82 FR 26724 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change Related to Unusual Market Conditions and the Duty To Systemize Non-Electronic Orders Prior to Representation
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 109 (June 8, 2017)
Federal Register Volume 82, Issue 109 (June 8, 2017)
| Page Range | 26724-26726 | |
| FR Document | 2017-11870 |
[Federal Register Volume 82, Number 109 (Thursday, June 8, 2017)] [Notices] [Pages 26724-26726] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-11870] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80854; File No. SR-CBOE-2017-010] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change Related to Unusual Market Conditions and the Duty To Systemize Non-Electronic Orders Prior to Representation June 2, 2017. I. Introduction On February 15, 2017, the Chicago Board Options Exchange, Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to amend its rules regarding the circumstances in which CBOE Floor Officials may declare a ``fast'' market and the actions those Floor Officials may take when a fast market is declared, including the ability to suspend the duty to systemize a non-electronic order prior to representing it in open outcry trading. The proposed rule change was published for comment in the Federal Register on March 6, 2017.\3\ The Commission received no comments on the proposed rule change. On April 18, 2017, pursuant to Section 19(b)(2) of the Exchange Act,\4\ the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.\5\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 80123 (February 28, 2017), 82 FR 12667 (``Notice''). \4\ 15 U.S.C. 78s(b)(2). \5\ See Securities Exchange Act Release No. 80481, 82 FR 18941 (April 24, 2017). The Commission designated June 4, 2017, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. --------------------------------------------------------------------------- The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and to institute proceedings under Section 19(b)(2)(B) of the Exchange Act \6\ to determine whether to approve or disapprove the proposed rule change, as discussed in Section III below. The institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved, nor does it mean that the Commission will ultimately disapprove the proposed rule change. Rather, as described in Section III below, the Commission seeks and encourages interested persons to provide additional comment on the proposed rule change in order to inform the Commission's analysis of whether to approve or disapprove the proposed rule change. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- II. Summary of Proposal Currently, CBOE Rule 6.6(a) permits two Floor Officials to declare a market to be ``fast'' ``because of an influx of orders or other unusual conditions or circumstances'' when doing so would be in ``the interest of maintaining a fair and orderly market.'' \7\ Once a market is declared ``fast,'' Floor Officials have the authority to take a number of actions.\8\ --------------------------------------------------------------------------- \7\ See CBOE Rule 6.6(a). \8\ See CBOE Rule 6.6(b). --------------------------------------------------------------------------- In its filing, CBOE proposes several changes to Rule 6.6. First, CBOE proposes to amend paragraph (a) of the rule to require that at least one of the two Floor Officials that declares a fast market must be an Exchange employee. Additionally, the Exchange proposes to provide a non-exhaustive list of ``unusual conditions or circumstances'' that Floor Officials may consider when determining whether to declare a market to be ``fast.'' Specifically, proposed new language in Rule 6.6(a) would provide that: ``[i]t may be in the interest of fair and orderly markets to declare a fast market when one or more of the following conditions have been met: (i) The previous day's closing price of the S&P 500 Index is more than 2% away from the previous day's opening price; (ii) the front-month E-mini S&P 500 Future (symbol ES/1) is trading more than 20 points above or below the previous day's closing values by 8:00 a.m. CT; or (iii) the intraday price of the S&P 500 Index moves more than 1% in any one hour interval during regular trading hours.'' In the Notice, CBOE acknowledges that some of these conditions occur with some degree of frequency,\9\ but nevertheless asserts that these measures could reflect volatile trading conditions.\10\ The Exchange asserts that including these guidelines in the rule text would give better notice to market participants as to when it might declare a fast market.\11\ --------------------------------------------------------------------------- \9\ See Notice, supra note 3, at 12669 (noting that, over a prior eight month period, the intraday price of the S&P 500 Index had moved more than 1% in any one hour interval during regular trading hours on at least 30 days, which the Exchange categorized as a ``not . . . infrequent occurrence''). \10\ See id. at 12668-69. \11\ See id. --------------------------------------------------------------------------- Further, CBOE proposes to allow two Floor Officials to suspend during a fast market the requirement of CBOE Rule 6.24 that non- electronic orders be systematized prior to representation on the trading floor.\12\ During such a suspension, Trading Permit Holders (``TPHs'') and TPH organizations would be required to follow the procedures described in Rule 6.24(b), which require paper tickets to be used for orders received during a malfunction or disruption of the Exchange's systems.