81 FR 80691 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 519A, Risk Protection Monitor
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 221 (November 16, 2016)
Federal Register Volume 81, Issue 221 (November 16, 2016)
| Page Range | 80691-80694 | |
| FR Document | 2016-27467 |
[Federal Register Volume 81, Number 221 (Wednesday, November 16, 2016)] [Notices] [Pages 80691-80694] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-27467] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79272; File No. SR-MIAX-2016-39] Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 519A, Risk Protection Monitor November 9, 2016. 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 October 31, 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 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. --------------------------------------------------------------------------- \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 519A, Risk Protection Monitor. 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 519A, Risk Protection Monitor, to mandate the use of the Risk Protection Monitor by Members, and to state clearly in the rule that Members may establish multiple RPM Settings, as defined below. Current Functionality Currently, using the Risk Protection Monitor, the Exchange's System \3\ maintains a counting program (``counting program'') for each participating Member that counts the number of orders entered and the number of contracts traded via an order entered by a Member on the Exchange within a specified time period that has been established by the Member (the ``specified time period''). The maximum duration of the specified time period is established by the Exchange and announced via a Regulatory Circular. The current maximum duration of the specified time period is a trading session. --------------------------------------------------------------------------- \3\ The term ``System'' means the automated trading system used by the Exchange for the trading of securities. See Exchange Rule 100. --------------------------------------------------------------------------- [[Page 80692]] Under the current rule, Members may establish an Allowable Order Rate \4\ and/or an Allowable Contract Execution Rate.\5\ When a Member's order is entered or when an execution of a Member's order occurs, the System will look back over the specified time period to determine whether the order entered or the execution that occurred triggers the Risk Protection Monitor.\6\ Members may establish whether the Risk Protection Monitor, when triggered, will (i) prevent the System from receiving any new orders in all series in all classes from the Member; or (ii) prevent the System from receiving any new orders in all series in all classes from the Member and cancel all existing Day orders in all series in all classes from the Member; or (iii) send a notification that the Risk Protection Monitor has been triggered without any further preventative or cancellation action by the System.\7\ --------------------------------------------------------------------------- \4\ The Allowable Order Rate is the number of orders entered during the specific time period that has been established by the Member. \5\ The Allowable Contract Execution Rate is the number of contracts executed during the specific time period that has been established by the Member. \6\ The Exchange notes that the specific time period does not need to be the same for both the Allowable Order Rate and Allowable Contract Execution Rate (i.e., there can be one specified time period for Allowable Order Rate and a different specified time period for Allowable Contract Execution Rate). In order to be consistent in the rule, under the proposal there can also be one Corresponding Specified Time Period (as described below) for both the Allowable Order Rate and a different Corresponding Specified Time Period for Allowable Contract Execution Rate. See proposed Rule 519A(b). \7\ See Exchange Rule 519A(a). As discussed below, the Risk Protection Monitor will not cancel any existing Good Til Cancelled (``GTC'') orders. GTC Orders will remain in the System available for trading when the Risk Protection Monitor is engaged. See Rule 519A, Interpretations and Policies .02. --------------------------------------------------------------------------- When engaged, the Risk Protection Monitor allows the Member to interact with existing orders entered prior to triggering the Risk Protection Monitor and allows the Member to continue to send cancel messages and receive reports of executions resulting from those orders. The Risk Protection Monitor shall remain engaged until the Member communicates with the Exchange staff to enable the acceptance of new orders.\8\ --------------------------------------------------------------------------- \8\ See current Exchange Rule 519A(b). The communication from the Member to Exchange staff can either be via email or phone. --------------------------------------------------------------------------- The Proposal First, the Exchange proposes to amend current Rule 519A(a) and (b) by consolidating the two paragraphs into one unified, cohesive paragraph describing the Risk Protection Monitor feature, its functionality, the ability of Members to establish and configure multiple Risk Protection Monitor settings, and the ability of Members to determine one of three alternative actions taken by the Risk Protection Monitor once it is triggered. Proposed Rule 519A will continue to include the basic description of the Risk Protection Monitor described above. The proposed amendments will reflect that the Risk Protection Monitor maintains one or more Member-configurable Allowable Order Rate settings and Allowable Contract Execution Rate settings (collectively, ``Risk Protection Monitor settings''). The Exchange believes that providing Members with the ability to establish multiple Risk Protection Monitor settings enhances Members' ability to account for sudden market movements due to extreme market volatility, and for heightened activity