82 FR 21288 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing of a Proposed Rule Change To Amend MIAX Options Rule 515A, MIAX Price Improvement Mechanism (“PRIME”) and PRIME Solicitation Mechanism
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 86 (May 5, 2017)
Federal Register Volume 82, Issue 86 (May 5, 2017)
| Page Range | 21288-21291 | |
| FR Document | 2017-09062 |
[Federal Register Volume 82, Number 86 (Friday, May 5, 2017)] [Notices] [Pages 21288-21291] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-09062] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80570; File No. SR-MIAX-2017-16] Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing of a Proposed Rule Change To Amend MIAX Options Rule 515A, MIAX Price Improvement Mechanism (``PRIME'') and PRIME Solicitation Mechanism May 1, 2017. 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 April 25, 2017, Miami International Securities Exchange LLC (``MIAX Options'' 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 515A, MIAX Price Improvement Mechanism (``PRIME'') and PRIME Solicitation Mechanism. The text of the proposed rule change is available on the Exchange's Web site at http://www.miaxoptions.com/rule-filings, 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 Rule 515A, MIAX Price Improvement Mechanism (``PRIME'') and PRIME Solicitation Mechanism, to amend the duration of a PRIME Auction. PRIME is a process by which a Member \3\ may electronically submit for execution (``Auction'') an order \4\ it represents as agent (``Agency Order'') against principal interest, and/ or an Agency Order against solicited interest (``Solicitation Auction''). When the Exchange receives a properly designated Agency Order for auction processing, a Request for Responses (``RFR'') detailing the option, side, size, and initiating price is sent to all subscribers of the Exchange's data feeds. Currently, the Auction and Solicitation Auction period lasts for 500 milliseconds, unless it is concluded early.\5\ The Exchange proposes to amend Rule 515A(a)(2)(i)(C) so that the duration of the Auction and Solicitation Auction shall be a time period designated by the Exchange, which shall be no less than 100 milliseconds and no more than 1 second, consistent with the rule of other exchanges, such as the International Securities Exchange (``ISE''), NASDAQ BX (``BX''), NASDAQ PHLX (``PHLX''), and Chicago Board Options Exchange (``CBOE'').\6\ When approving the change [[Page 21289]] to exposure periods in these mechanisms, the Securities and Exchange Commission (``SEC'') concluded that reducing the time periods was consistent with the Securities Exchange Act of 1934 (the ``Act'').\7\ --------------------------------------------------------------------------- \3\ The term ``Member'' means an individual or organization approved to exercise the trading rights associated with a Trading Permit. Members are deemed ``members'' under the Exchange Act. See Exchange Rule 100. \4\ The term ``order'' means a firm commitment to buy or sell option contracts. See Exchange Rule 100. \5\ A PRIME and PRIME Solicitation Auction will conclude at the sooner of (1) Upon receipt by the System of an unrelated order (in the same option as the Agency Order) on the opposite side of the market from the RFR responses, that is marketable against either the NBBO, the initiating price, or the RFR responses; (2) Upon receipt by the System of an unrelated order (in the same option as the Agency Order) on the same side of the market as the RFR responses, that is marketable against the NBBO; (3) Upon receipt by the System of an unrelated limit order (in the same option as the Agency Order) on the opposite of the market from the Agency Order that improves any RFR response; (4) Any time an RFR response matches the NBBO on the opposite side of the market from the RFR responses; (5) Any time there is a quote lock in the subject option on the Exchange pursuant to Rule 1402; or (6) Any time there is a trading halt in the option on the Exchange. See Exchange Rule 515A. \6\ See Securities Exchange Act Release Nos. 79733 (January 4, 2017), 82 FR 3055 (January 10, 2017) (SR-ISE-2016-26); 76301 (October 29, 2015), 80 FR 68347 (November 4, 2015) (SR-BX-2015-032); 77557 (April 7, 2016), 81 FR 21935 (April 13, 2016) (SR-PHLX-2016- 40); and 80421 (April 10, 2017), 82 FR 18048 (April 14, 2017) (SR- CBOE-2017-029). The Commission notes that CBOE's proposed rule change to amend its auction response period was published in the Federal Register on April 14, 2017 and is subject to a public comment period expiring on May 5, 2017. \7\ Id. --------------------------------------------------------------------------- The Exchange believes that moving to a range structure provides the Exchange with greater flexibility in establishing the optimal duration for Auctions and Solicitation Auctions. The Exchange believes that permitting a shorter duration of as low as 100 milliseconds will reduce market risk for all Members executing trades on the Exchange via the PRIME and PRIME Solicitation Mechanism. Initiating participants are required to guarantee an execution at the NBBO \8\ or at a better price, and are subject to market risk as their PRIME order is exposed to other Members of the Exchange. While other participants are also subject to market risk, those providing responses may cancel their responses. The Exchange believes that the initiating participant plays a critical role in the Auction and Solicitation Auction processes. Their willingness to guarantee the orders entered into the PRIME and PRIME Solicitation Mechanism an execution at the NBBO or, in some cases, a better price, is the catalyst for an order gaining the opportunity for price improvement. The Exchange believes that allowing an Auction period of no less than 100 milliseconds and no more than 1 second will benefit