\13\ The Exchange also would require that, as soon as it declares an end to a fast market, TPHs would be required immediately to resume systematizing orders prior to representing them and use best efforts to, as soon as possible and no later than the close of business, input electronically into the Exchange's systems all relevant order information received during the time period when the order systematization requirement was suspended.\14\ --------------------------------------------------------------------------- \12\ See proposed Rule 6.6(b). \13\ See proposed Rule 6.6.01. \14\ See id. --------------------------------------------------------------------------- In justifying its proposal, CBOE highlights that the risk that customers and market participants may experience losses if they miss the market as a result of the time required for TPHs to systematize orders, a risk that CBOE [[Page 26725]] believes is exacerbated during fast markets when there can be an unusually large number of orders submitted to brokers and market prices can change quickly.\15\ The Exchange argues that market participants may be better served when the systemization requirement is suspended, which the Exchange believes could help TPHs more quickly execute orders in open outcry.\16\ --------------------------------------------------------------------------- \15\ See Notice, supra note 3, at 12669. \16\ See id. --------------------------------------------------------------------------- The Exchange asserts that its proposed amendments to CBOE Rule 6.6 would not affect its ability to maintain an accurate audit trail.\17\ CBOE argues that suspending the systematization requirement during a fast market would merely delay its receipt of the audit trail information, because that information would still be recorded in a written form according to the procedures set forth under CBOE Rule 6.24, which currently applies only when orders are received during a malfunction or disruption of the Exchange's systems.\18\ --------------------------------------------------------------------------- \17\ See id. \18\ See id. Rule 6.24 does not explicitly require order details to be captured prior to representation of the order in open outcry. --------------------------------------------------------------------------- Additionally, the Exchange asserts that the proposed rule change would not affect its ability to promptly report trade and quotation information to the Options Price Reporting Authority (``OPRA'').\19\ The Exchange states that market participants would still be required to report the execution of orders within 90 seconds even where the systematization requirement had been suspended under proposed Rule 6.6.\20\ Further, the Exchange states that its collection and reporting of quotation information to OPRA would not be affected by the proposed rule change; CBOE would continue to collect and transmit bids and offers at stated prices or limits with respect to individual securities in which it provides a market.\21\ --------------------------------------------------------------------------- \19\ See id. at 12670. \20\ See id. \21\ See id. --------------------------------------------------------------------------- III. Proceedings To Determine Whether To Approve or Disapprove SR-CBOE- 2017-010 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Exchange Act \22\ to determine whether the proposed rule change should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as stated below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change to inform the Commission's analysis of whether to approve or disapprove the proposed rule change. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- Pursuant to Section 19(b)(2)(B) of the Exchange Act,\23\ the Commission is providing notice of the grounds for disapproval under consideration, as discussed below. The Commission believes that instituting proceedings will allow for additional analysis of, and input from commenters with respect to, the proposed rule change's consistency with: (1) Section 6(b)(1) of the Exchange Act,\24\ which requires that a national securities exchange is so organized and has the capacity to be able to carry out the purposes of the Exchange Act and to comply, and to enforce compliance by its members and persons associated with its members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the exchange; and (2) Section 6(b)(5) of the Exchange Act,\25\ which requires that the rules of a national securities exchange be designed, among other things, to prevent fraudulent and manipulative acts and practices, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \23\ See id. \24\ 15 U.S.C. 78f(b)(1). \25\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Specifically, the Commission is concerned whether the proposed rule change could adversely impact the ability of the Exchange to enforce compliance by its members on the CBOE trading floor with applicable rules and regulations, including CBOE rules designed to, among other things, ensure the integrity of its audit trail to help CBOE prevent fraudulent and manipulative acts and practices. In particular, the Commission wishes to consider further whether CBOE has sufficiently demonstrated how suspending the systemization requirement and relying upon paper tickets, where the order details are not captured prior to representation of the order in open outcry trading, in an environment of ``extraordinary market volatility,'' when TPHs may receive ``an unusually large number of orders'' and ``market prices can change erratically, extremely quickly, and in enormous swings'' will foster compliance with its audit trail rules, support the integrity of the audit trail and the Exchange's surveillance that relies thereon, and not otherwise diminish the Exchange's ability to ensure compliance with these critically important rules and thereby continue to maintain an accurate and reliable audit trail to support its regulatory operations and obligations.