in one particular option or group of options in a particular industry or segment of the market due to news or other factors affecting the activity surrounding such option or options. Members may also simultaneously account for normal or even sluggish activity in less active options by establishing higher Risk Protection Monitor settings and a longer specified time period during which the Risk Protection Monitor engages the counting program. Amended Rule 519A(a), Voluntary Risk Protection Functionality,\9\ will also continue to include a choice of three possible outcomes for the Member once the System triggers the Risk Protection Monitor (i.e., when the Risk Protection Monitor setting has been reached during the specified time period), all of which are contained in the current rule. Specifically, once engaged, the Risk Protection Monitor will then, as determined by the Member: Automatically either (A) prevent the System from receiving any new orders in all series in all classes from the Member; (B) prevent the System from receiving any new orders in all series in all classes from the Member and cancel all existing orders with a time-in-force of Day in all series in all classes from the Member; or (C) send a notification to the Member without any further preventative or cancellation action by the System. As under the current rule when engaged, the Risk Protection Monitor will still allow the Member to interact with existing orders entered prior to exceeding the Allowable Order Rate setting or the Allowable Contract Execution Rate setting, including sending cancel order messages and receiving trade executions from those orders. The Risk Protection Monitor will remain engaged until the Member communicates with the Help Desk to enable the acceptance of new orders. --------------------------------------------------------------------------- \9\ For clarity and ease of reference, the Exchange is proposing to add the heading ``Voluntary Risk protection Functionality'' to new Rule 519A(a), and the heading ``Mandatory Participation'' to new Rule 519A(b). --------------------------------------------------------------------------- The Exchange believes that the ability of a Member to choose among three outcomes once the Risk Protection Monitor is triggered enhances the risk protections afforded to Members by the Exchange and thus provides a tool by which Members can further use the Risk Protection Monitor, once triggered, by tailoring the outcome to their acceptable risk tolerance levels. Mandatory Use of the Risk Monitor Mechanism In addition to the consolidation of current Rules 519A(a) and (b) into one paragraph (new paragraph (a)), the Exchange proposes to adopt new Rule 519A(b), Mandatory Participation, to state that Members must establish at least one Allowable Order Rate setting with a corresponding specified time period of not less than one second, and not to exceed ten seconds, as established by the Exchange and communicated to Members via Regulatory Circular (a ``Corresponding Specified Time Period'') and at least one Allowable Contract Execution Rate setting (with a Corresponding Specified Time Period). The Exchange believes that establishing the Corresponding Specified Time Period within these parameters will provide minimum and maximum guidelines for Members, making their required use of the Risk Protection Monitor more efficient and streamlined. The Risk Protection Monitor settings must be configured by the Member such that the Risk Protection Monitor, when triggered, will perform one of two steps set forth in proposed Rule 519A(a): Either (A) prevent the System from receiving any new orders in all series in all classes from the Member; or (B) prevent the System from receiving any new orders in all series in all classes from the Member and cancel all existing orders with a time-in-force of Day in all series in all classes from the Member. Under the mandatory provision of proposed Rule 519A(b), the simple Member notification option included in section (C) of proposed Rule 519A(a) would not be available. The purpose of this proposed provision is to mandate the use of the Risk Protection Monitor so that Members and the investing public are assured that the Risk Protection Monitor is active for all orders submitted to the [[Page 80693]] Exchange. The Exchange notes that other exchanges have similar risk protection tools and one has mandated a Member's use of similar functionality.\10\ --------------------------------------------------------------------------- \10\ International Securities Exchange LLC (``ISE'') Rule 714(d) mandates the use of its Market Wide Risk Protection tool by establishing default values that apply to members that do not submit the required parameters, but does not establish exchange-mandated minimum or maximum parameters. BATS BZX Exchange (``BZX'') Rule 21.16(b)(ii) lists a succession of ``Specified Engagement Triggers'' that may be set optionally by the BATS User, and thus does not mandate the use of its Risk Monitor Mechanism. --------------------------------------------------------------------------- Proposed Rule 519A(b) would also state that Members may establish additional Allowable Order Rate settings and additional Allowable Contract Execution Rate settings, and any such additional settings may be configured to perform the step set forth in either (A), (B), or (C) of Rule 519(a) as described above, upon engagement of the Risk Protection Monitor. As a technical matter, the Exchange proposes to amend Rule 519A, Interpretations and Policies .01(c), to make it consistent with the proposed amended Rule. The current Rule states that the Risk Protection Monitor will prevent the System from receiving any new orders in all series in all classes from the Member and, if designated by the Member's instructions, cancel all existing Day orders in all series in all classes from the Member. ``Day orders'' are not defined in the Exchange's rules and therefore the Exchange proposes to replace the term ``Day orders'' with ``orders with a time-in-force of Day.'' The purpose of the proposed rule change is to enhance the risk protections afforded to Members by the Exchange by mandating use of the RPM and by permitting Members to establish multiple RPM Settings which can be tailored to the Member's acceptable risk tolerance levels. The Exchange anticipates that the proposed new Risk Protection Monitor functionality will be deployed on the Exchange beginning November 7, 2016. 