Members utilizing the PRIME and PRIME Solicitation Mechanism. The Exchange believes it is in these Members' best interests to minimize the Auction and Solicitation Auction duration while continuing to allow Members adequate time to respond. The Exchange notes the Commission previously approved other exchanges' rules that provide for an auction response time as low as 100 milliseconds \9\ and that the Exchange is not proposing to go lower than the lowest previously approved timer range. --------------------------------------------------------------------------- \8\ The term ``NBBO'' means the national best bid or offer as calculated by the Exchange based on market information received by the Exchange from OPRA. See Exchange Rule 100. \9\ See supra note 6. --------------------------------------------------------------------------- Accordingly, the Exchange proposes to amend Rule 515A(b)(2)(i)(C) to remove the reference to the duration of the current timer setting. Currently the rule states that, ``[m]embers may submit responses to the RFR (specifying prices and sizes) during the response period (which shall be 500 milliseconds).'' The Exchange proposes to replace this sentence with the proposed language used in 515A(a)(2)(i)(C) which provides that ``[t]he RFR will last for a period of time, as determined by the Exchange and announced through a Regulatory Circular. The RFR will be no less than 100 milliseconds and no more than 1 second.'' The Exchange does not believe that requiring the Auction and Solicitation Auction to run for 500 milliseconds is necessary in today's market where, generally, Members' systems have the capability to respond within 100 milliseconds or less. As such, reducing the response time in the PRIME and PRIME Solicitation Mechanism is appropriate as Members no longer need up to 500 milliseconds to respond to an Auction or Solicitation Auction. Reducing the response time will allow Members the opportunity to seek out liquidity in an expedient manner that is consistent with today's system capabilities. The Exchange's Members operate electronic systems that enable them to react and respond to orders in a meaningful way in fractions of a second. The Exchange anticipates that its Members will continue to compete within the proposed response times designated by the Exchange. In particular, the Exchange believes that the proposed response times-- which will be no less than 100 milliseconds and no more than 1 second-- will continue to provide Members with sufficient time to respond to, compete for, and provide price improvement for orders, and will provide investors and other market participants with more timely executions, and reduce their market risk. Reducing the duration of Auctions and Solicitation Auctions from 500 milliseconds to as low as 100 milliseconds will benefit Members trading in the PRIME and PRIME Solicitation Mechanism. The Exchange believes that it is in these Members' best interest to minimize the response time while continuing to allow Members adequate time to electronically respond. Both the order being exposed and the Members' responses are subject to market risk during the Auction or Solicitation Auction. While a limited number of Members wait to respond until later in the Auction or Solicitation Auction, presumably to minimize their market risk, the majority of Members respond within the first 100 milliseconds. The Exchange believes that a response time as low as 100 milliseconds will continue to provide market participants with sufficient time to respond, compete, and provide price improvement for orders and will provide investors and other market participants with more timely executions, thereby reducing their market risk. To substantiate that Members can receive, process, and communicate a response to an auction broadcast within 100 milliseconds, the Exchange surveyed all Members that responded to an auction broadcast in the period beginning November 2016 and ending January 2017 (the ``review period''). The Exchange received responses from all of the Members surveyed, and each Member confirmed that they can receive, process, and communicate a response back to the Exchange within 100 milliseconds. Also, in consideration with this proposed rule change, the Exchange reviewed all responses received in PRIME and PRIME Solicitation Auctions from its Members for the review period. During the review period, on average, approximately 60% of responses were submitted within the first 50 milliseconds, and approximately 90% of responses were submitted within 100 milliseconds.\10\ --------------------------------------------------------------------------- \10\ The Exchange notes that the average percentages for responses within 50 milliseconds and 100 milliseconds were 61.03% and 88.19% respectively. --------------------------------------------------------------------------- Accordingly, the Exchange believes that a response time as low as 100 milliseconds will continue to provide Members with sufficient time to respond to, compete for, and provide price improvement for orders, and will provide investors and other market participants with more timely executions, and reduce their market risk. The Exchange also believes it is likely that the number of PRIME transactions will increase, thereby providing customers a greater opportunity to benefit from price improvement. The Exchange believes that the information outlined above regarding price improving transactions in the PRIME and PRIME Solicitation Mechanism provides substantial support for its assertion that reducing the response time from 500 milliseconds to as low as 100 milliseconds will continue to provide Members with sufficient time to ensure competition for orders entered into the PRIME and PRIME Solicitation Mechanism, and could provide customer orders with additional opportunities for price improvement. With regard to the impact of this proposal on system capacity, the Exchange has analyzed its capacity and [[Page 21290]] represents that it has the necessary systems capacity to handle the potential additional traffic associated with the additional transactions that may occur with the implementation of the proposed reduction in the response time duration to no less than 100 milliseconds. Additionally, the Exchange represents that its System will be able to sufficiently maintain an audit trail for order and trade information with the reduction in the response timer. 