81 FR 42032 - 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 81, Issue 124 (June 28, 2016)

Page Range		42032-42033
FR Document		2016-15170
Federal Register, Volume 81 Issue 124 (Tuesday, June 28, 2016)
[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)]
[Notices]
[Pages 42032-42033]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-15170]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78120; File No. SR-MIAX-2016-17]


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

June 22, 2016.
    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 June 10, 2016, 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, 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 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[supreg] S&P 
500[supreg] ETF Trust (``SPY Pilot Program'') and to make non-
substantive technical corrections to Interpretations and Policies .01.
    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
    Exchange Rules 307, Position Limits, and 309, Exercise Limits, 
establish position and exercise limits for aggregate positions in 
option contracts traded on the Exchange. Interpretations and Policies 
.01 to Rule 307 lists specific position limits for options on specific 
underlying securities, and Interpretations and Policies .01 to Rule 309 
lists specific exercise limits for options on specific underlying 
securities. Among the listed specific underlying securities is the 
SPDR[supreg] S&P 500[supreg] ETF Trust (``SPY''). Currently, each of 
these Rules provides that there is no position limit and no exercise 
limit on options overlying SPY. The position and exercise limits for 
options overlying SPY in each of these Rules are the subject of a pilot 
program, which is scheduled to expire on July 12, 2016.\3\
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    \3\ See Securities Exchange Act Release No. 75448 (July 14, 
2015), 80 FR 42856 (July 20, 2015) (SR-MIAX-2015-46) (extending the 
SPY Pilot Program to July 12, 2016).
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    The Exchange proposes to amend Exchange Rule 307, Interpretations 
and Policies .01, and Exchange Rule 309, Interpretations and Policies 
.01, to extend the duration of the SPY Pilot Program through July 12, 
2017. There are no substantive changes being proposed to the SPY Pilot 
Program. The Exchange affirms its consideration of several factors that 
support the proposal to establish and extend 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 has formally submitted a Report 
for the SPY Pilot Program as part of this filing.\4\ 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 SPY 
Pilot Program 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 SPY Pilot Program 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 SPY Pilot Program Report will also 
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 SPY 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.
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    \4\ See Exhibit 3 attached hereto.
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    The Exchange proposes 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 SPY Pilot Program 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 SPY Pilot Program, 
the position limits for options overlying SPY would revert to limits in

[[Page 42033]]

effect prior to the commencement of the SPY Pilot Program.
    Additionally, the Exchange proposes to make non-substantive 
technical changes to the chart of securities in Interpretations and 
Policies .01 of both Rule 307 and 309 to reflect the current names of 
the underlying securities identified in the chart.
2. Statutory Basis
    MIAX believes that its proposed rule change is consistent with 
Section 6(b) of the Act \5\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act \6\ 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 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, 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 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:

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-2016-17 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-2016-17. 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-2016-17, and should be 
submitted on or before July 19, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-15170 Filed 6-27-16; 8:45 am]
 BILLING CODE 8011-01-P
42032 Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Notices

