81 FR 36635 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 506

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 109 (June 7, 2016)

Page Range		36635-36636
FR Document		2016-13313

Federal Register, Volume 81 Issue 109 (Tuesday, June 7, 2016)

[Federal Register Volume 81, Number 109 (Tuesday, June 7, 2016)]
[Notices]
[Pages 36635-36636]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-13313]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77957; File No. SR-MIAX-2016-12]

Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Exchange Rule 506

June 1, 2016.
Pursuant to 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 May 24, 2016, 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.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 506,
Collection and Dissemination of Quotations.
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 506, Collection and
Dissemination of Quotations, to state that the Exchange shall
disseminate an updated bid and offer price, together with the size
associated with such bid and offer, when the size associated with the
Exchange's bid (offer) increases by an amount greater than or equal to
a designated percentage of the previously disseminated bid (offer) size
(the ``percentage size increase'').
Current Rule 506(b) states that the Exchange shall disseminate an
updated bid and offer price, together with the size associated with
such bid and offer when: (i) The Exchange's disseminated bid or offer
price increases or decreases; (ii) the size associated with the
Exchange's disseminated bid or offer decreases; or (iii) the size
associated with the Exchange's bid (offer) increases by an amount
greater than or equal to a percentage of the size associated with the
previously disseminated bid (offer). Such percentage, which shall never
exceed 20%, shall be determined on a class-by-class basis by the
Exchange and announced to the Membership through a Regulatory
Circular.\3\
---------------------------------------------------------------------------

\3\ See Exchange Rule 506(b)(1).
---------------------------------------------------------------------------

Current Rule 506(b)(1)(iii) does not include a minimum percentage
size increase that must be equaled or exceeded before the Exchange's
System \4\ will update the Exchange's disseminated bid and offer when
the bid or offer price remains the same.\5\ The Exchange is proposing
to add a minimum percentage size increase to Rule 506(b)(1)(iii) that
must be met in order for the System to update the Exchange's
disseminated quotation. Specifically, the Rule would state that such
percentage shall never be less than 10% or greater than the current
20%. Thus, under the proposed Rule, the percentage size increase must
be at least 10% before the System will update the Exchange's
disseminated quotation at the same price, and the Exchange may never
establish a percentage size increase that is greater than 20%.
---------------------------------------------------------------------------

\4\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
\5\ The System automatically disseminates an updated bid and
offer price, together with the size associated with such bid and
offer each time the Exchange's disseminated bid or offer price
increases or decreases, and when the size associated with the
Exchange's disseminated bid or offer decreases. See Exchange Rules
506(b)(1)(i) and (ii). The instant proposed rule change addresses
only the circumstance where the Exchange's disseminated size
increases at the same price as the prior disseminated price.
---------------------------------------------------------------------------

The Exchange will continue to determine the level of the required
percentage size increase on a class-by-class basis and announce this to
the Membership through a Regulatory Circular. As stated in the current
Rule, the percentage size increase shall never exceed 20%, meaning that
in all cases where the Exchange's disseminated size at the same price
increases by 20% or more, the System will update the Exchange's
disseminated bid and offer.
The purpose of the proposed rule change is to mitigate quote
traffic by establishing a minimum percentage size increase at the same
price which must be met before the System will disseminate an updated
bid and offer. In order for the System to update the size of the
disseminated bid and offer at the previously disseminated price, the
size of the bid or offer must increase by at least 10%, or no update
will occur.
The Exchange currently lists 318,280 option series overlying 2,390
underlying securities \6\ for which it must publish the highest bid,
lowest offer, and the aggregate quotation size available for each,
under Rule 602 of Regulation NMS.\7\ Given the number of series and the
number of quote updates submitted by Members on a continual basis
throughout the trading day, the Exchange believes there is a benefit in
establishing a minimum percentage size increase at the same price that
must be met before the Exchange will disseminate an updated quotation.
The minimum percentage size will ensure that only quotations at the
same price with a meaningful percentage size increase are disseminated
by the System.
---------------------------------------------------------------------------

\6\ Data as of May 2, 2016.
\7\ 17 CFR 242.602.
---------------------------------------------------------------------------

The Exchange believes that the proposed minimum percentage size
increase required for the System to update the Exchange's disseminated
bid and offer at the previously disseminated price will reduce the
dissemination of quotations that do not represent a material change in
size from the previously disseminated quotation, thus making the System
and the marketplace as a whole more efficient. Further, the Exchange
believes the proposed rule change will alleviate the potential burden
on quotation vendors in handling excessive quote updates that