2. Statutory Basis MIAX believes that its proposed rule change is consistent with Section 6(b) of the Act \11\ in general, and furthers the objectives of Section 6(b)(5) of the Act \12\ 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. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78f(b). \12\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that Members will benefit from the proposed mandatory use of the Risk Protection Monitor, coupled with the ability of members to tailor their use of the Risk Protection Monitor to their risk tolerance levels. Members are vulnerable to the risk from system or other error or a market event, that may cause them to send a large number of orders or receive multiple, automatic executions before they can adjust their order exposure in the market. Without adequate risk management tools, such as the Risk Protection Monitor, Members could reduce the amount of order flow and liquidity that they provide to the market. Such actions may undermine the quality of the markets available to customers and other market participants. Accordingly, the proposed amendments to the Risk Protection Monitor, especially its mandated use, should instill additional confidence in Members that submit orders to the Exchange that their risk tolerance levels are protected, and thus should encourage such Members to submit additional order flow and liquidity to the Exchange with the understanding that they must have this protection, thereby removing impediments to and perfecting the mechanisms of a free and open market and a national market system and, in general, protecting investors and the public interest. In addition, providing Members with the ability to establish multiple RPM settings provides Members with more tools to use in managing their specific risks based on their individual risk tolerance levels. This facilitates transactions in securities because, as noted above, the Members will have more confidence that protections are in place that reduce the risks from potential system errors and market events. As a result, the modified functionality, together with the mandated use of the Risk Protection Monitor, has the potential to promote just and equitable principles of trade. 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. On the contrary, the Exchange believes that the amendments to the Risk Protection Monitor help promote competition by enabling Members to trade more aggressively on the Exchange, with the understanding that there are multiple, configurable risk management tools in place in the System. The Exchange believes the proposed changes will not impose any burden on intra- market competition because the use of the Risk Protection Monitor is now required of all Members. The Exchange further believes that the proposed mandatory risk protections should promote inter-market competition, and result in more competitive order flow to the Exchange by protecting market participants from system errors or market events that may cause them to send a large number of orders or receive multiple, automatic executions before they can adjust their order exposure in the market. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, it has become effective pursuant to 19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) \14\ thereunder. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78s(b)(3)(A). \14\ 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. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative prior to 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) \15\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. In its filing with the Commission, the Exchange requests that the Commission waive the 30-day operative delay. The Exchange requests waiver of the 30-day operative delay so that Members may benefit from the proposed new functionality and so that the Exchange is able to deploy the functionality on its scheduled deployment date of November 7, 2016. For these reasons, the Commission believes that waiver of [[Page 80694]] the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission designates the proposed rule change to be operative upon filing.\16\ --------------------------------------------------------------------------- \15\ 17 CFR 240.19b-4(f)(6)(iii). \16\ For purposes only of waiving the 30-day operative delay, the Commission also has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- 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 CommentsUse 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-2016-39 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-2016-39. 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-2016-39 and should be submitted on or before December 7, 2016. --------------------------------------------------------------------------- \17\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\17\ Brent J. Fields, Secretary. [FR Doc. 2016-27467 Filed 11-15-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 221 / Wednesday, November 16, 2016 / Notices 80691
C. Self-Regulatory Organization’s communications relating to the I. Self-Regulatory Organization’s
Statement on Comments on the proposed rule change between the Statement of the Terms of Substance of
Proposed Rule Change Received From Commission and any person, other than the Proposed Rule Change
Members, Participants, or Others those that may be withheld from the
public in accordance with the The Exchange is filing a proposal to
The Exchange neither solicited nor
provisions of 5 U.S.C. 552, will be amend Exchange Rule 519A, Risk
received comments on the proposed
available for Web site viewing and Protection Monitor.