\26\ --------------------------------------------------------------------------- \26\ Notice, supra note 3, at 12668-69. --------------------------------------------------------------------------- In its Notice for the current proposal, the Exchange asserts that its proposed amendments to CBOE Rule 6.6 would not affect its ability to maintain an accurate audit trail, but the Exchange does not discuss how or why its position on that issue has changed since first instituting the requirement in 2005.\27\ The Commission is concerned whether CBOE's proposal to suspend the systemization requirement in a fast moving market is appropriately designed to support the integrity and reliability of its audit trail during active trading and, in turn, whether it is designed to support its surveillance program and thereby help prevent fraudulent and manipulative acts and protect investors and the public interest. Further, the Commission is concerned about the appropriateness of the Exchange's proposal to expand the application of Rule 6.24(b), which currently only allows order details to be recorded in paper form when CBOE's systems are down, to now allow paper tickets to be used during a ``fast'' market when CBOE's systems are working properly. --------------------------------------------------------------------------- \27\ See Notice, supra note 3, at 12669. --------------------------------------------------------------------------- IV. Procedure: Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Sections 6(b)(1), 6(b)(5), 6(b)(8), or any other provision of the Exchange Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.\28\ --------------------------------------------------------------------------- \28\ Section 19(b)(2) of the Exchange Act, as amended by the Securities Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding--either oral or notice and opportunity for written comments--is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Act Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). --------------------------------------------------------------------------- [[Page 26726]] Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by June 29, 2017. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by July 13, 2017. The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, in addition to any other comments they may wish to submit about the proposed rule change. 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-CBOE-2017-010 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 Numbers SR-CBOE-2017-010. 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 these filings 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-CBOE-2017-010 and should be submitted on or before June 29, 2017. Rebuttal comments should be submitted by July 13, 2017. --------------------------------------------------------------------------- \29\ 17 CFR 200.30-3(a)(57). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\29\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-11870 Filed 6-7-17; 8:45 am] BILLING CODE 8011-01-P
![26724 Federal Register / Vol. 82, No. 109 / Thursday, June 8, 2017 / Notices
communications relating to the duty to systemize a non-electronic order determining whether to declare a market
proposed rule change between the prior to representing it in open outcry to be ‘‘fast.’’ Specifically, proposed new
Commission and any person, other than trading. The proposed rule change was language in Rule 6.6(a) would provide
those that may be withheld from the published for comment in the Federal that: ‘‘[i]t may be in the interest of fair
public in accordance with the Register on March 6, 2017.3 The and orderly markets to declare a fast
provisions of 5 U.S.C. 552, will be Commission received no comments on market when one or more of the
available for Web site viewing and the proposed rule change. On April 18, following conditions have been met: (i)
printing in the Commission’s Public 2017, pursuant to Section 19(b)(2) of the The previous day’s closing price of the
Reference Room, 100 F Street NE., Exchange Act,4 the Commission S&P 500 Index is more than 2% away
Washington, DC 20549 on official designated a longer period within which from the previous day’s opening price;
business days between the hours of to approve the proposed rule change, (ii) the front-month E-mini S&P 500
10:00 a.m. and 3:00 p.m. Copies of the disapprove the proposed rule change, or Future (symbol ES/1) is trading more
filing also will be available for institute proceedings to determine than 20 points above or below the
inspection and copying at the principal whether to disapprove the proposed previous day’s closing values by 8:00
office of the Exchange. All comments rule change.5 a.m. CT; or (iii) the intraday price of the