[[Page 36636]]

provide minimal value due to relatively small incremental changes in
the aggregate size of bids and offers available on the Exchange.
The Exchange will announce the implementation date of the proposed
rule change by Regulatory Circular to be published no later than 60
days following the operative date of the proposed rule. The
implementation date will be no later than 60 days following the
issuance of the Regulatory Circular.
2. Statutory Basis
MIAX 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.
---------------------------------------------------------------------------

\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

The proposed rule change is designed to remove impediments to and
perfect the mechanisms of a free and open national market system by
reducing the frequency and number of extraneous quotation updates
disseminated by the System. This would enable quotation vendors to who
the Exchange disseminates quotations to operate more efficiently, which
in turn would allow the national market system to operate more
efficiently.
Further, the proposed rule change is designed to protect investors
and the public interest and to promote just and equitable principles of
trade by ensuring only quotation updates that represent a meaningful
increase in the aggregate size available on the Exchange are
disseminated, thereby reducing the frequency and number of quotation
updates that are disseminated by the System, that quotation vendors
must handle, making the market as a whole more efficient.

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 the
proposed rule change will not impose any burden on intra-market
competition because it applies to all MIAX participants equally, thus
placing all MIAX participants on an equal playing field.

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 \10\ and Rule 19b-4(f)(6) \11\
thereunder.
---------------------------------------------------------------------------

\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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.
---------------------------------------------------------------------------

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 rule-comments@sec.gov. Please include
File No. SR-MIAX-2016-12 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-MIAX-2016-12. 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 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; 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-2016-12 and should be
submitted on or before June 28, 2016.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Brent J. Fields,
Secretary.
---------------------------------------------------------------------------

\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2016-13313 Filed 6-6-16; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 109 / Tuesday, June 7, 2016 / Notices 36635

Please direct your written comment to places specified in Item IV below. The 10% or greater than the current 20%.
Pamela Dyson, Director/Chief Exchange has prepared summaries, set Thus, under the proposed Rule, the
Information Officer, Securities and forth in sections A, B, and C below, of percentage size increase must be at least
Exchange Commission, c/o Remi Pavlik- the most significant aspects of such 10% before the System will update the
Simon, 100 F Street NE., Washington, statements. Exchange’s disseminated quotation at
DC 20549 or send an email to: PRA_ the same price, and the Exchange may
A. Self-Regulatory Organization’s
Mailbox@sec.gov. never establish a percentage size
Statement of the Purpose of, and
Dated: June 1, 2016. increase that is greater than 20%.
Statutory Basis for, the Proposed Rule The Exchange will continue to
Brent J. Fields, Change determine the level of the required
Secretary.
1. Purpose percentage size increase on a class-by-
[FR Doc. 2016–13321 Filed 6–6–16; 8:45 am] class basis and announce this to the
BILLING CODE 8011–01–P
The Exchange proposes to amend
Exchange Rule 506, Collection and Membership through a Regulatory
Dissemination of Quotations, to state Circular. As stated in the current Rule,
that the Exchange shall disseminate an the percentage size increase shall never
SECURITIES AND EXCHANGE exceed 20%, meaning that in all cases
COMMISSION updated bid and offer price, together
with the size associated with such bid where the Exchange’s disseminated size
[Release No. 34–77957; File No. SR–MIAX– and offer, when the size associated with at the same price increases by 20% or