rule change.
printing in the Commission’s Public The text of the proposed rule change
III. Date of Effectiveness of the is available on the Exchange’s Web site
Reference Room, 100 F Street NE.,
Proposed Rule Change and Timing for at http://www.miaxoptions.com/filter/
Washington, DC 20549, on official
Commission Action
business days between the hours of wotitle/rule_filing, at MIAX’s principal
The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of such office, and at the Commission’s Public
effective pursuant to Section 19(b)(3)(A) filing also will be available for Reference Room.
of the Act 11 and paragraph (f) of Rule inspection and copying at the principal
19b–4 12 thereunder. At any time within II. Self-Regulatory Organization’s
office of the Exchange. All comments Statement of the Purpose of, and
60 days of the filing of the proposed rule received will be posted without change;
change, the Commission summarily may Statutory Basis for, the Proposed Rule
the Commission does not edit personal Change
temporarily suspend such rule change if
identifying information from
it appears to the Commission that such
action is necessary or appropriate in the submissions. You should submit only In its filing with the Commission, the
public interest, for the protection of information that you wish to make Exchange included statements
investors, or otherwise in furtherance of available publicly. All submissions concerning the purpose of and basis for
the purposes of the Act. If the should referto File Number SR–CBOE– the proposed rule change and discussed
Commission takes such action, the 2016–075 and should be submitted on any comments it received on the
Commission will institute proceedings or before December 7, 2016. proposed rule change. The text of these
to determine whether the proposed rule For the Commission, by the Division of statements may be examined at the
change should be approved or Trading and Markets, pursuant to delegated places specified in Item IV below. The
disapproved. authority.13 Exchange has prepared summaries, set
Brent J. Fields,
forth in sections A, B, and C below, of
IV. Solicitation of Comments the most significant aspects of such
Interested persons are invited to Secretary.
statements.
submit written data, views, and [FR Doc. 2016–27471 Filed 11–15–16; 8:45 am]
arguments concerning the foregoing, BILLING CODE 8011–01–P A. Self-Regulatory Organization’s
including whether the proposed rule Statement of the Purpose of, and
change is consistent with the Act. Statutory Basis for, the Proposed Rule
Comments may be submitted by any of SECURITIES AND EXCHANGE Change
the following methods: COMMISSION 1. Purpose
Electronic Comments
[Release No. 34–79272; File No. SR–MIAX– The Exchange proposes to amend
• Use the Commission’s Internet 2016–39] Exchange Rule 519A, Risk Protection
comment form (http://www.sec.gov/ Monitor, to mandate the use of the Risk
rules/sro.shtml); or Self-Regulatory Organizations; Miami Protection Monitor by Members, and to
• Send an email to rule-comments@ International Securities Exchange LLC; state clearly in the rule that Members
sec.gov. Please include File Number SR– Notice of Filing and Immediate may establish multiple RPM Settings, as
CBOE–2016–075 on the subject line. Effectiveness of a Proposed Rule defined below.
