[Federal Register Volume 84, Number 171 (Wednesday, September 4, 2019)]
[Notices]
[Pages 46586-46588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19000]
[[Page 46586]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86787; File No. SR-PEARL-2019-24]
Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange
Rules 503, Openings on the Exchange, and 515, Execution of Orders
August 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 August 19, 2019, MIAX PEARL, LLC (``MIAX
PEARL'' 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 503,
Openings on the Exchange, and 515, Execution of Orders, to make minor,
non-substantive edits and clarifying changes to the rule text.
The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/pearl at MIAX
PEARL'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 503, Openings on the
Exchange, to amend paragraph (c), Deviation from Standard Opening
Process, to adopt new rule text that identifies the Help Desk staff
authorized to take actions during the Opening Process to maintain a
fair and orderly market and to add greater specificity to the language
currently in place.
First, the Exchange proposes to amend Exchange Rule 503(c),
Deviation from Standard Opening Process, to further clarify which
authorized personnel at the Exchange that may deviate from the standard
Opening Process in certain market conditions. Exchange Rule 503(c)
currently states that the Exchange may deviate from the standard manner
of the Opening Process, including adjusting the timing of the Opening
Process in any option class, when it believes it is necessary in the
interests of a fair and orderly market. The Exchange now proposes to
amend subparagraph (c) to state that Senior Help Desk personnel may
deviate from the standard manner of the Opening Process when necessary,
including delay or compel the opening of any series in any option
class, adjusting the timing of the Opening Process in any option class,
when necessary in the interests of commencing or maintaining a fair and
orderly market, in the event of unusual market conditions or in the
public interest. The Exchange also proposes that it will make and
maintain records to document all determinations to deviate from the
standard manner of the Opening Process, and periodically review these
determinations for consistency with the interests of a fair and orderly
market.
The Exchange is amending the rule to add additional specificity by
designating that only Senior Help Desk personnel may deviate from the
standard manner of the Opening Process when necessary. The Exchange is
also providing examples of the type of actions that Senior Help Desk
personnel may take to ensure a fair and orderly market is maintained.
Additionally, the Exchange is proposing to amend the rule to adopt a
provision stating that the Exchange will maintain records to document
all determinations to deviate from the standard manner of the Opening
Process, and periodically review these determinations for consistency
with the interests of a fair and orderly market. The Exchange notes
that the proposed rule text is similar to that found in the rules for
the Opening Process of the Exchange's affiliates, Miami International
Securities Exchange, LLC (``MIAX'') and MIAX Emerald, LLC (``MIAX
Emerald'').\3\
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\3\ See MIAX Rule 503(g) and MIAX Emerald Rule 503(g).
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Next, the Exchange proposes to amend Exchange Rule 515, Execution
of Orders, to make minor, non-substantive edits and clarifying changes
to the rule text in order to provide consistency and clarity within the
rule text. Specifically, the Exchange proposes to make a number of
minor non-substantive edits to references to ``Rule 515'' throughout
the rule text. Currently, there are several references in Exchange Rule
515 where the rule refers back to itself generally as ``Rule 515.'' The
Exchange proposes to amend all general references in Exchange Rule 515
that are to ``Rule 515'' that do not refer to any particular subsection
or paragraph to be replaced with ``this Rule'' in order to provide
consistency and clarity within the rule text. The proposed changes
would be to references to ``Rule 515'' that are currently in the
following subsections and paragraphs in Exchange Rule 515: Paragraph
(a); paragraph (d); subsection (d)(1); subsection (d)(2)(i); subsection
(d)(2)(iii)(C); subsection (g)(3)(i); and Interpretation and Policy
.02.
Next, the Exchange proposes to amend several paragraphs and
subsections to make corrective changes to the numerical and
alphabetical list item identifiers to properly conform to the
hierarchical heading scheme and list item identifiers used throughout
the Exchange's rulebook. The Exchange notes that anytime there is block
text in a paragraph or subsection that contains a list of numbered
clauses or items that are not specifically broken out into their own
subsections, the Exchange uses romanettes to identify each clause or
item. Accordingly, paragraph (b) contains independent clauses currently
numbered ``(1)'' and ``(2)'' which will be renumbered as ``(i)'' and
``(ii)''. Paragraph (c) contains three separate sentences each with
independent clauses numbered ``(1)'' and ``(2)'' which will each be
renumbered as ``(i)'' and ``(ii)''. Subparagraph (d)(2)(i) contains
three independent clauses currently numbered ``(A)'', ``(B)'' and
``(C)'' which will be renumbered as ``(i)'', ``(ii)'' and ``(iii)'',
respectively. Subparagraph (d)(2)(ii) contains four independent clauses
currently numbered ``(A)'', ``(B)'', ``(C)'' and ``(D)'' which will be
renumbered as ``(i)'', ``(ii)'', ``(iii)'' and ``(iv)'', respectively.