2. Statutory Basis MIAX Options 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). --------------------------------------------------------------------------- In particular, the proposed rule change will provide investors with more timely execution of their option orders, while ensuring that there is an adequate exposure of orders in the mechanisms. Additionally, the proposed change will allow more investors the opportunity to receive price improvement through the PRIME and PRIME Solicitation Mechanism and will reduce market risk for Members using these mechanisms. Finally, as mentioned above, other exchanges such as ISE, BX, PHLX, and CBOE [sic],\13\ have already amended their rules to permit response times consistent with the instant proposal--i.e., no less than 100 milliseconds and no more than 1 second.\14\ As such, the Exchange believes the proposed rule change would help perfect the mechanism for a free and open national market system, and generally help protect investors and the public's interest. --------------------------------------------------------------------------- \13\ The Commission notes that CBOE's proposed rule change to amend its auction response period was published in the Federal Register on April 14, 2017 and is subject to a public comment period expiring on May 5, 2017. \14\ See supra note 6. --------------------------------------------------------------------------- The Exchange believes the proposed rule change is not unfairly discriminatory because the response time duration would be the same for all Members. All Members in the PRIME and PRIME Solicitation Mechanism have today, and will continue to have, an equal opportunity to receive the broadcast and respond with their best prices during the auction. Additionally, the Exchange believes the reduction of the response time for an auction reduces the market risk for all Members. The reduction of the time period reduces the market risk for the initiating member as well as any Members providing orders in response to an RFR. 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 to provide the Exchange flexibility in determining potentially shorter durations for Auctions and Solicitation Auctions does not impose an undue burden on intra-market competition as the Exchange believes that allowing for an auction period of no less than 100 milliseconds and no more than 1 second will benefit Members utilizing the PRIME and PRIME Solicitation Mechanism. The Exchange believes it is in these Members' best interest to minimize the Auction and Solicitation Auction duration while continuing to allow Members adequate time to respond electronically. The proposed rule allows Members to respond quickly at the most favorable price while reducing the risk that the market will move against the response. The Exchange believes that its Members will be able to compete within a timer range of no less than 100 milliseconds and no more than 1 second, and that any specific duration within this range is a sufficient amount of time to respond to, compete for, and provide price improvement for orders, and will provide investors and other market participants more timely executions, and reduce their market risk. The Exchange does not believe its proposed rule change will impose an undue burden on inter-market competition as the Exchange notes other exchanges offer similar functionality with similar auction duration lengths.\15\ --------------------------------------------------------------------------- \15\ See NASDAQ BX Rules, Chapter VI, Section 9(ii)(A)(3), CBOE Rule 6.74A and 6.74B, ISE Rule 723(c)(1), and NASDAQ PHLX Rule 1080(n)(ii)(A)(4). The Commission notes that CBOE's proposed rule change to amend its auction response period was published in the Federal Register on April 14, 2017 and is subject to a public comment period expiring on May 5, 2017. --------------------------------------------------------------------------- For all the reasons stated, the Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, and believes the proposed change will enhance competition. 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 Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission shall: (a) By order approve or disapprove such proposed rule change, or (b) institute proceedings to determine whether the proposed rule change should be 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-2017-16 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-2017-16. 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 [[Page 21291]] 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-2017-16 and should be submitted on or before May 26, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ Eduardo A. Aleman, Assistant Secretary. --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2017-09062 Filed 5-4-17; 8:45 am] BILLING CODE 8011-01-P
![21288 Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices
2017.3 The Commission received no SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
comments regarding the proposed COMMISSION Statement of the Purpose of, and
changes. Statutory Basis for, the Proposed Rule
Section 19(b)(2) of the Act provides [Release No. 34–80570; File No. SR–MIAX– Change
that within 45 days of the publication of 2017–16] 1. Purpose
