82 FR 25022 - Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX PEARL Rule 510 To Extend the Penny Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 103 (May 31, 2017)

Page Range		25022-25023
FR Document		2017-11147
Federal Register, Volume 82 Issue 103 (Wednesday, May 31, 2017)
[Federal Register Volume 82, Number 103 (Wednesday, May 31, 2017)]
[Notices]
[Pages 25022-25023]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-11147]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80758; File No. SR-PEARL-2017-24]


Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX 
PEARL Rule 510 To Extend the Penny Pilot Program

May 24, 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 May 16, 2017, MIAX PEARL, LLC (``MIAX PEARL'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend Exchange Rule 510, 
Interpretations and Policies .01, to extend the pilot program for the 
quoting and trading of certain options in pennies.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.miaxoptions.com/rule-filings/pearl at MIAX 
PEARL'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 is a participant in an industry-wide pilot program 
that provides for the quoting and trading of certain option classes in 
penny increments (the ``Penny Pilot Program'' or ``Program''). The 
Penny Pilot Program allows the quoting and trading of certain option 
classes in minimum increments of $0.01 for all series in such option 
classes with a price of less than $3.00; and in minimum increments of 
$0.05 for all series in such option classes with a price of $3.00 or 
higher. Options overlying the PowerShares QQQ^TM (``QQQ''), 
SPDR[supreg] S&P 500[supreg] ETF (``SPY''), and iShares[supreg] Russell 
2000 ETF (``IWM''), however, are quoted and traded in minimum 
increments of $0.01 for all series regardless of the price. The Penny 
Pilot Program was initiated at the then existing option exchanges in 
January 2007 \3\ and currently includes more than 300 of the most 
active option classes. The Penny Pilot Program is currently scheduled 
to expire on June 30, 2017.\4\ The purpose of the proposed rule change 
is to extend the Penny Pilot Program in its current format through 
December 31, 2017.
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    \3\ See Securities Exchange Act Release Nos. 55154 (January 23, 
2007), 72 FR 4743 (February 1, 2007) (SR-CBOE-2006-92); 55161 
(January 24, 2007), 72 FR 4754 (February 1, 2007) (SR-ISE-2006-62); 
54886 (December 6, 2006), 71 FR 74979 (December 13, 2006) (SR-Phlx-
2006-74); 54590 (October 12, 2006), 71 FR 61525 (October 18, 2006) 
(SR-NYSEArca-2006-73); and 54741 (November 9, 2006), 71 FR 67176 
(November 20, 2006) (SR-Amex-2006-106).
    \4\ See Securities Exchange Act Release No. 79778 (January 12, 
2017), 82 FR 6662 (January 19, 2017) (SR-PEARL-2016-01) (extending 
the Penny Pilot Program to June 30, 2017).
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    In addition to the extension of the Penny Pilot Program through 
December 31, 2017, the Exchange proposes to extend one other date in 
the Rule. Currently, Interpretations and Policies .01 states that the 
Exchange will replace any Penny Pilot issues that have been delisted 
with the next most actively traded multiply listed option classes that 
are not yet included in the Penny Pilot Program, and that the 
replacement issues will be selected based on trading activity in the 
previous six months. Such option classes will be added to the Penny 
Pilot Program on the second trading day following January 1, 2017.\5\ 
Because this date has expired and the Exchange intends to continue this 
practice for the duration of the Penny Pilot Program, the Exchange is 
proposing to amend the Rule to reflect that such option classes will be 
added to the Penny Pilot Program on the second trading day following 
July 1, 2017.
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    \5\ The month immediately preceding a replacement class's 
addition to the Pilot Program i.e., June) is not used for purposes 
of the six-month analysis. For example, a replacement added on the 
second trading day following July 1, 2017, will be identified based 
on trading activity from December 1, 2016, through May 31, 2017.
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    The purpose of this provision is to reflect the new date on which 
replacement issues may be added to the Penny Pilot Program.
2. Statutory Basis
    MIAX PEARL believes that its proposed rule change is consistent 
with Section 6(b) of the Act \6\ in general, and furthers the 
objectives of Section 6(b)(5)

[[Page 25023]]

of the Act \7\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    In particular, the proposed rule change, which extends the Penny 
Pilot Program for six months, allows the Exchange to continue to 
participate in a program that has been viewed as beneficial to traders, 
investors and public customers and viewed as successful by the other 
options exchanges participating in it.

