[Federal Register Volume 80, Number 125 (Tuesday, June 30, 2015)]
[Notices]
[Pages 37349-37351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-15981]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75284; File No. SR-MIAX-2015-40]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Exchange Rule 510 To Extend the Penny 
Pilot Program

June 24, 2015.
    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 June 18, 2015, 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 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 Rule 510, 
Interpretations and Policies .01 to extend the pilot program for the 
quoting and trading of certain options in pennies (the ``Penny 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 is a participant in an industry-wide pilot program 
that provides for the quoting and trading of certain option classes in 
penny increments (the ``Penny Pilot Program'' or ``Program''). 
Specifically, the Penny Pilot Program allows the quoting and trading of 
certain option classes in minimum increments of $0.01 for all series in 
such option classes with a price of less than $3.00; and in minimum 
increments of $0.05 for all series in such option classes with a price 
of $3.00 or higher. Options overlying the PowerShares QQQ Trust 
(``QQQQ'')[supreg], SPDR S&P 500 Exchange Traded Funds (``SPY''), and 
iShares Russell 2000 Index Funds (``IWM''), however, are quoted and 
traded in minimum increments of $0.01 for all series regardless of the 
price. The Penny Pilot Program was initiated at the then existing 
option exchanges in January 2007 and currently includes more than 300 
of the most active option classes. The Penny Pilot Program is currently 
scheduled to expire on June 30, 2015. The purpose of the proposed rule 
change is to extend the Penny Pilot Program in its current format 
through June 30, 2016.
    In addition to the extension of the Penny Pilot Program through 
June 30, 2016, the Exchange will replace any Penny Pilot issues that 
have been delisted with the next most actively traded multiply listed 
option classes that are not yet included in the Penny Pilot Program. 
The replacement issues will be selected based on trading activity in 
the previous six months and will be added to the Penny Pilot Program on 
the second trading day following July 1, 2015 and January 1, 2016. 
Please note, the month immediately preceding a replacement

[[Page 37350]]

class's addition to the Pilot program (i.e., June) will not be used for 
purposes of the six-month analysis. Thus, a replacement added on the 
second trading day following July 1, 2015 will be identified based on 
trading activity from December 1, 2014 through May 31, 2015. Similarly, 
a replacement added on the second trading day following January 1, 2016 
will be identified based on trading activity from June 1, 2015 through 
November 30, 2015. Rule 510 has been updated to reflect the new date 
replacement issues will be added to the Penny Pilot Program.
2. Statutory Basis
    MIAX believes that its proposed rule change is consistent with 
Section 6(b) of the Act \3\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act \4\ 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 proposed 
rule change, which extends the Penny Pilot Program for six months, 
allows the Exchange to continue to participate in a program that has 
been viewed as beneficial to traders, investors and public customers 
and viewed as successful by the other options exchanges participating 
in it.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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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. Specifically, the Exchange 
believes that, by extending the expiration of the Pilot Program, the 
proposed rule change will allow for further analysis of the Penny Pilot 
Program and a determination of how the Program should be structured in 
the future. In doing so, the proposed rule change will also serve to 
promote regulatory clarity and consistency, thereby reducing burdens on 
the marketplace and facilitating investor protection. In addition, 
consistent with previous practices, the Exchange believes the other 
options exchanges will be filing similar extensions of the Penny Pilot 
Program.

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 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 from the date on which it was filed, or such shorter time as the 
Commission may designate, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \5\ and Rule 19b-4(f)(6) 
thereunder.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \7\ normally 
does not become operative prior to 30 days after the date of the 
filing.\8\ However, pursuant to Rule 19b-4(f)(6)(iii),\9\ 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 Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because doing so will allow the Penny Pilot Program to continue without 
interruption in a manner that is consistent with the Commission's prior 
approval of the extension and expansion of the Penny Pilot Program and 
will allow the Exchange and the Commission additional time to analyze 
the impact of the Penny Pilot Program.\10\ Accordingly, the Commission 
designates the proposed rule change as operative upon filing with the 
Commission.\11\
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    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ See Securities Exchange Act Release No. 61061 (November 24, 
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
    \11\ For purposes only of waiving the operative delay for this 
proposal, 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 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-2015-40 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-MIAX-2015-40. 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

[[Page 37351]]

submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
MIAX-2015-40 and should be submitted on or before July 21, 2015.
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    \12\ 17 CFR 200.30-3(a)(12).'

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-15981 Filed 6-29-15; 8:45 am]
 BILLING CODE 8011-01-P