the notice of the filing or a proposed The Exchange proposes to amend
rule change, or within such longer Self-Regulatory Organizations; Miami
Rule 515A, MIAX Price Improvement
period up to 90 days as the Commission International Securities Exchange LLC;
Mechanism (‘‘PRIME’’) and PRIME
may designate if it finds such longer Notice of Filing of a Proposed Rule
Solicitation Mechanism, to amend the
period to be appropriate and publishes Change To Amend MIAX Options Rule
duration of a PRIME Auction. PRIME is
its reasons for so finding, or as to which 515A, MIAX Price Improvement a process by which a Member 3 may
the self-regulatory organization Mechanism (‘‘PRIME’’) and PRIME electronically submit for execution
consents, the Commission shall either Solicitation Mechanism (‘‘Auction’’) an order 4 it represents as
approve the proposed rule change, May 1, 2017. agent (‘‘Agency Order’’) against
disapprove the proposed rule change, or principal interest, and/or an Agency
institute proceedings to determine Pursuant to the provisions of Section Order against solicited interest
whether the proposed rule change 19(b)(1) of the Securities Exchange Act (‘‘Solicitation Auction’’). When the
should be disapproved.4 The 45th day of 1934 (‘‘Act’’) 1 and Rule 19b–4 Exchange receives a properly designated
from the publication of the Notice is thereunder,2 notice is hereby given that Agency Order for auction processing, a
May 7, 2017. on April 25, 2017, Miami International Request for Responses (‘‘RFR’’) detailing
Securities Exchange LLC (‘‘MIAX the option, side, size, and initiating
The Commission is extending the 45- price is sent to all subscribers of the
Options’’ or ‘‘Exchange’’) filed with the
day time period for Commission action Exchange’s data feeds. Currently, the
Securities and Exchange Commission
on the proposed rule change. ICE Clear Auction and Solicitation Auction period
(‘‘Commission’’) a proposed rule change
Europe proposes to revise its CDS End- lasts for 500 milliseconds, unless it is
as described in Items I, II, and III below,
of-Day Price Discovery Policy to concluded early.5 The Exchange
which Items have been prepared by the
implement a new Clearing Member proposes to amend Rule 515A(a)(2)(i)(C)
Exchange. The Commission is
price submission process to remove the so that the duration of the Auction and
publishing this notice to solicit
intermediary agent through which Solicitation Auction shall be a time
comments on the proposed rule change
Clearing Members currently submit period designated by the Exchange,
from interested persons.
required prices, and replace it with a which shall be no less than 100
process through which Clearing I. Self-Regulatory Organization’s milliseconds and no more than 1
Members submit prices directly to ICE Statement of the Terms of Substance of second, consistent with the rule of other
Clear Europe. The Commission finds the Proposed Rule Change exchanges, such as the International
that it is appropriate to designate a Securities Exchange (‘‘ISE’’), NASDAQ
longer period within which to take The Exchange is filing a proposal to BX (‘‘BX’’), NASDAQ PHLX (‘‘PHLX’’),
action on the proposed rule change so amend Exchange Rule 515A, MIAX and Chicago Board Options Exchange
that it has sufficient time to consider Price Improvement Mechanism (‘‘CBOE’’).6 When approving the change
ICE Clear Europe’s proposed rule (‘‘PRIME’’) and PRIME Solicitation
change and the associated operational Mechanism. 3 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
risks. The text of the proposed rule change associated with a Trading Permit. Members are
Accordingly, the Commission, is available on the Exchange’s Web site deemed ‘‘members’’ under the Exchange Act. See
at http://www.miaxoptions.com/rule- Exchange Rule 100.
pursuant to Section 19(b)(2) of the Act, 4 The term ‘‘order’’ means a firm commitment to
extends the period by which the filings, at MIAX’s principal office, and
buy or sell option contracts. See Exchange Rule 100.
Commission shall either approve or at the Commission’s Public Reference 5 A PRIME and PRIME Solicitation Auction will
disapprove, or institute proceedings to Room. conclude at the sooner of (1) Upon receipt by the
System of an unrelated order (in the same option
determine whether to disapprove, the II. Self-Regulatory Organization’s as the Agency Order) on the opposite side of the
proposed rule change (File No. SR– Statement of the Purpose of, and market from the RFR responses, that is marketable
ICEEU–2017–003) to no later than June against either the NBBO, the initiating price, or the
Statutory Basis for, the Proposed Rule RFR responses; (2) Upon receipt by the System of
21, 2017. Change an unrelated order (in the same option as the
For the Commission by the Division of Agency Order) on the same side of the market as
In its filing with the Commission, the the RFR responses, that is marketable against the
Trading and Markets, pursuant to delegated NBBO; (3) Upon receipt by the System of an
authority.5
Exchange included statements
unrelated limit order (in the same option as the
concerning the purpose of and basis for Agency Order) on the opposite of the market from
Eduardo A. Aleman,
the proposed rule change and discussed the Agency Order that improves any RFR response;
Assistant Secretary. any comments it received on the (4) Any time an RFR response matches the NBBO
[FR Doc. 2017–09060 Filed 5–4–17; 8:45 am] proposed rule change. The text of these on the opposite side of the market from the RFR
responses; (5) Any time there is a quote lock in the
BILLING CODE 8011–01–P statements may be examined at the subject option on the Exchange pursuant to Rule
SRADOVICH on DSK3GMQ082PROD with NOTICES
places specified in Item IV below. The 1402; or (6) Any time there is a trading halt in the
Exchange has prepared summaries, set option on the Exchange. See Exchange Rule 515A.