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. Specifically, the Exchange 
believes that, by extending the expiration of the Pilot Program, the 
proposed rule change will allow for further analysis of the Penny Pilot 
Program and a determination of how the Program should be structured in 
the future. In doing so, the proposed rule change will also serve to 
promote regulatory clarity and consistency, thereby reducing burdens on 
the marketplace, facilitating investor protection, and fostering a 
competitive environment. In addition, consistent with previous 
practices, the Exchange believes the other options exchanges will be 
filing similar extensions of the Penny Pilot Program.

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 \8\ and Rule 19b-4(f)(6) \9\ 
thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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-PEARL-2017-24 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-PEARL-2017-24. 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-PEARL-2017-24 and 
should be submitted on or before June 21, 2017. For the Commission, by 
the Division of Trading and Markets, pursuant to delegated 
authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11147 Filed 5-30-17; 8:45 am]
 BILLING CODE 8011-01-P
25022 Federal Register / Vol. 82, No. 103 / Wednesday, May 31, 2017 / Notices

apply to ‘‘Members’’ of a national of 1934 (‘‘Act’’) 1 and Rule 19b–4 (‘‘QQQ’’), SPDR® S&P 500® ETF
securities exchange without any thereunder,2 notice is hereby given that (‘‘SPY’’), and iShares® Russell 2000 ETF
substantive change to the application of on May 16, 2017, MIAX PEARL, LLC (‘‘IWM’’), however, are quoted and
those provisions. The Commission also (‘‘MIAX PEARL’’ or ‘‘Exchange’’) filed traded in minimum increments of $0.01
believes that it is appropriate for the with the Securities and Exchange for all series regardless of the price. The
Exchanges to delete obsolete or Commission (‘‘Commission’’) a Penny Pilot Program was initiated at the
inaccurate references in the ICE proposed rule change as described in then existing option exchanges in
Certificate and ICE Bylaws. Items I, II, and III below, which Items January 2007 3 and currently includes
The Exchanges further propose to have been prepared by the Exchange. more than 300 of the most active option
amend the ICE Bylaws provisions The Commission is publishing this classes. The Penny Pilot Program is
relating to the location of stockholder notice to solicit comments on the currently scheduled to expire on June
meetings; the quorum for stockholder proposed rule change from interested 30, 2017.4 The purpose of the proposed
meetings; the advance notice persons. rule change is to extend the Penny Pilot
requirements for stockholder proposals Program in its current format through
I. Self-Regulatory Organization’s
brought forth at stockholder meetings; December 31, 2017.
Statement of the Terms of Substance of In addition to the extension of the
and to adopt the term ‘‘Proponent,’’ to the Proposed Rule Change
refer to stockholders and nominees that Penny Pilot Program through December
propose to bring matters before the The Exchange is filing a proposal to 31, 2017, the Exchange proposes to
annual meeting of stockholders. The amend Exchange Rule 510, extend one other date in the Rule.
Commission believes that the Interpretations and Policies .01, to Currently, Interpretations and Policies
amendments are consistent with the extend the pilot program for the quoting .01 states that the Exchange will replace
requirements of Section 6(b)(5) of the and trading of certain options in any Penny Pilot issues that have been
Act,57 which requires, among other pennies. delisted with the next most actively
The text of the proposed rule change traded multiply listed option classes
things, that the rules of a national
is available on the Exchange’s Web site that are not yet included in the Penny
securities exchange remove
at http://www.miaxoptions.com/rule- Pilot Program, and that the replacement
impediments to and perfect the
filings/pearl at MIAX PEARL’s principal issues will be selected based on trading
mechanism of a free and open market
office, and at the Commission’s Public activity in the previous six months.
and a national market system because
Reference Room. Such option classes will be added to the
the proposed changes clarify the rules
applicable to shareholder meetings and II. Self-Regulatory Organization’s Penny Pilot Program on the second
the entities that can bring matters before Statement of the Purpose of, and trading day following January 1, 2017.5
an annual meeting of shareholders. Statutory Basis for, the Proposed Rule Because this date has expired and the
Change Exchange intends to continue this
IV. Conclusion practice for the duration of the Penny
In its filing with the Commission, the Pilot Program, the Exchange is
It is therefore ordered, pursuant to Exchange included statements
Section 19(b)(2) of the Act, that the proposing to amend the Rule to reflect
concerning the purpose of and basis for that such option classes will be added
proposed rule changes (SR–NYSE– the proposed rule change and discussed
2017–13; SR–NYSEArca–2017–29; SR– to the Penny Pilot Program on the
any comments it received on the second trading day following July 1,
NYSEMKT–2017–17; SR–NYSENAT– proposed rule change. The text of these
2017–01), as modified by Amendment 2017.
statements may be examined at the The purpose of this provision is to
No. 1 thereto, are approved. places specified in Item IV below. The reflect the new date on which
For the Commission, by the Division of Exchange has prepared summaries, set replacement issues may be added to the
Trading and Markets, pursuant to delegated forth in sections A, B, and C below, of Penny Pilot Program.
authority.58 the most significant aspects of such
Eduardo A. Aleman, statements. 2. Statutory Basis
Assistant Secretary.
A. Self-Regulatory Organization’s MIAX PEARL believes that its
[FR Doc. 2017–11141 Filed 5–30–17; 8:45 am] Statement of the Purpose of, and proposed rule change is consistent with
BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule Section 6(b) of the Act 6 in general, and
Change furthers the objectives of Section 6(b)(5)