received will be posted without change; The Commission is publishing this S&P 500 Index moves more than 1% in
the Commission does not edit personal notice to solicit comments on the any one hour interval during regular
identifying information from proposed rule change from interested trading hours.’’ In the Notice, CBOE
submissions. You should submit only persons and to institute proceedings acknowledges that some of these
information that you wish to make under Section 19(b)(2)(B) of the conditions occur with some degree of
available publicly. All submissions Exchange Act 6 to determine whether to frequency,9 but nevertheless asserts that
should refer to File Number SR– approve or disapprove the proposed these measures could reflect volatile
NYSEARCA–2017–63, and should be rule change, as discussed in Section III trading conditions.10 The Exchange
submitted on or before June 29, 2017. below. The institution of proceedings asserts that including these guidelines
For the Commission, by the Division of does not indicate that the Commission in the rule text would give better notice
Trading and Markets, pursuant to delegated has reached any conclusions with to market participants as to when it
authority.15 respect to any of the issues involved, might declare a fast market.11
Eduardo A. Aleman, nor does it mean that the Commission Further, CBOE proposes to allow two
Assistant Secretary. will ultimately disapprove the proposed Floor Officials to suspend during a fast
[FR Doc. 2017–11867 Filed 6–7–17; 8:45 am]
rule change. Rather, as described in market the requirement of CBOE Rule
Section III below, the Commission seeks 6.24 that non-electronic orders be
BILLING CODE 8011–01–P
and encourages interested persons to systematized prior to representation on
provide additional comment on the the trading floor.12 During such a
SECURITIES AND EXCHANGE proposed rule change in order to inform suspension, Trading Permit Holders
COMMISSION the Commission’s analysis of whether to (‘‘TPHs’’) and TPH organizations would
approve or disapprove the proposed be required to follow the procedures
[Release No. 34–80854; File No. SR–CBOE– rule change. described in Rule 6.24(b), which require
2017–010]
II. Summary of Proposal paper tickets to be used for orders
Self-Regulatory Organizations; received during a malfunction or
Currently, CBOE Rule 6.6(a) permits
Chicago Board Options Exchange, disruption of the Exchange’s systems.13
two Floor Officials to declare a market
Incorporated; Order Instituting The Exchange also would require that,
to be ‘‘fast’’ ‘‘because of an influx of
Proceedings To Determine Whether To as soon as it declares an end to a fast
orders or other unusual conditions or
Approve or Disapprove a Proposed market, TPHs would be required
circumstances’’ when doing so would be
Rule Change Related to Unusual immediately to resume systematizing
in ‘‘the interest of maintaining a fair and
Market Conditions and the Duty To orders prior to representing them and
orderly market.’’ 7 Once a market is
Systemize Non-Electronic Orders Prior use best efforts to, as soon as possible
declared ‘‘fast,’’ Floor Officials have the
to Representation and no later than the close of business,
authority to take a number of actions.8
In its filing, CBOE proposes several input electronically into the Exchange’s
June 2, 2017. systems all relevant order information
changes to Rule 6.6. First, CBOE
I. Introduction proposes to amend paragraph (a) of the received during the time period when
rule to require that at least one of the the order systematization requirement
On February 15, 2017, the Chicago was suspended.14
Board Options Exchange, Incorporated two Floor Officials that declares a fast
market must be an Exchange employee. In justifying its proposal, CBOE
(‘‘Exchange’’ or ‘‘CBOE’’) filed with the highlights that the risk that customers
Securities and Exchange Commission Additionally, the Exchange proposes to
provide a non-exhaustive list of and market participants may experience
(‘‘Commission’’), pursuant to Section losses if they miss the market as a result
19(b)(1) of the Securities Exchange Act ‘‘unusual conditions or circumstances’’
that Floor Officials may consider when of the time required for TPHs to
of 1934 (‘‘Exchange Act’’) 1 and Rule systematize orders, a risk that CBOE
19b–4 thereunder,2 a proposed rule 3 See Securities Exchange Act Release No. 80123
change to amend its rules regarding the (February 28, 2017), 82 FR 12667 (‘‘Notice’’). 9 See Notice, supra note 3, at 12669 (noting that,
asabaliauskas on DSKBBXCHB2PROD with NOTICES
circumstances in which CBOE Floor 4 15 U.S.C. 78s(b)(2). over a prior eight month period, the intraday price
Officials may declare a ‘‘fast’’ market 5 See Securities Exchange Act Release No. 80481, of the S&P 500 Index had moved more than 1% in
any one hour interval during regular trading hours
and the actions those Floor Officials 82 FR 18941 (April 24, 2017). The Commission
on at least 30 days, which the Exchange categorized
may take when a fast market is declared, designated June 4, 2017, as the date by which the
Commission shall either approve or disapprove, or as a ‘‘not . . . infrequent occurrence’’).
including the ability to suspend the institute proceedings to determine whether to 10 See id. at 12668–69.
disapprove, the proposed rule change. 11 See id.
15 17 CFR 200.30–3(a)(12). 6 15 U.S.C. 78s(b)(2)(B). 12 See proposed Rule 6.6(b).