6 See Securities Exchange Act Release Nos. 79733
forth in sections A, B, and C below, of (January 4, 2017), 82 FR 3055 (January 10, 2017)
3 Securities Exchange Act Release No. 34–80269
the most significant aspects of such (SR–ISE–2016–26); 76301 (October 29, 2015), 80 FR
(March 17, 2017), 82 FR 14925 (March 23, 2017) statements. 68347 (November 4, 2015) (SR–BX–2015–032);
77557 (April 7, 2016), 81 FR 21935 (April 13, 2016)
(SR–ICEEU–2017–003) (‘‘Notice’’).
(SR–PHLX–2016–40); and 80421 (April 10, 2017),
4 15 U.S.C. 78s(b)(2). 1 15 U.S.C. 78s(b)(1). 82 FR 18048 (April 14, 2017) (SR–CBOE–2017–
5 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. 029). The Commission notes that CBOE’s proposed
VerDate Sep<11>2014 17:43 May 04, 2017 Jkt 241001 PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 E:\FR\FM\05MYN1.SGM 05MYN1](https://thefederalregister.org/doc/82_FR_21374/page/1.svg)
![Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices 21289
to exposure periods in these (which shall be 500 milliseconds).’’ The to respond, compete, and provide price
mechanisms, the Securities and Exchange proposes to replace this improvement for orders and will
Exchange Commission (‘‘SEC’’) sentence with the proposed language provide investors and other market
concluded that reducing the time used in 515A(a)(2)(i)(C) which provides participants with more timely
periods was consistent with the that ‘‘[t]he RFR will last for a period of executions, thereby reducing their
Securities Exchange Act of 1934 (the time, as determined by the Exchange market risk.
‘‘Act’’).7 and announced through a Regulatory To substantiate that Members can
The Exchange believes that moving to Circular. The RFR will be no less than receive, process, and communicate a
a range structure provides the Exchange 100 milliseconds and no more than 1 response to an auction broadcast within
with greater flexibility in establishing second.’’ 100 milliseconds, the Exchange
the optimal duration for Auctions and The Exchange does not believe that surveyed all Members that responded to
Solicitation Auctions. The Exchange requiring the Auction and Solicitation an auction broadcast in the period
believes that permitting a shorter Auction to run for 500 milliseconds is beginning November 2016 and ending
duration of as low as 100 milliseconds necessary in today’s market where, January 2017 (the ‘‘review period’’). The
will reduce market risk for all Members generally, Members’ systems have the Exchange received responses from all of
executing trades on the Exchange via capability to respond within 100 the Members surveyed, and each
the PRIME and PRIME Solicitation milliseconds or less. As such, reducing Member confirmed that they can
Mechanism. Initiating participants are the response time in the PRIME and receive, process, and communicate a
required to guarantee an execution at PRIME Solicitation Mechanism is response back to the Exchange within
the NBBO 8 or at a better price, and are appropriate as Members no longer need 100 milliseconds.
subject to market risk as their PRIME up to 500 milliseconds to respond to an Also, in consideration with this
order is exposed to other Members of Auction or Solicitation Auction. proposed rule change, the Exchange
the Exchange. While other participants Reducing the response time will allow reviewed all responses received in
are also subject to market risk, those Members the opportunity to seek out PRIME and PRIME Solicitation Auctions
providing responses may cancel their liquidity in an expedient manner that is from its Members for the review period.
responses. The Exchange believes that consistent with today’s system During the review period, on average,
the initiating participant plays a critical capabilities. approximately 60% of responses were
role in the Auction and Solicitation The Exchange’s Members operate submitted within the first 50
Auction processes. Their willingness to electronic systems that enable them to milliseconds, and approximately 90% of
guarantee the orders entered into the react and respond to orders in a responses were submitted within 100
PRIME and PRIME Solicitation meaningful way in fractions of a second. milliseconds.10
Mechanism an execution at the NBBO The Exchange anticipates that its Accordingly, the Exchange believes
or, in some cases, a better price, is the Members will continue to compete that a response time as low as 100
catalyst for an order gaining the within the proposed response times milliseconds will continue to provide
opportunity for price improvement. The designated by the Exchange. In Members with sufficient time to
Exchange believes that allowing an particular, the Exchange believes that respond to, compete for, and provide
Auction period of no less than 100 the proposed response times—which price improvement for orders, and will
milliseconds and no more than 1 second will be no less than 100 milliseconds provide investors and other market
will benefit Members utilizing the and no more than 1 second—will participants with more timely
PRIME and PRIME Solicitation continue to provide Members with executions, and reduce their market
Mechanism. The Exchange believes it is sufficient time to respond to, compete
risk. The Exchange also believes it is
in these Members’ best interests to for, and provide price improvement for
likely that the number of PRIME
minimize the Auction and Solicitation orders, and will provide investors and
transactions will increase, thereby
Auction duration while continuing to other market participants with more
providing customers a greater
allow Members adequate time to timely executions, and reduce their
opportunity to benefit from price
respond. The Exchange notes the market risk.