2016–12]
the Exchange’s bid (offer) increases by more, the System will update the
an amount greater than or equal to a Exchange’s disseminated bid and offer.
Self-Regulatory Organizations; Miami The purpose of the proposed rule
International Securities Exchange LLC; designated percentage of the previously
change is to mitigate quote traffic by
Notice of Filing and Immediate disseminated bid (offer) size (the
establishing a minimum percentage size
Effectiveness of a Proposed Rule ‘‘percentage size increase’’).
Current Rule 506(b) states that the increase at the same price which must
Change To Amend Exchange Rule 506 be met before the System will
Exchange shall disseminate an updated
June 1, 2016. bid and offer price, together with the disseminate an updated bid and offer. In
Pursuant to section 19(b)(1) of the size associated with such bid and offer order for the System to update the size
Securities Exchange Act of 1934 when: (i) The Exchange’s disseminated of the disseminated bid and offer at the
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 bid or offer price increases or decreases; previously disseminated price, the size
notice is hereby given that on May 24, (ii) the size associated with the of the bid or offer must increase by at
2016, Miami International Securities Exchange’s disseminated bid or offer least 10%, or no update will occur.
The Exchange currently lists 318,280
Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) decreases; or (iii) the size associated
option series overlying 2,390 underlying
filed with the Securities and Exchange with the Exchange’s bid (offer) increases
securities 6 for which it must publish
Commission (‘‘Commission’’) a by an amount greater than or equal to
the highest bid, lowest offer, and the
proposed rule change as described in a percentage of the size associated with
aggregate quotation size available for
Items I, II, and III below, which Items the previously disseminated bid (offer).
each, under Rule 602 of Regulation
have been prepared by the Exchange. Such percentage, which shall never
NMS.7 Given the number of series and
The Commission is publishing this exceed 20%, shall be determined on a
the number of quote updates submitted
notice to solicit comments on the class-by-class basis by the Exchange and
by Members on a continual basis
proposed rule change from interested announced to the Membership through
throughout the trading day, the
persons. a Regulatory Circular.3
Current Rule 506(b)(1)(iii) does not Exchange believes there is a benefit in
I. Self-Regulatory Organization’s establishing a minimum percentage size
include a minimum percentage size
Statement of the Terms of Substance of increase at the same price that must be
increase that must be equaled or
the Proposed Rule Change met before the Exchange will
exceeded before the Exchange’s
The Exchange is filing a proposal to System 4 will update the Exchange’s disseminate an updated quotation. The
amend Exchange Rule 506, Collection disseminated bid and offer when the bid minimum percentage size will ensure
and Dissemination of Quotations. or offer price remains the same.5 The that only quotations at the same price
The text of the proposed rule change Exchange is proposing to add a with a meaningful percentage size
is available on the Exchange’s Web site minimum percentage size increase to increase are disseminated by the
at http://www.miaxoptions.com/filter/ Rule 506(b)(1)(iii) that must be met in System.
wotitle/rule_filing, at MIAX’s principal The Exchange believes that the
order for the System to update the
office, and at the Commission’s Public proposed minimum percentage size
Exchange’s disseminated quotation.
Reference Room. increase required for the System to
Specifically, the Rule would state that
update the Exchange’s disseminated bid
II. Self-Regulatory Organization’s such percentage shall never be less than
and offer at the previously disseminated
Statement of the Purpose of, and price will reduce the dissemination of
3 See Exchange Rule 506(b)(1).
Statutory Basis for, the Proposed Rule quotations that do not represent a
4 The term ‘‘System’’ means the automated
Change material change in size from the
trading system used by the Exchange for the trading
In its filing with the Commission, the of securities. See Exchange Rule 100. previously disseminated quotation, thus
asabaliauskas on DSK3SPTVN1PROD with NOTICES