Subparagraph
[[Page 46587]]
(g)(3)(i) contains three independent clauses currently numbered
``(A)'', ``(B)'' and ``(C)'' which will be renumbered as ``(i)'',
``(ii)'' and ``(iii)'', respectively. Finally, subparagraph (g)(3)(ii)
contains four independent clauses currently numbered ``(A)'', ``(B)'',
``(C)'' and ``(D)'' which will be renumbered as ``(i)'', ``(ii)'',
``(iii)'' and ``(iv)'', respectively.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act \4\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \5\ 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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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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First, the Exchange is proposing to amend its current provision
pertaining to the actions that the Exchange may take in the interests
of maintaining a fair and orderly market to adopt a more detailed and
nuanced provision from the Exchange's affiliates, MIAX and MIAX
Emerald.\6\ This provision now identifies which Help Desk personnel may
take actions during the Opening Process (Senior Help Desk personnel)
and provides examples of the type of actions which may be undertaken.
Additionally, the provision provides that the Exchange will make and
maintain records to document all determinations to deviate from the
standard manner of the Opening Process and will periodically review
these determinations for consistency with the interests of a fair and
orderly market. The Exchange believes its proposal promotes just and
equitable principles of trade, removes impediments to and perfects the
mechanisms of a free and open market and a national market system and,
in general, protects investors and the public interest by providing
additional detail in the Exchange's rules and by providing a review
process for instances where there was a deviation from the standard
Opening Process.
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\6\ See supra note 3.
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The Exchange believes its proposal removes impediments to and
perfects the mechanisms of a free and open market by providing clarity
in the Exchange's rules and more detail concerning the Opening Process
on the Exchange. The Exchange believes clarity and transparency
benefits investors and the public and allows investors and the public
to make informed decisions regarding the Opening Process on the
Exchange.
Additionally, the Exchange believes that although MIAX PEARL rules
may, in certain instances, intentionally differ from MIAX and MIAX
Emerald rules, the proposed changes will promote uniformity with MIAX
and MIAX Emerald 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 and MIAX Emerald
if the only differences between MIAX PEARL, MIAX and MIAX Emerald rules
are those that are intended.
The Exchange also believes the proposed changes to Exchange Rule
515 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 changes make clarifying
edits to the rule text of Exchange Rule 515, and correct errors in the
hierarchical heading scheme and list item identifiers to provide
uniformity in the Exchange's rulebook and paragraph formatting. The
Exchange believes that these proposed changes will provide greater
clarity to Members and the public regarding the Exchange's rules and
that it is in the public interest for rules to be accurate and concise
so as to eliminate the potential for confusion.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. Specifically, the Exchange
believes the proposed changes will not impose any burden on intra-
market competition as there is no functional change to the Exchange's
System and because the rules of the Exchange apply to all MIAX PEARL
participants equally. The proposed rule changes will have no impact on
competition as they are not designed to address any competitive issues
but rather are designed to remedy minor non-substantive issues and
provide added clarity to the rule text of Exchange Rules 503 and 515.
In addition, the Exchange does not believe the proposal will impose any
burden on inter-market competition as the proposal does not address any
competitive issues and is intended to protect investors by providing
further transparency regarding the Exchange's functionality. The
Exchange does not believe that the proposed rule change to amend the
provision concerning the actions that the Help Desk may take to deviate
from the standard manner of the Opening Process to maintain a fair and
orderly market will impose any burden on inter-market competition as
the proposed rule change is designed to identify the specific Help Desk
personnel authorized to deviate from the standard manner of the Opening
Process and to provide some examples of the type of actions that may be
undertaken to ensure the operation of a fair and orderly market.
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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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:
[[Page 46588]]
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-PEARL-2019-24 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-PEARL-2019-24. 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-PEARL-2019-24 and should be submitted on
or before September 25, 2019.
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\9\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-19000 Filed 9-3-19; 8:45 am]
BILLING CODE 8011-01-P