[Federal Register Volume 84, Number 44 (Wednesday, March 6, 2019)]
[Notices]
[Pages 8129-8131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03991]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85221; File No. SR-MIAX-2019-06]


Self-Regulatory Organizations; Miami International Securities 
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Exchange Rule 503, Openings on the 
Exchange, and Exchange Rule 515, Execution of Orders and Quotes

February 28, 2019.
    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 February 22, 2019, Miami International 
Securities Exchange, LLC (``MIAX Options'' or the ``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 Exchange Rule 503, 
Openings on

[[Page 8130]]

the Exchange, and Exchange Rule 515, Execution of Orders and Quotes, to 
delete certain rule text regarding functionality that the Exchange 
proposes to remove from the System \3\ and to make certain minor 
clarifying changes related thereto.
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    \3\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
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    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings/ at MIAX Options' 
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 503, Openings on the 
Exchange, and Exchange Rule 515, Execution of Orders and Quotes, to 
delete certain rule text regarding functionality that the Exchange 
proposes to remove from the System and to make certain minor clarifying 
changes related thereto.
    First, the Exchange proposes to delete Exchange Rule 515, 
Interpretations and Policies .01. Presently, this rule states that 
``[a] Member \4\ may submit written instructions to the Exchange 
designating orders the Member submits as eligible for automatic 
resubmission when the order or any remaining part of the order has been 
automatically cancelled by the System. The resubmitted order will be 
automatically submitted as a new order. This automatic resubmission 
functionality of the System will not apply to Immediate or Cancel, Fill 
or Kill or Intermarket Sweep Orders.'' The Exchange notes that this 
functionality was completely voluntary for Members to use and was 
intended to provide Members with an automated way to resubmit certain 
cancelled orders. The Exchange believes this functionality is no longer 
necessary as very few Members ever used such functionality, and no 
Members are currently utilizing this functionality. Therefore, the 
Exchange proposes to delete this rule text as it no longer plans to 
offer this functionality to its Members.
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    \4\ The term ``Member'' means an individual or organization 
approved to exercise the trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
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    Second, the Exchange proposes to amend Exchange Rule 515(e) related 
to handling of Immediate-or-Cancel (``IOC'') Orders. Specifically, the 
Exchange proposes to delete the last sentence of Rule 515(e) which 
currently states that ``[c]ontracts remaining from an IOC order will 
not be eligible for automatic resubmissions as a new order for Members 
who have instructed the Exchange in writing to re-enter remaining 
contracts.'' The Exchange notes that, since it is proposing to delete 
the order resubmission functionality, this corresponding rule text is 
no longer necessary because it was intended as a carve-out for IOC 
orders from the functionality the Exchange now proposes to delete from 
Interpretations and Policies .01.
    Third, the Exchange proposes to amend Exchange Rule 515(f) related 
to handling of Fill-or-Kill (``FOK'') Orders. Specifically, the 
Exchange proposes to delete the last sentence of Rule 515(f) which 
currently states that ``[a]n FOK order will not be eligible for 
automatic resubmissions as a new order for Members who have instructed 
the Exchange in writing to re-enter remaining contracts.'' Similarly, 
this corresponding rule text is no longer necessary because it was 
intended as a carve-out for FOK orders from the functionality the 
Exchange now proposes to delete from Interpretations and Policies .01.
    Fourth, the Exchange proposes to amend Exchange Rule 515(g) related 
to handling of Intermarket Sweep Orders and Intermarket Sweep eQuote 
(``ISOs''). Specifically, the Exchange proposes to delete part of the 
last sentence of Rule 515(g) which currently states that ``. . .and are 
not eligible for automatic resubmissions as a new order for Members who 
have instructed the Exchange in writing to re-enter remaining 
contracts.'' Similarly, this corresponding rule text is no longer 
necessary because it was intended as a carve-out for ISOs from the 
functionality the Exchange now proposes to delete from Interpretations 
and Policies .01.
    Finally, the Exchange proposes to amend Exchange Rule 
503(f)(2)(vii)(B)(5) to delete a sentence related to the automatic 
resubmission of new orders as part of the opening process. 
Specifically, the Exchange proposes to delete text which reads ``(i) 
the Member that submitted the original order has instructed the 
Exchange in writing to re-enter the remaining size, in which case the 
remaining size will be automatically submitted as a new order, or (ii). 
. .'' The Exchange notes that this functionality was completely 
voluntary for Members to use and was intended to provide Members with 
an automated way to resubmit certain cancelled orders. The Exchange 
believes this functionality is no longer necessary as very few Members 
ever used such functionality, and no Members are currently utilizing 
this functionality. Therefore, the Exchange proposes to delete this 
rule text as it no longer plans to offer this functionality to its 
Members.
    The Exchange notes that it will issue a Regulatory Circular in 
order to notify its Members of this proposed rule change removing 
System functionality, which would no longer allow Members to request 
that the Exchange automatically resubmit orders.
    The proposed changes are scheduled to become operative March 1, 
2019.
2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \5\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \6\ 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed changes promote just and 
equitable principles of trade and remove impediments to and perfect the 
mechanism of a free and open market and a national market system 
because the proposed rule change deletes rule text that relates to 
voluntary functionality that is no longer used by the Exchange's 
Members and updates corresponding rules to remove carve-outs which 
would no longer be applicable, to provide uniformity in the Exchange's 
rulebook with respect to System functionality. The Exchange notes that 
the proposed changes to

[[Page 8131]]

Exchange Rule 515, Execution of Orders and Quotes, and Exchange Rule 
503, Openings on the Exchange, would not have a substantive impact on 
Exchange Members since no Members currently make use of such 
functionality. As such, the proposed amendments would foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities and would remove impediments to and perfect 
the mechanism of a free and open market and a national exchange system, 
since it is proposing to remove rule text that relates to functionality 
that is not used by its Members. The Exchange further believes that the 
proposed rule change is consistent with the Act because Members will 
continue to have other means of submitting orders and the removal of 
the automatic order resubmission functionality does not impact the 
ability of Members to transact on the Exchange. The Exchange does not 
believe that removing this functionality will negatively impact Members 
because very few Members ever used such functionality, and no Members 
are currently utilizing this functionality.

B. Self-Regulatory Organization's Statement on Burden on Competition

    MIAX Options 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 proposed rule change will 
have no impact on competition as it is not designed to address any 
competitive issues but rather is designed to delete rule text that 
relates to voluntary functionality that is no longer used by the 
Exchange's Members and updates corresponding rules to remove carve-outs 
which would no longer be applicable as a result.
    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket competition as the Rules apply equally 
to all Exchange Members.

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 \7\ and Rule 19b-4(f)(6) \8\ 
thereunder.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days from the date of filing. However, Rule 
19b-4(f)(6)(iii) \9\ permits the Commission to 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. The Exchange seeks to make the voluntary 
functionality contained in Exchange Rule 515, Execution of Orders and 
Quotes, and Exchange Rule 503, Openings on the Exchange, no longer 
available on March 1, 2019. The Commission believes that the waiver of 
the 30-day operative delay is consistent with the protection of 
investors and the public interest and hereby waives the 30-day 
operative delay and designates the proposal operative on March 1, 
2019.\10\
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    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ 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).
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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-2019-06 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-MIAX-2019-06. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-MIAX-2019-06 and should be submitted on 
or before March 27, 2019.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-03991 Filed 3-5-19; 8:45 am]
 BILLING CODE 8011-01-P