80 FR 70856 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX Rule 521

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 220 (November 16, 2015)

[Federal Register Volume 80, Number 220 (Monday, November 16, 2015)]
[Notices]
[Pages 70856-70857]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-28861]



[[Page 70856]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76392; File No. SR-MIAX-2015-62]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend MIAX Rule 521

November 9, 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 November 4, 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, 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 Rule 521, Nullification 
and Adjustment of Options Transactions Including Obvious Errors, to 
modify the amount to be charged to Members that appeal an Official 
ruling when the ruling is sustained and not overturned or modified, and 
to pass through other market center charges associated with obvious 
error determinations.
    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
    On May 7, 2015 the Exchange filed a proposed rule change to replace 
Exchange Rule 521 entitled ``Obvious and Catastrophic Errors'' with new 
Exchange Rule 521 entitled ``Nullification and Adjustment of Options 
Transactions Including Obvious Errors.'' Rule 521 became operative on 
May 8, 2015.\3\ Rule 521 was amended in conjunction with amendments 
made by all U.S. options exchanges in order to harmonize their 
respective rules related to the adjustment and nullification of 
erroneous options transactions. The Exchange believes that Rule 521, 
together with comparable harmonized rules of the other U.S. options 
exchanges,\4\ provides transparency and finality with respect to the 
adjustment and nullification of erroneous options transactions, 
achieving consistent results for participants across the options 
exchanges while maintaining a fair and orderly market, protecting 
investors and protecting the public interest.
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    \3\ See Securities Exchange Act Release No. 74918 (May 8, 2015), 
80 FR 27781 (May 14, 2015) (SR-MIAX-2015-35).
    \4\ See, e.g., NASDAQ OMX PHLX LLC (``PHLX'') Rule 1092(l) and 
BATS Exchange, Inc. (``BATS'') Rule 20.6. See also, e.g., Securities 
Exchange Act Release Nos. 74556 (March 20, 2015), 80 FR 16031 (March 
26, 2015) (SR-BATS-2014-067), and 75488 (July 20, 2015), 80 FR 44164 
(July 24, 2015) (SR-Phlx-2015-65).
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    The purpose of the proposed rule change is to further harmonize 
Rule 521 with the rules of other exchanges by modifying the amount to 
be charged to Members that appeal an Official ruling under Rule 521 if 
such ruling is sustained and not overturned or modified, and to permit 
the Exchange to pass along charges assessed by another market center in 
connection with Obvious Error and Catastrophic Error determination 
requests presented to that market center by the Exchange on a Member's 
behalf.
    The Exchange proposes to amend Section (l)(2) of the Rule to charge 
$500.00 to MIAX Members that appeal an Official ruling when such ruling 
is sustained and not overturned or modified, and to add new language to 
permit the Exchange to pass along charges assessed by another market 
center in connection with Obvious Error and Catastrophic Error 
determination requests presented to that market center by the Exchange 
on a Member's behalf. Currently, the Exchange charges Members $250.00 
in this circumstance. The Exchange proposes to increase this charge 
from $250.00 to $500.00.
2. Statutory Basis
    The Exchange believes that its proposal to amend Rule 521 is 
consistent with Section 6(b) of the Act \5\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \6\ in particular, in that 
it provides for an equitable allocation of reasonable fees and other 
charges among Exchange members.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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    The $500.00 charge and the provision to pass through charges from 
other market centers proposed herein is just and equitable and not 
unfairly discriminatory because it would apply equally to all MIAX 
Members seeking review on appeal of Official rulings pursuant to Rule 
521(l), and will not be assessed if the ruling giving rise to the 
appeal is modified or reversed. The $500.00 charge is consistent with 
the amount charged by other U.S. options exchanges for unsuccessful 
appeals under their obvious error rules.\7\
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    \7\ See supra note 4.
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    The provision to pass through charges from other market centers 
proposed herein is just and equitable and not unfairly discriminatory 
because it would apply equally to all MIAX Members requesting Obvious 
Error or Catastrophic Error determinations from other market centers 
through the Exchange. The pass through charge is also consistent with 
pass through charges charged by other U.S. options exchanges under 
their obvious error rules.\8\ The Exchange believes that it will 
prevent fraudulent and manipulative practices, promote just and 
equitable principles of trade, and remove impediments to and perfect 
the mechanisms of a free and open market and a national market system 
by discouraging frivolous appeals of Official rulings made under Rule 
521. Further, it will allow the Exchange to recoup its administrative 
costs associated with Rule 521 appeals, and provide additional 
resources to the Exchange to administer its regulatory functions, 
including appeals of Official rulings under Rule 521(l).
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    \8\ See supra note 4.
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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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
does not believe that the proposal will have any impact on

[[Page 70857]]

competition in that the $500.00 charge and the provision of pass 
through charges from other market centers proposed herein will apply 
equally to all MIAX Members submitting appeals pursuant to Rule 521(l).

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act,\9\ and Rule 19b-4(f)(2) \10\ thereunder. 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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-2015-62 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-2015-62. 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-2015-62, and should be 
submitted on or before December 7, 2015.
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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\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-28861 Filed 11-13-15; 8:45 am]
BILLING CODE 8011-01-P