Paper Comments Change To Amend Exchange Rule
519A, Risk Protection Monitor Current Functionality
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities November 9, 2016. Currently, using the Risk Protection
and Exchange Commission, 100 F Street Monitor, the Exchange’s System 3
NE., Washington, DC 20549. Pursuant to the provisions of Section maintains a counting program
All submissions should refer to File 19(b)(1) of the Securities Exchange Act (‘‘counting program’’) for each
Number SR–CBOE–2016–075. This file of 1934 (‘‘Act’’) 1 and Rule 19b–4 participating Member that counts the
number should be included on the thereunder,2 notice is hereby given that number of orders entered and the
subject line if email is used. To help the on October 31, 2016, Miami number of contracts traded via an order
Commission process and review your International Securities Exchange LLC entered by a Member on the Exchange
comments more efficiently, please use (‘‘MIAX’’ or ‘‘Exchange’’) filed with the within a specified time period that has
only one method. The Commission will Securities and Exchange Commission been established by the Member (the
post all comments on the Commission’s (‘‘Commission’’) a proposed rule change ‘‘specified time period’’). The maximum
Internet Web site (http://www.sec.gov/ as described in Items I and II below, duration of the specified time period is
which Items have been prepared by the
asabaliauskas on DSK3SPTVN1PROD with NOTICES
rules/sro.shtml). Copies of the established by the Exchange and
submission, all subsequent Exchange. The Commission is announced via a Regulatory Circular.
amendments, all written statements publishing this notice to solicit The current maximum duration of the
with respect to the proposed rule comments on the proposed rule change specified time period is a trading
change that are filed with the from interested persons. session.
Commission, and all written
13 17 CFR 200.30–3(a)(12). 3 The term ‘‘System’’ means the automated
11 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1). trading system used by the Exchange for the trading
12 17 CFR 240.19b–4(f). 2 17 CFR 240.19b–4. of securities. See Exchange Rule 100.
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![80694 Federal Register / Vol. 81, No. 221 / Wednesday, November 16, 2016 / Notices
the 30-day operative delay is consistent printing in the Commission’s Public proceedings to determine whether to
with the protection of investors and the Reference Room, 100 F Street NE., disapprove the proposed rule change.5
public interest. Therefore, the Washington, DC 20549, on official On November 7, 2016, the Exchange
Commission designates the proposed business days between the hours of filed Partial Amendment No. 1 to the
rule change to be operative upon 10:00 a.m. and 3:00 p.m. Copies of the proposed rule change (‘‘Partial
filing.16 filing also will be available for Amendment No. 1’’).6 On November 8,
At any time within 60 days of the inspection and copying at the principal 2016, the Exchange filed Partial
filing of the proposed rule change, the office of the Exchange. All comments Amendment No. 2 to the proposed rule
Commission summarily may received will be posted without change; change, which superseded Partial
temporarily suspend such rule change if the Commission does not edit personal Amendment No. 1 (‘‘Partial Amendment
it appears to the Commission that such identifying information from No. 2’’).7 The Commission is publishing
action is necessary or appropriate in the submissions. You should submit only this order to approve the proposed rule
public interest, for the protection of information that you wish to make change, as modified by Partial
investors, or otherwise in furtherance of available publicly. All submissions Amendment No. 2.
the purposes of the Act. If the should refer to File Number SR–MIAX–
Commission takes such action, the II. Description
2016–39 and should be submitted on or
Commission shall institute proceedings before December 7, 2016. The Exchange has proposed to
to determine whether the proposed rule reorganize and amend current Rule
For the Commission, by the Division of
should be approved or disapproved. Trading and Markets, pursuant to delegated
1017, which describes the opening of
authority.17 trading in option series on the
IV. Solicitation of Comments
Brent J. Fields,
Exchange.8
Interested persons are invited to
submit written data, views, and Secretary. A. Definitions
arguments concerning the foregoing, [FR Doc. 2016–27467 Filed 11–15–16; 8:45 am] The Exchange proposes to revise the
including whether the proposed rule BILLING CODE 8011–01–P introductory language to Rule 1017(a) to
change is consistent with the Act. state that it would conduct an electronic
Comments may be submitted by any of opening for all option series traded on
the following methods: SECURITIES AND EXCHANGE Phlx using its trading system
COMMISSION (‘‘system’’).9 In addition, the Exchange
Electronic Comments
[Release No. 34–79274; File No. SR–Phlx– proposes to revise Phlx Rule 1017(a) to
• Use the Commission’s Internet 2016–79] define several of the terms used in
comment form (http://www.sec.gov/ proposed Phlx Rule 1017. The Exchange
rules/sro.shtml); or Self-Regulatory Organizations; proposes to define ‘‘Opening Process’’
• Send an email to rule-comments@ NASDAQ PHLX LLC; Notice of Filing of by cross-referencing Rule 1017(d),10
sec.gov. Please include File Number SR– Partial Amendment No. 2 and Order ‘‘Opening Price’’ by cross-referencing
MIAX–2016–39 on the subject line. Granting Approval of a Proposed Rule
Paper Comments Change, as Modified by Partial 5 See Securities Exchange Act Release No. 79024,
Amendment No. 2, To Amend PHLX 81 FR 69892 (October 7, 2016). The Commission
• Send paper comments in triplicate designated a longer period within which to take
Rule 1017, Openings in Options
to Secretary, Securities and Exchange action on the proposed rule change and designated
Commission, 100 F Street NE., November 9, 2016. November 20, 2016, as the date by which it should
approve, disapprove, or institute proceedings to
Washington, DC 20549–1090. determine whether to disapprove the proposed rule
I. Introduction
All submissions should refer to File change.