SECURITIES AND EXCHANGE 1. Purpose 3 See Securities Exchange Act Release Nos. 55154

COMMISSION (January 23, 2007), 72 FR 4743 (February 1, 2007)
The Exchange is a participant in an (SR–CBOE–2006–92); 55161 (January 24, 2007), 72
industry-wide pilot program that FR 4754 (February 1, 2007) (SR–ISE–2006–62);
[Release No. 34–80758; File No. SR–
PEARL–2017–24] provides for the quoting and trading of 54886 (December 6, 2006), 71 FR 74979 (December
certain option classes in penny 13, 2006) (SR–Phlx–2006–74); 54590 (October 12,
2006), 71 FR 61525 (October 18, 2006) (SR–
Self-Regulatory Organizations; MIAX increments (the ‘‘Penny Pilot Program’’ NYSEArca–2006–73); and 54741 (November 9,
PEARL, LLC; Notice of Filing and or ‘‘Program’’). The Penny Pilot Program 2006), 71 FR 67176 (November 20, 2006) (SR–
Immediate Effectiveness of a Proposed allows the quoting and trading of certain Amex–2006–106).
4 See Securities Exchange Act Release No. 79778
Rule Change To Amend MIAX PEARL option classes in minimum increments
(January 12, 2017), 82 FR 6662 (January 19, 2017)
Rule 510 To Extend the Penny Pilot of $0.01 for all series in such option (SR–PEARL–2016–01) (extending the Penny Pilot
Program classes with a price of less than $3.00;
nlaroche on DSK30NT082PROD with NOTICES

Program to June 30, 2017).
and in minimum increments of $0.05 for 5 The month immediately preceding a
May 24, 2017. all series in such option classes with a replacement class’s addition to the Pilot Program
Pursuant to the provisions of Section price of $3.00 or higher. Options i.e., June) is not used for purposes of the six-month
19(b)(1) of the Securities Exchange Act analysis. For example, a replacement added on the
overlying the PowerShares QQQTM second trading day following July 1, 2017, will be
identified based on trading activity from December
57 15 U.S.C. 78f(b)(5). 1 15 U.S.C. 78s(b)(1). 1, 2016, through May 31, 2017.
58 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. 6 15 U.S.C. 78f(b).

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Federal Register / Vol. 82, No. 103 / Wednesday, May 31, 2017 / Notices 25023

