[Federal Register Volume 84, Number 49 (Wednesday, March 13, 2019)]
[Notices]
[Pages 9190-9192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04556]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85266; File No. SR-EMERALD-2019-07]
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 203, Qualification and Registration of Members and
Associated Persons
March 7, 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, MIAX Emerald, LLC (``MIAX
Emerald'' 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 Exchange Rule 203,
Qualification and Registration of Members and Associated Persons, in
order to harmonize its rule to the rule of the Exchange's affiliate,
Miami International Securities Exchange, LLC (``MIAX Options'').
The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/emerald at MIAX
Emerald'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
MIAX Emerald proposes to amend MIAX Emerald Rule 203, Qualification
and Registration of Members and Associated Persons, in order to
harmonize its rule to the rule of the Exchange's affiliate, MIAX
Options.
Background
MIAX Emerald plans to commence operations as a national securities
exchange registered under Section 6 of the Act \3\ on March 1, 2019. As
described more fully in MIAX Emerald's Form 1 application,\4\ the
Exchange is an affiliate of MIAX Options and MIAX PEARL, LLC (``MIAX
PEARL''). MIAX Emerald Rules, in their current form, were filed as
Exhibit B to its Form 1 on August 16, 2018, and at that time, the above
mentioned MIAX Emerald Rule 203 was substantially similar to the
corresponding rule of MIAX Options. In the time between when the
Exchange filed its Form 1 and the time the Exchange received its
approval order,\5\ MIAX Options made changes to its rules. In order to
ensure consistent operation of both MIAX Emerald and MIAX Options
through application of consistent rules, the Exchange proposes to amend
MIAX Emerald Rule 203, as described below.
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\3\ 15 U.S.C. 78f.
\4\ See Securities Exchange Act Release No. 84891(December 20,
2018), 83 FR 67421 (December 28, 2018) (File No. 10-233) (order
approving application of MIAX EMERALD, LLC for registration as a
national securities exchange.)
\5\ Id.
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Proposal
The Exchange proposes to amend MIAX Emerald Rule 203, Qualification
and Registration of Members and Associated Persons, to harmonize its
rule with recent rule changes adopted by MIAX Options.\6\
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\6\ See Securities Exchange Act Release No. 84361 (October 4,
2018), 83 FR 51529 (October 11, 2018) (SR-MIAX-2018-26); see also
Securities Exchange Act Release No. 81098 (July 7, 2017), 82 FR
32419 (July 13, 2017) (Order Approving File No. SR-FINRA-2017-007).
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The Securities and Exchange Commission (the ``SEC'' or the
``Commission'') approved a rule change to restructure the Financial
Industry Regulatory Authority (``FINRA'') representative-level
qualification examination program.\7\ The rule change, which became
effective on October 1, 2018, restructured the examination program into
a more efficient format whereby all new representative-level applicants
are required to take a general knowledge examination (the Securities
Industry Essentials Examination (``SIE'')) and a tailored, specialized
knowledge examination (a revised representative-level qualification
examination) for their particular registered role. Individuals are not
required to be associated with the Exchange or any other self-
regulatory organization (``SRO'') member to be eligible to take the
SIE. However, passing the SIE alone will not qualify an individual for
registration with the Exchange. To be eligible for registration with
the Exchange, an individual must also be associated with a firm, pass
an appropriate qualification examination for a representative or
principal and satisfy the other requirements relating to the
registration process.
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\7\ Id.
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The Exchange also proposes to add Interpretations and Policies .09
to Rule 203 ``Summary of Qualifications Requirements'' which summarizes
the qualification requirements for each of the required registration
categories described in the Exchange Rules.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act \8\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \9\ 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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change will improve
the efficiency of the Exchange's examination requirements, without
compromising the qualification standards, by eliminating duplicative
testing of general securities knowledge on examinations. FINRA has
indicated that the SIE was developed in an effort to adopt an
examination that would assess basic product knowledge; the structure
and function of the securities industry markets, regulatory agencies
and their functions; and regulated and
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prohibited practices. The Exchange also notes that the introduction of
the SIE and expansion of the pool of individuals who are eligible to
take the SIE, has the potential of enhancing the pool of prospective
securities industry professionals by introducing them to securities
laws, rules and regulations and appropriate conduct before they join
the industry in a registered capacity. Lastly, the Exchange notes
adopting the SIE requirement is consistent with the requirement
recently adopted by MIAX Options.\10\
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\10\ See supra note 6.
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Furthermore, the Exchange believes that adding Interpretations and
Policies .09 to Rule 203 will provide greater clarity regarding the
Exchange's examination requirements as updated by, and those remaining
in effect following, the proposed rule change, and consistency with the
rules of other exchanges.\11\
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\11\ See e.g. Cboe Exchange, Inc. Rule 3.6A Interpretations and
Policies .08(b) and MIAX Options Rule 203, Qualification and
Registration of Members and Associated Persons, Interpretations and
Policies .09.
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Additionally, the Exchange believes that although MIAX Emerald
rules may, in certain instances, intentionally differ from MIAX Options
rules, the proposed rule change will promote uniformity with MIAX
Options with respect to rules that are intended to be identical. The
Exchange believes that it will reduce the potential for confusion by
its members that are also members of MIAX Options with respect to rules
that are intended to be identical.
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 Exchange believes that
the proposed rule change, which harmonizes its rules with similar
filings by the other national securities exchanges,\12\ will reduce the
regulatory burden placed on market participants engaged in trading
activities across different markets. The Exchange believes that the
harmonization of these registration requirements across the various
markets will reduce burdens on competition by removing impediments to
participation in the national market system and promoting competition
among participants across the multiple national securities exchanges.
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\12\ Id.
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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 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, 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 \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice 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) \15\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\16\ 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 Exchange states that
such waiver will help reduce potential confusion by having consistent
registration requirement rules across its affiliated exchanges which
will, among other things, help protect investors. Additionally, the
Exchange states the proposed rule change will create a more efficient
examination program which, among other things, is in the public
interest. The Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest because it will allow MIAX Emerald to harmonize its
registration rules with the MIAX Options rules such that members will
be subject to the same requirements, which are consistent across the
industry and, therefore, the Commission designates the proposed rule
change to be operative upon filing.\17\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ 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-EMERALD-2019-07 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-EMERALD-2019-07. 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
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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 submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-EMERALD-2019-07 and should be submitted
on or before April 3, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-04556 Filed 3-12-19; 8:45 am]
BILLING CODE 8011-01-P