Reducing the duration of Auctions improvement.
Commission previously approved other The Exchange believes that the
and Solicitation Auctions from 500
exchanges’ rules that provide for an information outlined above regarding
milliseconds to as low as 100
auction response time as low as 100 price improving transactions in the
milliseconds will benefit Members
milliseconds 9 and that the Exchange is PRIME and PRIME Solicitation
trading in the PRIME and PRIME
not proposing to go lower than the Solicitation Mechanism. The Exchange Mechanism provides substantial
lowest previously approved timer range. believes that it is in these Members’ best support for its assertion that reducing
Accordingly, the Exchange proposes the response time from 500 milliseconds
interest to minimize the response time
to amend Rule 515A(b)(2)(i)(C) to to as low as 100 milliseconds will
while continuing to allow Members
remove the reference to the duration of continue to provide Members with
adequate time to electronically respond.
the current timer setting. Currently the sufficient time to ensure competition for
Both the order being exposed and the
rule states that, ‘‘[m]embers may submit orders entered into the PRIME and
Members’ responses are subject to
responses to the RFR (specifying prices PRIME Solicitation Mechanism, and
market risk during the Auction or
and sizes) during the response period Solicitation Auction. While a limited could provide customer orders with
number of Members wait to respond additional opportunities for price
SRADOVICH on DSK3GMQ082PROD with NOTICES
rule change to amend its auction response period improvement.
was published in the Federal Register on April 14, until later in the Auction or Solicitation
2017 and is subject to a public comment period Auction, presumably to minimize their With regard to the impact of this
expiring on May 5, 2017. market risk, the majority of Members proposal on system capacity, the
7 Id.
respond within the first 100 Exchange has analyzed its capacity and
8 The term ‘‘NBBO’’ means the national best bid
milliseconds. The Exchange believes
or offer as calculated by the Exchange based on 10 The Exchange notes that the average
market information received by the Exchange from that a response time as low as 100 percentages for responses within 50 milliseconds
OPRA. See Exchange Rule 100. milliseconds will continue to provide and 100 milliseconds were 61.03% and 88.19%
9 See supra note 6. market participants with sufficient time respectively.
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![21290 Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices
represents that it has the necessary have today, and will continue to have, appropriate in furtherance of the
systems capacity to handle the potential an equal opportunity to receive the purposes of the Act, and believes the
additional traffic associated with the broadcast and respond with their best proposed change will enhance
additional transactions that may occur prices during the auction. Additionally, competition.
with the implementation of the the Exchange believes the reduction of
C. Self-Regulatory Organization’s
proposed reduction in the response time the response time for an auction reduces
duration to no less than 100 Statement on Comments on the
the market risk for all Members. The
milliseconds. Additionally, the Proposed Rule Change Received From
reduction of the time period reduces the
Exchange represents that its System will Members, Participants, or Others
market risk for the initiating member as
be able to sufficiently maintain an audit well as any Members providing orders Written comments were neither
trail for order and trade information in response to an RFR. solicited nor received.
with the reduction in the response III. Date of Effectiveness of the
timer. B. Self-Regulatory Organization’s
Statement on Burden on Competition Proposed Rule Change and Timing for
2. Statutory Basis Commission Action
The Exchange does not believe that
MIAX Options believes that its the proposed rule change will impose Within 45 days of the date of
proposed rule change is consistent with any burden on competition that is not publication of this notice in the Federal
Section 6(b) of the Act 11 in general, and necessary or appropriate in furtherance Register or within such longer period (i)
furthers the objectives of Section 6(b)(5) of the purposes of the Act. as the Commission may designate up to
of the Act 12 in particular, in that it is The proposed rule change to provide 90 days of such date if it finds such
designed to prevent fraudulent and the Exchange flexibility in determining longer period to be appropriate and
manipulative acts and practices, to potentially shorter durations for publishes its reasons for so finding or
promote just and equitable principles of Auctions and Solicitation Auctions does (ii) as to which the Exchange consents,
trade, to foster cooperation and not impose an undue burden on intra- the Commission shall: (a) By order
coordination with persons engaged in market competition as the Exchange approve or disapprove such proposed
facilitating transactions in securities, to believes that allowing for an auction rule change, or (b) institute proceedings
remove impediments to and perfect the period of no less than 100 milliseconds to determine whether the proposed rule
mechanisms of a free and open market and no more than 1 second will benefit change should be disapproved.