of the Act 7 in particular, in that it is of the Act 8 and Rule 19b–4(f)(6) 9 printing in the Commission’s Public
designed to prevent fraudulent and thereunder. Reference Room, 100 F Street NE.,
manipulative acts and practices, to At any time within 60 days of the Washington, DC 20549, on official
promote just and equitable principles of filing of the proposed rule change, the business days between the hours of
trade, to foster cooperation and Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of the
coordination with persons engaged in temporarily suspend such rule change if filing also will be available for
facilitating transactions in securities, to it appears to the Commission that such inspection and copying at the principal
remove impediments to and perfect the action is necessary or appropriate in the office of the Exchange. All comments
mechanisms of a free and open market public interest, for the protection of received will be posted without change;
and a national market system and, in investors, or otherwise in furtherance of the Commission does not edit personal
general, to protect investors and the the purposes of the Act. If the identifying information from
public interest. Commission takes such action, the submissions. You should submit only
In particular, the proposed rule Commission shall institute proceedings information that you wish to make
change, which extends the Penny Pilot to determine whether the proposed rule available publicly.
Program for six months, allows the should be approved or disapproved. All submissions should refer to File
Exchange to continue to participate in a Number SR–PEARL–2017–24 and
IV. Solicitation of Comments should be submitted on or before June
program that has been viewed as
beneficial to traders, investors and Interested persons are invited to 21, 2017. For the Commission, by the
public customers and viewed as submit written data, views, and Division of Trading and Markets,
successful by the other options arguments concerning the foregoing, pursuant to delegated authority.10
exchanges participating in it. including whether the proposed rule
Eduardo A. Aleman,
change is consistent with the Act.
B. Self-Regulatory Organization’s Comments may be submitted by any of Assistant Secretary.
Statement on Burden on Competition the following methods: [FR Doc. 2017–11147 Filed 5–30–17; 8:45 am]
BILLING CODE 8011–01–P
The Exchange does not believe that Electronic Comments
the proposed rule change will impose
any burden on competition that is not • Use the Commission’s Internet
comment form (http://www.sec.gov/ SECURITIES AND EXCHANGE
necessary or appropriate in furtherance COMMISSION
of the purposes of the Act. Specifically, rules/sro.shtml); or
the Exchange believes that, by extending • Send an email to rule-comments@ [Release No. 34–80756; File No. SR–
the expiration of the Pilot Program, the sec.gov. Please include File Number SR– Nasdaq–2017–049]
proposed rule change will allow for PEARL–2017–24 on the subject line.
Self-Regulatory Organizations; The
further analysis of the Penny Pilot Paper Comments NASDAQ Stock Market LLC; Notice of
Program and a determination of how the
• Send paper comments in triplicate Filing and Immediate Effectiveness of
Program should be structured in the
to Secretary, Securities and Exchange Proposed Rule Change To Extend the
future. In doing so, the proposed rule
Commission, 100 F Street NE., Penny Pilot Program
change will also serve to promote
Washington, DC 20549–1090.
regulatory clarity and consistency, May 24, 2017.
thereby reducing burdens on the All submissions should refer to File Pursuant to Section 19(b)(1) of the
marketplace, facilitating investor Number SR–PEARL–2017–24. This file Securities Exchange Act of 1934
protection, and fostering a competitive number should be included on the (‘‘Act’’),1 and Rule 19b–4 thereunder, 2
environment. In addition, consistent subject line if email is used. To help the notice is hereby given that on May 11,
with previous practices, the Exchange Commission process and review your 2017, The NASDAQ Stock Market LLC
believes the other options exchanges comments more efficiently, please use (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
will be filing similar extensions of the only one method. The Commission will Securities and Exchange Commission
Penny Pilot Program. post all comments on the Commission’s (‘‘SEC’’ or ‘‘Commission’’) the proposed
Internet Web site (http://www.sec.gov/ rule change as described in Items I, II,
C. Self-Regulatory Organization’s rules/sro.shtml).
Statement on Comments on the and III below, which Items have been
Copies of the submission, all prepared by the Exchange. The
Proposed Rule Change Received From subsequent amendments, all written
Members, Participants, or Others Commission is publishing this notice to
statements with respect to the proposed solicit comments on the proposed rule
Written comments were neither rule change that are filed with the change from interested persons.
solicited nor received. Commission, and all written
communications relating to the I. Self-Regulatory Organization’s
III. Date of Effectiveness of the proposed rule change between the Statement of the Terms of Substance of
Proposed Rule Change and Timing for Commission and any person, other than the Proposed Rule Change
Commission Action those that may be withheld from the The Exchange proposes to amend
Because the foregoing proposed rule public in accordance with the Chapter VI, Section 5 (Minimum
change does not: (i) Significantly affect provisions of 5 U.S.C. 552, will be Increments) 3 of the rules of the
the protection of investors or the public available for Web site viewing and NASDAQ Options Market (‘‘NOM’’) to
interest; (ii) impose any significant extend through December 31, 2017 or
nlaroche on DSK30NT082PROD with NOTICES

8 15 U.S.C. 78s(b)(3)(A).
burden on competition; and (iii) become the date of permanent approval, if
9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
operative for 30 days after the date of 4(f)(6) requires a self-regulatory organization to give 10 17 CFR 200.30–3(a)(12).
the filing, or such shorter time as the the Commission written notice of its intent to file
1 15 U.S.C. 78s(b)(1).
Commission may designate, it has the proposed rule change at least five business days
2 17 CFR 240.19b–4.
become effective pursuant to 19(b)(3)(A) prior to the date of filing of the proposed rule
change, or such shorter time as designated by the 3 References herein to Chapter and Series refer to

Commission. The Exchange has satisfied this rules of the NASDAQ Options Market (‘‘NOM’’),
7 15 U.S.C. 78f(b)(5). requirement. unless otherwise noted.

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Document Created: 2017-05-31 05:59:30
Document Modified: 2017-05-31 05:59:30
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 25022