5 The System automatically disseminates an
Exchange included statements making the System and the marketplace
updated bid and offer price, together with the size
concerning the purpose of and basis for associated with such bid and offer each time the
as a whole more efficient. Further, the
the proposed rule change and discussed Exchange’s disseminated bid or offer price increases Exchange believes the proposed rule
any comments it received on the or decreases, and when the size associated with the change will alleviate the potential
proposed rule change. The text of these Exchange’s disseminated bid or offer decreases. See burden on quotation vendors in
Exchange Rules 506(b)(1)(i) and (ii). The instant
statements may be examined at the proposed rule change addresses only the
handling excessive quote updates that
circumstance where the Exchange’s disseminated
1 15 U.S.C. 78s(b)(1). 6 Data as of May 2, 2016.
size increases at the same price as the prior
2 17 CFR 240.19b–4. disseminated price. 7 17 CFR 242.602.

VerDate Sep<11>2014 19:13 Jun 06, 2016 Jkt 238001 PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 E:\FR\FM\07JNN1.SGM 07JNN1

36636 Federal Register / Vol. 81, No. 109 / Tuesday, June 7, 2016 / Notices

provide minimal value due to relatively applies to all MIAX participants All submissions should refer to File
small incremental changes in the equally, thus placing all MIAX Number SR–MIAX–2016–12. This file
aggregate size of bids and offers participants on an equal playing field. number should be included on the
available on the Exchange. subject line if email is used. To help the
C. Self-Regulatory Organization’s
The Exchange will announce the Commission process and review your
Statement on Comments on the
implementation date of the proposed comments more efficiently, please use
Proposed Rule Change Received From
rule change by Regulatory Circular to be only one method. The Commission will
Members, Participants, or Others
published no later than 60 days post all comments on the Commission’s
following the operative date of the Written comments were neither Internet Web site (http://www.sec.gov/
proposed rule. The implementation date solicited nor received. rules/sro.shtml). Copies of the
will be no later than 60 days following III. Date of Effectiveness of the submission, all subsequent
the issuance of the Regulatory Circular. Proposed Rule Change and Timing for amendments, all written statements
2. Statutory Basis Commission Action with respect to the proposed rule
change that are filed with the
MIAX believes that its proposed rule Because the foregoing proposed rule
Commission, and all written
change is consistent with section 6(b) of change does not: (i) Significantly affect
communications relating to the
the Act 8 in general, and furthers the the protection of investors or the public
proposed rule change between the
objectives of section 6(b)(5) of the Act 9 interest; (ii) impose any significant
Commission and any person, other than
in particular, in that it is designed to burden on competition; and (iii) become
those that may be withheld from the
prevent fraudulent and manipulative operative for 30 days after the date of
public in accordance with the
acts and practices, to promote just and the filing, or such shorter time as the
provisions of 5 U.S.C. 552, will be
equitable principles of trade, to foster Commission may designate, it has
available for Web site viewing and
cooperation and coordination with become effective pursuant to 19(b)(3)(A)
printing in the Commission’s Public
persons engaged in facilitating of the Act 10 and Rule 19b–4(f)(6) 11
Reference Room, 100 F Street NE.,
transactions in securities, to remove thereunder.
At any time within 60 days of the Washington, DC 20549, on official
impediments to and perfect the business days between the hours of
mechanisms of a free and open market filing of the proposed rule change, the
Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of the
and a national market system and, in filing also will be available for
general, to protect investors and the temporarily suspend such rule change if
it appears to the Commission that such inspection and copying at the principal
public interest. office of the Exchange. All comments
The proposed rule change is designed action is necessary or appropriate in the
public interest, for the protection of received will be posted without change;
to remove impediments to and perfect the Commission does not edit personal
the mechanisms of a free and open investors, or otherwise in furtherance of
the purposes of the Act. If the identifying information from
national market system by reducing the submissions. You should submit only
frequency and number of extraneous Commission takes such action, the
Commission shall institute proceedings information that you wish to make
quotation updates disseminated by the available publicly. All submissions
System. This would enable quotation to determine whether the proposed rule
should be approved or disapproved. should refer to File Number SR–MIAX–
vendors to who the Exchange 2016–12 and should be submitted on or
disseminates quotations to operate more IV. Solicitation of Comments before June 28, 2016.
efficiently, which in turn would allow
the national market system to operate Interested persons are invited to For the Commission, by the Division of
more efficiently. submit written data, views, and Trading and Markets, pursuant to delegated
arguments concerning the foregoing, authority.12
Further, the proposed rule change is
designed to protect investors and the including whether the proposed rule Brent J. Fields,
public interest and to promote just and change is consistent with the Act. Secretary.
equitable principles of trade by ensuring Comments may be submitted by any of [FR Doc. 2016–13313 Filed 6–6–16; 8:45 am]
only quotation updates that represent a the following methods: BILLING CODE 8011–01–P
meaningful increase in the aggregate Electronic Comments
size available on the Exchange are
• Use the Commission’s Internet SECURITIES AND EXCHANGE
disseminated, thereby reducing the
comment form (http://www.sec.gov/ COMMISSION
frequency and number of quotation
rules/sro.shtml); or
updates that are disseminated by the • Send an email to rule-comments@
System, that quotation vendors must Proposed Collection; Comment
sec.gov. Please include File No. SR– Request
handle, making the market as a whole MIAX–2016–12 on the subject line.
more efficient. Upon Written Request Copies Available
Paper Comments From: Securities and Exchange
B. Self-Regulatory Organization’s
Statement on Burden on Competition • Send paper comments in triplicate Commission, Office of FOIA Services,
to Secretary, Securities and Exchange 100 F Street NE., Washington, DC
The Exchange does not believe that Commission, 100 F Street NE., 20549–2736
the proposed rule change will impose Washington, DC 20549–1090. Extension: Rules 7a–15 thru 7a–37, SEC File
asabaliauskas on DSK3SPTVN1PROD with NOTICES

any burden on competition that is not
No. 270–115, OMB Control No. 3235–
necessary or appropriate in furtherance 10 15 U.S.C. 78s(b)(3)(A). 0132
of the purposes of the Act. The 11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
Exchange believes the proposed rule 4(f)(6) requires a self-regulatory organization to give Notice is hereby given that, pursuant
change will not impose any burden on the Commission written notice of its intent to file to the Paperwork Reduction Act of 1995
the proposed rule change at least five business days (44 U.S.C. 3501 et seq.), the Securities
intra-market competition because it prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
and Exchange Commission
8 15 U.S.C. 78f(b). Commission. The Exchange has satisfied this
9 15 U.S.C. 78f(b)(5). requirement. 12 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 19:13 Jun 06, 2016 Jkt 238001 PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 E:\FR\FM\07JNN1.SGM 07JNN1

Document Created: 2018-02-08 07:31:43
Document Modified: 2018-02-08 07:31:43

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		81 FR 36635