80 FR 42856 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rules 307 and 309 To Extend the SPY Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 138 (July 20, 2015)

Page Range		42856-42857
FR Document		2015-17659
Federal Register, Volume 80 Issue 138 (Monday, July 20, 2015)
[Federal Register Volume 80, Number 138 (Monday, July 20, 2015)]
[Notices]
[Pages 42856-42857]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-17659]



[[Page 42856]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75448; File No. SR-MIAX-2015-46]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Exchange Rules 307 and 309 To Extend the 
SPY Pilot Program

July 14, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 10, 2015, Miami International Securities Exchange LLC 
(``MIAX'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the 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 the 
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 July 
12, 2016. 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 
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 Exchange notes that it is not aware of any problems created by 
the current SPY Pilot Program and does not foresee any problems with 
the proposed extension. The Exchange formally submitted a Pilot Report 
for the SPY Pilot Program as part of this filing. In addition, the 
Exchange represents that if it chooses to extend or seek permanent 
approval of the SPY Pilot Program, the Exchange will submit another 
Pilot Report at least thirty (30) days prior to the expiration of the 
extended SPY Pilot Program time period which would cover the period 
between reports. 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.
    The Exchange purposes [sic] to extend the SPY Pilot Program in 
order for the Exchange and the Commission to have additional time to 
evaluate the Pilot and its effect on the market and to determine 
whether to seek permanent approval. Prior to the expiration of the SPY 
Pilot Program and based upon the findings of the Pilot Report, 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. If the SPY Pilot Program is not extended or adopted on a 
permanent basis by the expiration of the Extended Pilot, the position 
limits for SPY would revert to limits in effect prior to the 
commencement of the SPY 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.
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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. The Exchange also believes that 
economically equivalent products should be treated in an equivalent 
manner so as to avoid regulatory arbitrage, especially with respect to 
position limits. Treating SPY and SPX options differently by virtue of 
imposing different position limits is inconsistent with the notion of 
promoting just and equitable principles of trade and removing 
impediments to perfect the mechanisms of a free and open market. At the 
same time, the Exchange believes that the elimination of position 
limits for SPY options would not increase market volatility or 
facilitate the ability to manipulate the market.

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,

[[Page 42857]]

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 as the Exchange believes other 
competing options exchanges will also extend the SPY Pilot Program for 
another year.

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 from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6) thereunder.\5\
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    \5\ 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 pursuant to Rule 19b-4(f)(6) under the 
Act \6\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \7\ 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 believes that waiver of the operative delay is consistent with 
the protection of investors and the public interest because it will 
allow the SPY Pilot Program to continue without interruption. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the operative delay and 
designates the proposed rule change operative upon filing.\8\
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    \6\ 17 CFR 240.19b-4(f)(6).
    \7\ 17 CFR 240.19b-4(f)(6)(iii).
    \8\ For purposes only of waiving the 30-day operative delay, 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-2015-46 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-2015-46. 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 such 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 submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-MIAX-2015-46, and should be 
submitted on or before August 10, 2015.
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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\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-17659 Filed 7-17-15; 8:45 am]
BILLING CODE 8011-01-P
42856 Federal Register / Vol. 80, No. 138 / Monday, July 20, 2015 / Notices

SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s Prior to the expiration of the SPY Pilot
COMMISSION Statement of the Purpose of, and Program and based upon the findings of
Statutory Basis for, the Proposed Rule the Pilot Report, the Exchange will be
[Release No. 34–75448; File No. SR–MIAX–
Change able to either extend the SPY Pilot
Program, adopt the SPY Pilot Program
2015–46] 1. Purpose
on a permanent basis, or terminate the
The Exchange proposes to amend SPY Pilot Program. If the SPY Pilot
Self-Regulatory Organizations; Miami
Exchange Rule 307, Commentary .01, Program is not extended or adopted on
International Securities Exchange LLC;
Position Limits, and Exchange Rule 309, a permanent basis by the expiration of
Notice of Filing and Immediate Commentary .01, Exercise limits, to
Effectiveness of a Proposed Rule the Extended Pilot, the position limits
extend the duration of the SPY Pilot for SPY would revert to limits in effect
Change To Amend Exchange Rules Program through July 12, 2016. There prior to the commencement of the SPY
307 and 309 To Extend the SPY Pilot are no substantive changes being Pilot Program.
Program proposed to the SPY Pilot Program. In
proposing to extend the SPY Pilot 2. Statutory Basis
July 14, 2015.
Program, the Exchange affirms its MIAX believes that its proposed rule
Pursuant to Section 19(b)(1) of the consideration of several factors that change is consistent with Section 6(b) of
Securities Exchange Act of 1934 (the support the proposal to establish the the Act 3 in general, and furthers the
‘‘Act’’),1 and Rule 19b–4 thereunder,2 SPY Pilot Program, which include: (1) objectives of Section 6(b)(5) of the Act 4
notice is hereby given that on July 10, The liquidity of the option and the in particular, in that it is designed to
2015, Miami International Securities underlying security; (2) the market prevent fraudulent and manipulative
Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) capitalization of the underlying security acts and practices, to promote just and
filed with the Securities and Exchange and the securities that make up the S&P equitable principles of trade, to foster
Commission (‘‘Commission’’) the 500 Index; (3) options reporting cooperation and coordination with
proposed rule change as described in requirements; and (4) financial persons engaged in facilitating
Items I and II below, which Items have requirements imposed by MIAX and the transactions in securities, to remove
been prepared by the Exchange. The Commission. impediments to and perfect the
Commission is publishing this notice to The Exchange notes that it is not mechanisms of a free and open market
solicit comments on the proposed rule aware of any problems created by the and a national market system and, in
change from interested persons. current SPY Pilot Program and does not general, to protect investors and the
foresee any problems with the proposed public interest.
I. Self-Regulatory Organization’s extension. The Exchange formally Specifically, the Exchange believes
Statement of the Terms of the Substance submitted a Pilot Report for the SPY that extending the SPY Pilot Program
of the Proposed Rule Change Pilot Program as part of this filing. In promotes just and equitable principles
addition, the Exchange represents that if of trade by permitting market
The Exchange is filing a proposal to it chooses to extend or seek permanent participants, including market makers,
amend Exchange Rules 307 and 309 to approval of the SPY Pilot Program, the institutional investors and retail
extend the pilot program that eliminates Exchange will submit another Pilot investors, to establish greater positions
the position and exercise limits for Report at least thirty (30) days prior to when pursuing their investment goals
physically-settled options on the SPDR the expiration of the extended SPY Pilot and needs. The Exchange also believes
S&P 500 ETF Trust (‘‘SPY Pilot Program time period which would cover that economically equivalent products
Program’’). the period between reports. The Pilot should be treated in an equivalent
The text of the proposed rule change Report will compare the impact of the manner so as to avoid regulatory
is available on the Exchange’s Web site pilot program, if any, on the volumes of arbitrage, especially with respect to
at http://www.miaxoptions.com/filter/ SPY options and the volatility in the position limits. Treating SPY and SPX
wotitle/rule_filing, at MIAX’s principal price of the underlying SPY contract, options differently by virtue of imposing
office, and at the Commission’s Public particularly at expiration. The Pilot different position limits is inconsistent
Reference Room. Report also will detail the size and with the notion of promoting just and
different types of strategies employed equitable principles of trade and
II. Self-Regulatory Organization’s with respect to positions established in removing impediments to perfect the
Statement of the Purpose of, and SPY options; note whether any mechanisms of a free and open market.
Statutory Basis for, the Proposed Rule problems, in the underlying SPY ETF or At the same time, the Exchange believes
Change otherwise, arose as a result of the no- that the elimination of position limits
limit approach; and include any other for SPY options would not increase
In its filing with the Commission, the information that may be useful in
Exchange included statements market volatility or facilitate the ability
evaluating the effectiveness of the pilot to manipulate the market.
concerning the purpose of and basis for program. In preparing the Pilot Report,
the proposed rule change and discussed the Exchange will utilize various data B. Self-Regulatory Organization’s
any comments it received on the elements such as volume and open Statement on Burden on Competition
proposed rule change. The text of these interest. In addition the Exchange The Exchange does not believe that
statements may be examined at the would make available to Commission the proposed rule change will impose
places specified in Item IV below. The
mstockstill on DSK4VPTVN1PROD with NOTICES

