the Exchange shall not open for trading any additional 
series of option contracts of the class covering the ETFS Silver Trust, 
the ETFS Gold Trust, the ETFS Palladium Trust, the ETFS Platinum Trust, 
or the Sprott Physical Gold Trust, if the ETFS Silver Trust, the ETFS 
Gold Trust, the ETFS Palladium Trust, the ETFS Platinum Trust, or the 
Sprott Physical Gold Trust cease to be an ``NMS stock'' as provided for 
in Rules [sic] 403(b)(4) or the ETFS Silver Trust, the ETFS Gold Trust, 
the ETFS Palladium Trust, the ETFS Platinum Trust, or the Sprott 
Physical Gold Trust is halted or suspended from trading on its primary 
market.
    The addition of the ETFS Silver Trust, the ETFS Gold Trust, the 
ETFS Palladium Trust, the ETFS Platinum Trust, and the Sprott Physical 
Gold Trust to Rule 402(i) will not have any effect on the rules 
pertaining to position and exercise limits \4\ or margin.\5\ The 
Exchange represents that its surveillance procedures applicable to 
trading in options on the ETFS Silver Trust, the ETFS Gold Trust, the 
ETFS Palladium Trust, the ETFS Platinum Trust, and the Sprott Physical 
Gold Trust will be similar to those applicable to all other options on 
other ETFs currently traded on the Exchange. Also, the Exchange may 
obtain information from the New York Mercantile Exchange, Inc. 
(``NYMEX'') (a member of the Intermarket Surveillance Group) related to 
any financial instrument that is based, in whole or in part, upon an 
interest in or performance of silver, gold, palladium, and platinum.
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    \4\ See Exchange Rules 307, Position Limits, and 309, Exercise 
Limits.
    \5\ See Exchange Rule Chapter XV.
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2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) \6\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) \7\ of the Act 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. In 
particular, the Exchange believes that amending its rules to 
accommodate the listing and trading of options on the ETFS Silver 
Trust, the ETFS Gold Trust, the ETFS Palladium Trust, the ETFS Platinum 
Trust, and the Sprott Physical Gold Trust will benefit investors by 
providing them with valuable risk management tools.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes this proposed rule change will benefit 
investors by providing additional methods to trade options on ETFS 
Silver Trust, the ETFS Gold Trust, the ETFS Palladium Trust, the ETFS 
Platinum Trust, and the Sprott Physical Gold Trust Shares, and by 
providing them with valuable risk management tools. Specifically, the 
Exchange believes that market participants on MIAX would benefit from 
the introduction and availability of options on ETFS Silver Trust, the 
ETFS Gold Trust, the ETFS Palladium Trust, the ETFS Platinum Trust, and 
the Sprott Physical Gold Trust in a manner that is similar to other 
exchanges and will provide investors with yet another venue on which to 
trade these products. The Exchange notes that the rule change is being 
proposed as a competitive response to other competing options exchanges 
\8\ and believes this proposed rule change is necessary to permit fair 
competition among the options exchanges. For all the reasons stated 
above, 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, and believes

[[Page 75441]]

the proposed change will enhance competition.
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    \8\ See Securities Exchange Act Release Nos. 61483 (February 3, 
2010), 75 FR 6753 (February 10, 2010) (SR-CBOE-2010-007, SR-ISE-
2009-106, SR-NYSEAmex-2009-86, and SR-NYSEArca-2009-110); 61892 
(April 13, 2010), 75 FR 20649 (April 20, 2013 [sic]) (SR-CBOE-2010-
015); 62463 (July 7, 2010), 75 FR 40005 (July 13, 2010) (SR-CBOE-
2010-043); 62464 (July 7, 2010), 75 FR 40007 (July 13, 2010) (SR-BX-
2010-045); 65099 (August 11, 2011), 76 FR 51114 (August 17, 2011) 
(SR-NASDAQ-2011-109); 65098 (August 11, 2011), 76 FR 51116 (August 
17, 2011) (SR-PHLX-2011-102).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, 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 \9\ and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its 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 Commission has waived the five-day prefiling 
requirement in this case.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange requests that the Commission waive 
the 30-day operative delay. The Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest.\11\ The Commission notes that the proposal is 
substantively identical to proposals that were approved by the 
Commission, and does not raise any new regulatory issues.\12\ For these 
reasons, the Commission designates the proposed rule change as 
operative upon filing.
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    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \12\ See supra note 8.
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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.

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-2013-55 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-2013-55. 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 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; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-MIAX-2013-55 and should be 
submitted on or before January 2, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29490 Filed 12-10-13; 8:45 am]
BILLING CODE 8011-01-P