available for Web site viewing and S&P 500® ETF Trust (‘‘SPY Pilot to establish and extend the SPY Pilot
printing in the Commission’s Public Program’’) and to make non-substantive Program, which include: (1) The
Reference Room, 100 F Street NE., technical corrections to Interpretations liquidity of the option and the
Washington, DC 20549 on official and Policies .01. underlying security; (2) the market
business days between the hours of The text of the proposed rule change capitalization of the underlying security
10:00 a.m. and 3:00 p.m. Copies of such is available on the Exchange’s Web site and the securities that make up the S&P
filing also will be available for at http://www.miaxoptions.com/filter/ 500 Index; (3) options reporting
inspection and copying at the principal wotitle/rule_filing, at MIAX’s principal requirements; and (4) financial
office of the Exchange. All comments office, and at the Commission’s Public requirements imposed by MIAX and the
received will be posted without change; Reference Room. Commission.
the Commission does not edit personal II. Self-Regulatory Organization’s The Exchange notes that it is not
identifying information from Statement of the Purpose of, and aware of any problems created by the
submissions. You should submit only Statutory Basis for, the Proposed Rule current SPY Pilot Program and does not
information that you wish to make foresee any problems with the proposed
Change
available publicly. All submissions extension. The Exchange has formally
should refer to File Number SR– In its filing with the Commission, the submitted a Report for the SPY Pilot
NASDAQ–2016–084, and should be Exchange included statements Program as part of this filing.4 In
submitted on or before July 19, 2016. concerning the purpose of and basis for addition, the Exchange represents that if
the proposed rule change and discussed it chooses to extend or seek permanent
For the Commission, by the Division of
Trading and Markets, pursuant to delegated any comments it received on the approval of the SPY Pilot Program, the
authority.10 proposed rule change. The text of these Exchange will submit another SPY Pilot
Brent J. Fields, statements may be examined at the Program Report at least thirty (30) days
Secretary. places specified in Item IV below. The prior to the expiration of the extended
Exchange has prepared summaries, set SPY Pilot Program time period which
[FR Doc. 2016–15173 Filed 6–27–16; 8:45 am]
forth in sections A, B, and C below, of would cover the period between reports.
BILLING CODE 8011–01–P
the most significant aspects of such The SPY Pilot Program Report will
statements. compare the impact of the pilot
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s program, if any, on the volumes of SPY
COMMISSION Statement of the Purpose of, and options and the volatility in the price of
[Release No. 34–78120; File No. SR–MIAX– Statutory Basis for, the Proposed Rule the underlying SPY contract,
2016–17] Change particularly at expiration. The SPY Pilot
Program Report will also detail the size
1. Purpose and different types of strategies
Self-Regulatory Organizations; Miami
International Securities Exchange LLC; Exchange Rules 307, Position Limits, employed with respect to positions
Notice of Filing and Immediate and 309, Exercise Limits, establish established in SPY options; note
Effectiveness of a Proposed Rule position and exercise limits for whether any problems, in the
Change To Amend Exchange Rules aggregate positions in option contracts underlying SPY ETF or otherwise, arose
307 and 309 To Extend the SPY Pilot traded on the Exchange. Interpretations as a result of the no-limit approach; and
Program and Policies .01 to Rule 307 lists include any other information that may
specific position limits for options on be useful in evaluating the effectiveness
June 22, 2016. specific underlying securities, and of the SPY Pilot Program. In preparing
Pursuant to Section 19(b)(1) of the Interpretations and Policies .01 to Rule the Pilot Report, the Exchange will
Securities Exchange Act of 1934 (the 309 lists specific exercise limits for utilize various data elements such as
‘‘Act’’),1 and Rule 19b–4 thereunder,2 options on specific underlying volume and open interest. In addition
notice is hereby given that on June 10, securities. Among the listed specific the Exchange would make available to
2016, Miami International Securities underlying securities is the SPDR® S&P Commission staff data elements relating
Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) 500® ETF Trust (‘‘SPY’’). Currently, to the effectiveness of the SPY Pilot
filed with the Securities and Exchange each of these Rules provides that there Program.
Commission (‘‘Commission’’) the is no position limit and no exercise The Exchange proposes to extend the
proposed rule change as described in limit on options overlying SPY. The SPY Pilot Program in order for the
Items I, II, and III below, which Items position and exercise limits for options Exchange and the Commission to have
have been prepared by the Exchange. overlying SPY in each of these Rules are additional time to evaluate the Pilot and
The Commission is publishing this the subject of a pilot program, which is its effect on the market and to determine
notice to solicit comments on the scheduled to expire on July 12, 2016.3 whether to seek permanent approval.
proposed rule change from interested The Exchange proposes to amend Prior to the expiration of the SPY Pilot
persons. Exchange Rule 307, Interpretations and Program and based upon the findings of
I. Self-Regulatory Organization’s Policies .01, and Exchange Rule 309, the SPY Pilot Program Report, the
Statement of the Terms of the Substance Interpretations and Policies .01, to Exchange will be able to either extend
of the Proposed Rule Change extend the duration of the SPY Pilot the SPY Pilot Program, adopt the SPY
Program through July 12, 2017. There Pilot Program on a permanent basis, or
asabaliauskas on DSK3SPTVN1PROD with NOTICES

The Exchange is filing a proposal to are no substantive changes being
amend Exchange Rules 307 and 309 to terminate the SPY Pilot Program. If the
proposed to the SPY Pilot Program. The SPY Pilot Program is not extended or
extend the pilot program that eliminates Exchange affirms its consideration of
the position and exercise limits for adopted on a permanent basis by the
several factors that support the proposal expiration of the extended SPY Pilot
physically-settled options on the SPDR®
Program, the position limits for options
3 See Securities Exchange Act Release No. 75448
10 17 CFR 200.30–3(a)(12). overlying SPY would revert to limits in
(July 14, 2015), 80 FR 42856 (July 20, 2015) (SR–
1 15 U.S.C. 78s(b)(1).
MIAX–2015–46) (extending the SPY Pilot Program
2 17 CFR 240.19b–4. to July 12, 2016). 4 See Exhibit 3 attached hereto.

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Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Notices 42033

