[Federal Register Volume 78, Number 239 (Thursday, December 12, 2013)]
[Notices]
[Pages 75627-75629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-29618]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71014; File No. SR-MIAX-2013-53]


Self-Regulatory Organizations: Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change for the Extension of a Pilot Program for SPY 
Position and Exercise Limits

December 6, 2013.
    Pursuant to the provisions of 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'') 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.
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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 Rules 307 and 
309 to extend the pilot program that eliminates the position and 
exercise limits for physically-settled options on the SPDR S&P 500 ETF 
Trust (``SPY Pilot Program'').
    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 Exchange Rule 307, Commentary .01, 
Position Limits, and Exchange Rule 309, Commentary .01, Exercise 
limits, to extend the duration of the SPY Pilot Program through 
December 15, 2014. There are no substantive changes being proposed to 
the SPY Pilot Program.
    In proposing to extend the SPY Pilot Program, the Exchange affirms 
its consideration of several factors that support the proposal to 
establish the SPY Pilot Program, which include: (1) The liquidity of 
the option and the underlying security; (2) the market

[[Page 75628]]

capitalization of the underlying security and the securities that make 
up the S&P 500 Index; (3) options reporting requirements; and (4) 
financial requirements imposed by MIAX and the Commission.
    The Pilot Report for the SPY Pilot Program is not due until on or 
before January 5, 2014. However, because not all self-regulatory 
organizations (``SROs'') have adopted similar rules eliminating 
position and exercise limits for SPY options and because market 
participants that are members of such SROs are required to comply with 
the more restrictive SPY option position and exercise limits, no market 
participants have availed themselves of the SPY Pilot Program. As a 
result, there is not sufficient data to compile a meaningful Pilot 
Report at this time to file with this current extension request.
    The Exchange believes that it is appropriate to extend the SPY 
Pilot Program for an additional thirteen months to provide time for 
other SROs to adopt similar pilot programs that eliminate positions and 
exercise limits for SPY options. In that event (and in a year's time), 
the Exchange will be able to either extend the SPY Pilot Program, adopt 
the SPY Pilot Program on a permanent basis, or terminate the SPY Pilot 
Program.
    The Exchange represents that the Pilot Report would be submitted 
within thirty (30) days of the end of the first twelve months of the 
extended SPY Pilot Program time period and would cover the twelve 
months that just ended. The Pilot Report will compare the impact of the 
pilot program, if any, on the volumes of SPY options and the volatility 
in the price of the underlying SPY contract, particularly at 
expiration. The Pilot Report also will detail the size and different 
types of strategies employed with respect to positions established in 
SPY options; note whether any problems, in the underlying SPY ETF or 
otherwise, arose as a result of the no-limit approach; and include any 
other information that may be useful in evaluating the effectiveness of 
the pilot program. In preparing the Pilot Report, the Exchange will 
utilize various data elements such as volume and open interest. In 
addition the Exchange would make available to Commission staff data 
elements relating to the effectiveness of the SPY Pilot Program.
2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) \3\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) \4\ 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.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that extending the SPY Pilot 
Program promotes just and equitable principles of trade by permitting 
market participants, including market makers, institutional investors 
and retail investors, to establish greater positions when pursuing 
their investment goals and needs.

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 proposed rule change is 
not designed to address any aspect of competition, whether between the 
Exchange and its competitors, or among market participants. Instead, 
the proposed rule change is designed to allow the SPY Pilot Program to 
continue while other SROs adopt similar provisions.

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 \5\ and Rule 19b-4(f)(6) \6\ 
thereunder.
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MIAX-2013-53 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-2013-53. 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

[[Page 75629]]

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-2013-53 and should be submitted on 
or before January 2, 2014. For the Commission, by the Division of 
Trading and Markets, pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).

Elizabeth Murphy,
Secretary.
[FR Doc. 2013-29618 Filed 12-11-13; 8:45 am]
BILLING CODE 8011-01-P