Number SR–MIAX–2016–39. This file On August 4, 2016, NASDAQ PHLX 6 Partial Amendment No. 1 is available at: https://
number should be included on the LLC (‘‘Phlx’’ or ‘‘Exchange’’) filed with www.sec.gov/comments/sr-phlx-2016-79/
the Securities and Exchange phlx201679-1.pdf.
subject line if email is used. To help the 7 In Partial Amendment No. 2, Phlx amends its
Commission process and review your Commission (the ‘‘Commission’’), proposed rule change to: (1) Specify that references
comments more efficiently, please use pursuant to Section 19(b)(1) of the to ‘‘quotes’’ refer to two-sided quotes; (2) provide
only one method. The Commission will Securities Exchange Act of 1934 (the additional rationale for the OQR and for boundaries
‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a that protect the Opening Price from trading through
post all comments on the Commission’s the limit price(s) of interest within OQR, which is
Internet Web site (http://www.sec.gov/ proposed rule change to amend its rules unable to fully execute at the Opening Price; (3)
rules/sro.shtml). Copies of the governing the opening of trading in state that in the event the Exchange routes to away
submission, all subsequent options series on the Exchange. The markets and uses the away market price as the
proposed rule change was published for Opening Price, the Exchange will enter on its order
amendments, all written statements book any unfilled interest at a price equal to or
with respect to the proposed rule comment in the Federal Register on inferior than the Opening Price and the Exchange
change that are filed with the August 22, 2016.3 The Commission would route orders that would execute through the
Commission, and all written received no comment letters regarding Opening Price; (4) explain that each Imbalance
the proposed rule change. On October 3, Message would be set for the same length of time;
communications relating to the (5) include additional rationale for proposed
proposed rule change between the 2016, pursuant to Section 19(b)(2) of the changes to routing during the Opening Process; (6)
Commission and any person, other than Act,4 the Commission designated a provide examples for how certain parts of the
those that may be withheld from the longer period within which to approve Opening Process operate; and (7) revise the filing
asabaliauskas on DSK3SPTVN1PROD with NOTICES
the proposed rule change, disapprove and the Exhibit 5 to state that the Exchange may
public in accordance with the open with the PBBO only if there are no routable
provisions of 5 U.S.C. 552, will be the proposed rule change, or institute orders locking the ABBO. Partial Amendment No.
available for Web site viewing and 2 is available at: https://www.sec.gov/comments/sr-
17 17 CFR 200.30–3(a)(12). phlx-2016-79/phlx201679-2.pdf.
1 15 U.S.C. 78s(b)(1). 8 For a complete description on the proposal,
16 For purposes only of waiving the 30-day
2 17 CFR 240.19b–4. please refer to the Notice, supra note 3 and Partial
operative delay, the Commission also has
considered the proposed rule’s impact on 3 See Securities Exchange Act Release No. 78588 Amendment No. 2, supra note 7.
efficiency, competition, and capital formation. See (August 16, 2016), 81 FR 56733 (‘‘Notice’’). 9 See Phlx Rule 1017(a).
15 U.S.C. 78c(f). 4 15 U.S.C. 78s(b)(2). 10 See Phlx Rule 1017(a)(i).
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Document Created: 2016-11-16 00:57:51
Document Modified: 2016-11-16 00:57:51
| 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 80691 |
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