effect prior to the commencement of the III. Date of Effectiveness of the submission, all subsequent
SPY Pilot Program. Proposed Rule Change and Timing for amendments, all written statements
Additionally, the Exchange proposes Commission Action with respect to the proposed rule
to make non-substantive technical Because the foregoing proposed rule change that are filed with the
changes to the chart of securities in change does not: (i) Significantly affect Commission, and all written
Interpretations and Policies .01 of both the protection of investors or the public communications relating to the
Rule 307 and 309 to reflect the current interest; (ii) impose any significant proposed rule change between the
names of the underlying securities burden on competition; and (iii) become Commission and any person, other than
identified in the chart. operative for 30 days after the date of those that may be withheld from the
the filing, or such shorter time as the public in accordance with the
2. Statutory Basis provisions of 5 U.S.C. 552, will be
Commission may designate, it has
MIAX believes that its proposed rule become effective pursuant to 19(b)(3)(A) available for Web site viewing and
change is consistent with Section 6(b) of of the Act 7 and Rule 19b–4(f)(6) 8 printing in the Commission’s Public
the Act 5 in general, and furthers the thereunder. Reference Room, 100 F Street NE.,
objectives of Section 6(b)(5) of the Act 6 At any time within 60 days of the Washington, DC 20549 on official
in particular, in that it is designed to filing of the proposed rule change, the business days between the hours of
prevent fraudulent and manipulative Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of such
acts and practices, to promote just and temporarily suspend such rule change if filing also will be available for
equitable principles of trade, to foster it appears to the Commission that such inspection and copying at the principal
cooperation and coordination with action is necessary or appropriate in the office of the Exchange. All comments
persons engaged in facilitating public interest, for the protection of received will be posted without change;
transactions in securities, to remove investors, or otherwise in furtherance of the Commission does not edit personal
impediments to and perfect the the purposes of the Act. If the identifying information from
mechanisms of a free and open market Commission takes such action, the submissions. You should submit only
and a national market system and, in Commission shall institute proceedings information that you wish to make
general, to protect investors and the to determine whether the proposed rule available publicly. All submissions
public interest. should be approved or disapproved. should refer to File Number SR–MIAX–
Specifically, the Exchange believes 2016–17, and should be submitted on or
IV. Solicitation of Comments before July 19, 2016.
that extending the SPY Pilot Program
promotes just and equitable principles Interested persons are invited to For the Commission, by the Division of
of trade by permitting market submit written data, views, and Trading and Markets, pursuant to delegated
participants, including market makers, arguments concerning the foregoing, authority.9
institutional investors and retail including whether the proposed rule Brent J. Fields,
investors, to establish greater positions change is consistent with the Act. Secretary.
when pursuing their investment goals Comments may be submitted by any of [FR Doc. 2016–15170 Filed 6–27–16; 8:45 am]
and needs. The Exchange believes that the following methods: BILLING CODE 8011–01–P
the elimination of position limits for Electronic Comments
SPY options would not increase market
volatility or facilitate the ability to • Use the Commission’s Internet
comment form (http://www.sec.gov/ DEPARTMENT OF STATE
manipulate the market.
rules/sro.shtml); or [Public Notice: 9615]
B. Self-Regulatory Organization’s • Send an email to rule-comments@
Statement on Burden on Competition sec.gov. Please include File Number SR– Culturally Significant Objects Imported
MIAX–2016–17 on the subject line. for Exhibition Determinations: ‘‘Los
The Exchange does not believe that
Angeles to New York, The Dwan
the proposed rule change will impose Paper Comments Gallery 1959–1971’’ Exhibition
any burden on competition that is not • Send paper comments in triplicate
necessary or appropriate in furtherance to Brent J. Fields, Secretary, Securities SUMMARY: Notice is hereby given of the
of the purposes of the Act. The and Exchange Commission, 100 F Street following determinations: Pursuant to
proposed rule change is not designed to NE., Washington, DC 20549–1090. the authority vested in me by the Act of
address any aspect of competition, October 19, 1965 (79 Stat. 985; 22 U.S.C.
whether between the Exchange and its All submissions should refer to File
2459), E.O. 12047 of March 27, 1978, the
competitors, or among market Number SR–MIAX–2016–17. This file
Foreign Affairs Reform and
participants. Instead, the proposed rule number should be included on the
Restructuring Act of 1998 (112 Stat.
change is designed to allow the SPY subject line if email is used. To help the
2681, et seq.; 22 U.S.C. 6501 note, et
Pilot Program to continue as the Commission process and review your
seq.), Delegation of Authority No. 234 of
Exchange believes other competing comments more efficiently, please use
October 1, 1999, Delegation of Authority
options exchanges will also extend the only one method. The Commission will
No. 236–3 of August 28, 2000 (and, as
SPY Pilot Program for another year. post all comments on the Commission’s
appropriate, Delegation of Authority No.
Internet Web site (http://www.sec.gov/
C. Self-Regulatory Organization’s 257 of April 15, 2003), I hereby
rules/sro.shtml). Copies of the
determine that the objects to be
asabaliauskas on DSK3SPTVN1PROD with NOTICES

Statement on Comments on the
Proposed Rule Change Received From 7 15 U.S.C. 78s(b)(3)(A).
included in the exhibition ‘‘Los Angeles
Members, Participants, or Others 8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– to New York, The Dwan Gallery 1959–
4(f)(6) requires a self-regulatory organization to give 1971,’’ imported from abroad for
Written comments were neither the Commission written notice of its intent to file temporary exhibition within the United
solicited nor received. the proposed rule change at least five business days States, are of cultural significance. The
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the objects are imported pursuant to loan
5 15 U.S.C. 78f(b). Commission. The Exchange has satisfied this
6 15 U.S.C. 78f(b)(5). requirement. 9 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 17:49 Jun 27, 2016 Jkt 238001 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 E:\FR\FM\28JNN1.SGM 28JNN1
Document Created: 2016-06-28 00:53:47
Document Modified: 2016-06-28 00:53:47
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 42032