and a national market system and, in Members utilizing the PRIME and
general, to protect investors and the IV. Solicitation of Comments
PRIME Solicitation Mechanism. The
public interest. Exchange believes it is in these Interested persons are invited to
In particular, the proposed rule Members’ best interest to minimize the submit written data, views, and
change will provide investors with more Auction and Solicitation Auction arguments concerning the foregoing,
timely execution of their option orders, duration while continuing to allow including whether the proposed rule
while ensuring that there is an adequate Members adequate time to respond change is consistent with the Act.
exposure of orders in the mechanisms. electronically. Comments may be submitted by any of
Additionally, the proposed change will The proposed rule allows Members to the following methods:
allow more investors the opportunity to respond quickly at the most favorable Electronic Comments
receive price improvement through the price while reducing the risk that the
PRIME and PRIME Solicitation market will move against the response. • Use the Commission’s Internet
Mechanism and will reduce market risk The Exchange believes that its Members comment form (http://www.sec.gov/
for Members using these mechanisms. will be able to compete within a timer rules/sro.shtml); or
Finally, as mentioned above, other • Send an email to rule-comments@
range of no less than 100 milliseconds
exchanges such as ISE, BX, PHLX, and sec.gov. Please include File Number SR–
and no more than 1 second, and that
CBOE [sic],13 have already amended MIAX–2017–16 on the subject line.
any specific duration within this range
their rules to permit response times is a sufficient amount of time to respond Paper Comments
consistent with the instant proposal— to, compete for, and provide price
i.e., no less than 100 milliseconds and • Send paper comments in triplicate
improvement for orders, and will to Secretary, Securities and Exchange
no more than 1 second.14 As such, the provide investors and other market
Exchange believes the proposed rule Commission, 100 F Street NE.,
participants more timely executions, Washington, DC 20549–1090.
change would help perfect the and reduce their market risk.
mechanism for a free and open national All submissions should refer to File
The Exchange does not believe its
market system, and generally help Number SR–MIAX–2017–16. This file
proposed rule change will impose an
protect investors and the public’s number should be included on the
undue burden on inter-market
interest. subject line if email is used. To help the
competition as the Exchange notes other
The Exchange believes the proposed Commission process and review your
exchanges offer similar functionality
rule change is not unfairly comments more efficiently, please use
with similar auction duration lengths.15
discriminatory because the response only one method. The Commission will
For all the reasons stated, the
time duration would be the same for all post all comments on the Commission’s
Exchange does not believe that the
Members. All Members in the PRIME Internet Web site (http://www.sec.gov/
proposed rule change will impose any
and PRIME Solicitation Mechanism rules/sro.shtml). Copies of the
SRADOVICH on DSK3GMQ082PROD with NOTICES
burden on competition not necessary or
submission, all subsequent
11 15 U.S.C. 78f(b). 15 See NASDAQ BX Rules, Chapter VI, Section amendments, all written statements
12 15 U.S.C. 78f(b)(5). 9(ii)(A)(3), CBOE Rule 6.74A and 6.74B, ISE Rule with respect to the proposed rule
13 The Commission notes that CBOE’s proposed
723(c)(1), and NASDAQ PHLX Rule change that are filed with the
rule change to amend its auction response period 1080(n)(ii)(A)(4). The Commission notes that Commission, and all written
was published in the Federal Register on April 14, CBOE’s proposed rule change to amend its auction
2017 and is subject to a public comment period response period was published in the Federal
communications relating to the
expiring on May 5, 2017. Register on April 14, 2017 and is subject to a public proposed rule change between the
14 See supra note 6. comment period expiring on May 5, 2017. Commission and any person, other than
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![Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices 21291
those that may be withheld from the address listed above or other locally beginning 08/19/2016 and continuing
public in accordance with the announced locations. through 09/22/2016.
provisions of 5 U.S.C. 552, will be The following areas have been All other information in the original
available for Web site viewing and determined to be adversely affected by declaration remains unchanged.
printing in the Commission’s Public the disaster: (Catalog of Federal Domestic Assistance
Reference Room, 100 F Street NE., Primary Counties: Payette, Washington Number 59008)
Washington, DC 20549, on official Contiguous Counties: Dated: April 28, 2017.
business days between the hours of Idaho: Adams, Canyon, Gem
Linda E. McMahon,
10:00 a.m. and 3:00 p.m. Copies of the Oregon: Baker, Malheur
filing also will be available for Administrator.
The Interest Rates are:
inspection and copying at the principal [FR Doc. 2017–09064 Filed 5–4–17; 8:45 am]
office of the Exchange. All comments Percent BILLING CODE 8025–01–P
received will be posted without change;
the Commission does not edit personal Businesses and Small Agricultural
identifying information from Cooperatives without Credit SOCIAL SECURITY ADMINISTRATION
submissions. You should submit only Available Elsewhere .................. 3.125
Non Profit Organizations without [Docket No: SSA–2017–0023]
information that you wish to make Credit Available Elsewhere ....... 2.500
available publicly. All submissions Agency Information Collection
should refer to File Number SR–MIAX– The number assigned to this disaster Activities: Proposed Request and
2017–16 and should be submitted on or for economic injury is 151230. Comment Request
before May 26, 2017. The States which received an EIDL
The Social Security Administration
For the Commission, by the Division of Declaration # are IDAHO, OREGON.