staff data elements relating to the any burden on competition that is not
Exchange has prepared summaries, set effectiveness of the SPY Pilot Program. necessary or appropriate in furtherance
forth in sections A, B, and C below, of The Exchange purposes [sic] to extend of the purposes of the Act. The
the most significant aspects of such the SPY Pilot Program in order for the proposed rule change is not designed to
statements. Exchange and the Commission to have address any aspect of competition,
additional time to evaluate the Pilot and
1 15 U.S.C. 78s(b)(1). its effect on the market and to determine 3 15 U.S.C. 78f(b).
2 17 CFR 240.19b–4. whether to seek permanent approval. 4 15 U.S.C. 78f(b)(5).

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Federal Register / Vol. 80, No. 138 / Monday, July 20, 2015 / Notices 42857

whether between the Exchange and its Commission summarily may available publicly. All submissions
competitors, or among market temporarily suspend such rule change if should refer to File Number SR–MIAX–
participants. Instead, the proposed rule it appears to the Commission that such 2015–46, and should be submitted on or
change is designed to allow the SPY action is necessary or appropriate in the before August 10, 2015.
Pilot Program to continue as the public interest, for the protection of For the Commission, by the Division of
Exchange believes other competing investors, or otherwise in furtherance of Trading and Markets, pursuant to delegated
options exchanges will also extend the the purposes of the Act. If the authority.9
SPY Pilot Program for another year. Commission takes such action, the Robert W. Errett,
Commission shall institute proceedings Deputy Secretary.
C. Self-Regulatory Organization’s to determine whether the proposed rule
Statement on Comments on the should be approved or disapproved.
[FR Doc. 2015–17659 Filed 7–17–15; 8:45 am]
Proposed Rule Change Received From BILLING CODE 8011–01–P
Members, Participants, or Others IV. Solicitation of Comments
Written comments were neither Interested persons are invited to
submit written data, views, and SECURITIES AND EXCHANGE
solicited nor received.
arguments concerning the foregoing, COMMISSION
III. Date of Effectiveness of the including whether the proposed rule [Release No. IA–4140/803–00219]
Proposed Rule Change and Timing for change is consistent with the Act.
Commission Action Comments may be submitted by any of Crescent Capital Group, LP; Notice of
Because the foregoing proposed rule the following methods: Application
change does not: (i) Significantly affect Electronic Comments July 14, 2015.
the protection of investors or the public
interest; (ii) impose any significant • Use the Commission’s Internet AGENCY: Securities and Exchange
burden on competition; and (iii) become comment form (http://www.sec.gov/ Commission (‘‘Commission’’).
operative for 30 days from the date on rules/sro.shtml); or ACTION: Notice of application for an
which it was filed, or such shorter time • Send an email to rule-comments@ exemptive order under Section 206A of
as the Commission may designate, it has sec.gov. Please include File Number SR– the Investment Advisers Act of 1940
become effective pursuant to Section MIAX–2015–46 on the subject line. (the ‘‘Advisers Act’’) and Rule 206(4)–
19(b)(3)(A) of the Act and Rule 19b– Paper Comments 5(e) thereunder.
4(f)(6) thereunder.5
• Send paper comments in triplicate APPLICANT: Crescent Capital Group, LP
A proposed rule change filed
to Brent J. Fields, Secretary, Securities (‘‘Applicant’’).
pursuant to Rule 19b–4(f)(6) under the
and Exchange Commission, 100 F Street
Act 6 normally does not become RELEVANT ADVISERS ACT SECTIONS:
NE., Washington, DC 20549–1090.
operative for 30 days after the date of its Exemption requested under Section
filing. However, Rule 19b–4(f)(6)(iii) 7 All submissions should refer to File 206A of the Advisers Act and Rule