Trading and Markets, pursuant to delegated (SSA) publishes a list of information
(Catalog of Federal Domestic Assistance collection packages requiring clearance
authority.16
Number 59008) by the Office of Management and
Eduardo A. Aleman,
Dated: April 27, 2017. Budget (OMB) in compliance with
Assistant Secretary.
Linda E. McMahon, Public Law 104–13, the Paperwork
[FR Doc. 2017–09062 Filed 5–4–17; 8:45 am]
Administrator. Reduction Act of 1995, effective October
BILLING CODE 8011–01–P
[FR Doc. 2017–09066 Filed 5–4–17; 8:45 am] 1, 1995. This notice includes revisions
BILLING CODE 8025–01–P
of OMB-approved information
collections.
SMALL BUSINESS ADMINISTRATION SSA is soliciting comments on the
[Disaster Declaration #15123] SMALL BUSINESS ADMINISTRATION accuracy of the agency’s burden
estimate; the need for the information;
[Disaster Declaration #14856] its practical utility; ways to enhance its
Idaho Disaster #ID–00064 Declaration
of Economic Injury quality, utility, and clarity; and ways to
Montana Disaster #MT–00099
minimize burden on respondents,
AGENCY: Small Business Administration. Declaration of Economic Injury
including the use of automated
ACTION: Notice. AGENCY: U.S. Small Business collection techniques or other forms of
Administration. information technology. Mail, email, or
SUMMARY: This is a notice of an fax your comments and
ACTION: Amendment 1.
Economic Injury Disaster Loan (EIDL) recommendations on the information
declaration for the State of IDAHO, SUMMARY: This is an amendment of the collection(s) to the OMB Desk Officer
dated 04/27/2017. Economic Injury Disaster Loan (EIDL) and SSA Reports Clearance Officer at
Incident: Severe Winter Storms. declaration for the State of Montana, the following addresses or fax numbers.
Incident Period: 12/22/2016 through dated 09/20/2016. (OMB), Office of Management and
01/19/2017. Incident: River Conditions Resulting Budget, Attn: Desk Officer for SSA,
DATES: Effective 04/27/2017. in the Closure of the Yellowstone River. Fax: 202–395–6974, Email address:
EIDL Loan Application Deadline Date: Incident Period: 08/19/2016 through OIRA_Submission@omb.eop.gov
01/29/2018. 09/22/2016. (SSA), Social Security Administration,
ADDRESSES: Submit completed loan Effective Date: 04/28/2017. OLCA, Attn: Reports Clearance
applications to: U.S. Small Business EIDL Loan Application Deadline Date: Director, 3100 West High Rise, 6401
Administration, Processing and 06/20/2017. Security Blvd., Baltimore, MD 21235,
Disbursement Center, 14925 Kingsport ADDRESSES: Submit completed loan Fax: 410–966–2830, Email address:
Road, Fort Worth, TX 76155. applications to: U.S. Small Business OR.Reports.Clearance@ssa.gov
FOR FURTHER INFORMATION CONTACT: Administration, Processing and Or you may submit your comments
Alan Escobar, Office of Disaster Disbursement Center, 14925 Kingsport online through www.regulations.gov,
Assistance, U.S. Small Business Road, Fort Worth, TX 76155. referencing Docket ID Number [SSA–
Administration, 409 3rd Street SW., FOR FURTHER INFORMATION CONTACT: A. 2017–0023].
Suite 6050, Washington, DC 20416, Escobar, Office of Disaster Assistance, I. The information collection below is
SRADOVICH on DSK3GMQ082PROD with NOTICES
(202) 205–6734. U.S. Small Business Administration, pending at SSA. SSA will submit it to
SUPPLEMENTARY INFORMATION: Notice is 409 3rd Street SW., Suite 6050, OMB within 60 days from the date of
hereby given that as a result of the Washington, DC 20416, (202) 205–6734. this notice. To be sure we consider your
Administrator’s EIDL declaration, SUPPLEMENTARY INFORMATION: The notice comments, we must receive them no
applications for economic injury of an Economic Injury declaration for later than July 5, 2017. Individuals can
disaster loans may be filed at the the State of MONTANA dated 09/20/ obtain copies of the collection
2016 is hereby amended to establish the instruments by writing to the above
16 17 CFR 200.30–3(a)(12). incident period for this disaster as email address.
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Document Created: 2018-11-08 08:39:28
Document Modified: 2018-11-08 08:39:28
| 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 | 82 FR 21288 |
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