permits the Commission to designate a Number SR–MIAX–2015–46. This file
206(4)–5(e) thereunder from Rule
shorter time if such action is consistent number should be included on the
206(4)–5(a)(1) under the Advisers Act.
with the protection of investors and the subject line if email is used. To help the
Commission process and review your SUMMARY OF APPLICATION: Applicant
public interest. The Exchange has asked requests that the Commission issue an
the Commission to waive the 30-day comments more efficiently, please use
only one method. The Commission will order under Section 206A of the
operative delay. The Exchange believes Advisers Act and Rule 206(4)–5(e)
that waiver of the operative delay is post all comments on the Commission’s
Internet Web site (http://www.sec.gov/ thereunder exempting Applicant from
consistent with the protection of Rule 206(4)–5(a)(1) under the Advisers
investors and the public interest rules/sro.shtml). Copies of the
submission, all subsequent Act to permit Applicant to receive
because it will allow the SPY Pilot compensation from a government entity
Program to continue without amendments, all written statements
with respect to the proposed rule client for investment advisory services
interruption. The Commission believes provided to the government entity
that waiving the 30-day operative delay change that are filed with the
Commission, and all written within the two-year period following a
is consistent with the protection of contribution by a covered associate of
investors and the public interest. communications relating to the
proposed rule change between the Applicant to an official of the
Therefore, the Commission hereby government entity.
waives the operative delay and Commission and any person, other than
those that may be withheld from the FILING DATES: The application was filed
designates the proposed rule change on October 31, 2013, and an amended
operative upon filing.8 public in accordance with the
provisions of 5 U.S.C. 552, will be and restated application was filed on
At any time within 60 days of the
available for Web site viewing and March 12, 2015.
filing of the proposed rule change, the
printing in the Commission’s Public HEARING OR NOTIFICATION OF HEARING: An
5 17 CFR 240.19b–4(f)(6). As required under Rule Reference Room, 100 F Street NE., order granting the application will be
19b–4(f)(6)(iii), the Exchange provided the Washington, DC 20549 on official issued unless the Commission orders a
Commission with written notice of its intent to file business days between the hours of hearing. Interested persons may request
the proposed rule change, along with a brief 10:00 a.m. and 3:00 p.m. Copies of such
description and the text of the proposed rule
a hearing by writing to the
mstockstill on DSK4VPTVN1PROD with NOTICES

change, at least five business days prior to the date filing also will be available for Commission’s Secretary and serving
of filing of the proposed rule change, or such inspection and copying at the principal Applicant with a copy of the request,
shorter time as designated by the Commission. office of the Exchange. All comments personally or by mail. Hearing requests
6 17 CFR 240.19b–4(f)(6).
received will be posted without change; should be received by the Commission
7 17 CFR 240.19b–4(f)(6)(iii).
8 For purposes only of waiving the 30-day
the Commission does not edit personal by 5:30 p.m. on August 10, 2015, and
operative delay, the Commission has considered the
identifying information from should be accompanied by proof of
proposed rule’s impact on efficiency, competition, submissions. You should submit only
and capital formation. See 15 U.S.C. 78c(f). information that you wish to make 9 17 CFR 200.30–3(a)(12).

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Document Created: 2015-12-15 12:57:44
Document Modified: 2015-12-15 12:57:44
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 42856