1 15 U.S.C. 78s(b)(1). 7 See CBOE Rule 6.6(a). 13 See proposed Rule 6.6.01.
2 17 CFR 240.19b–4. 8 See CBOE Rule 6.6(b). 14 See id.
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![26726 Federal Register / Vol. 82, No. 109 / Thursday, June 8, 2017 / Notices
Interested persons are invited to the Commission does not edit personal II. Self-Regulatory Organization’s
submit written data, views, and identifying information from Statement of the Purpose of, and
arguments regarding whether the submissions. You should submit only Statutory Basis for, the Proposed Rule
proposal should be approved or information that you wish to make Change
disapproved by June 29, 2017. Any available publicly. All submissions In its filing with the Commission, the
person who wishes to file a rebuttal to should refer to File Number SR–CBOE– Exchange included statements
any other person’s submission must file 2017–010 and should be submitted on concerning the purpose of and basis for
that rebuttal by July 13, 2017. The or before June 29, 2017. Rebuttal the proposed rule change and discussed
Commission asks that commenters comments should be submitted by July any comments it received on the
address the sufficiency of the 13, 2017. proposed rule change. The text of these
Exchange’s statements in support of the For the Commission, by the Division of statements may be examined at the
proposal, in addition to any other Trading and Markets, pursuant to delegated places specified in Item IV below. The
comments they may wish to submit authority.29 Exchange has prepared summaries, set
about the proposed rule change. Eduardo A. Aleman, forth in sections A, B, and C below, of
Comments may be submitted by any
Assistant Secretary. the most significant aspects of such
of the following methods:
[FR Doc. 2017–11870 Filed 6–7–17; 8:45 am] statements.
Electronic Comments BILLING CODE 8011–01–P A. Self-Regulatory Organization’s
• Use the Commission’s Internet Statement of the Purpose of, and
comment form (http://www.sec.gov/ Statutory Basis for, the Proposed Rule
rules/sro.shtml); or SECURITIES AND EXCHANGE Change
• Send an email to rule-comments@ COMMISSION
sec.gov. Please include File Number SR– 1. Purpose
[Release No. 34–80853; File No. SR–MIAX–
CBOE–2017–010 on the subject line. 2017–25] The Exchange is proposing a technical
Paper Comments change to delete obsolete Rule 521(l)(5),
Self-Regulatory Organizations; Miami Complex Order Obvious Errors, from the
• Send paper comments in triplicate International Securities Exchange LLC; Exchange’s Rules.
to Secretary, Securities and Exchange Notice of Filing and Immediate
Commission, 100 F Street NE., Background
Effectiveness of a Proposed Rule
Washington, DC 20549–1090. In 2015, the Exchange, in concert with
Change To Amend MIAX Options Rule
All submissions should refer to File the other then-existing U.S. options
Numbers SR–CBOE–2017–010. This file 521, Nullification and Adjustment of
Options Transactions Including exchanges, adopted harmonized rules
number should be included on the related to the adjustment and
subject line if email is used. To help the Obvious Errors
nullification of erroneous options
Commission process and review your June 2, 2017. transactions and coordination among
comments more efficiently, please use Pursuant to the provisions of Section the Exchanges in connection with large-
only one method. The Commission will 19(b)(1) of the Securities Exchange Act scale events involving erroneous
post all comments on the Commission’s of 1934 (‘‘Act’’) 1 and Rule 19b–4 options transactions.3 The Exchange
Internet Web site (http://www.sec.gov/ thereunder,2 notice is hereby given that believes that the changes the options
rules/sro.shtml). Copies of the on May 30, 2017, Miami International exchanges implemented with the new,
submission, all subsequent Securities Exchange, LLC (‘‘MIAX harmonized rule have led to increased
amendments, all written statements Options’’ or ‘‘Exchange’’) filed with the transparency and finality with respect to
with respect to the proposed rule Securities and Exchange Commission the adjustment and nullification of
change that are filed with the (‘‘Commission’’) a proposed rule change erroneous options transactions.
Commission, and all written as described in Items I and II below, However, as part of that initiative, the
communications relating to the which Items have been prepared by the Exchange and other options exchanges
proposed rule change between the Exchange. The Commission is deferred a few specific matters for
Commission and any person, other than publishing this notice to solicit further discussion, among them the
those that may be withheld from the comments on the proposed rule change manner in which erroneous transactions
public in accordance with the from interested persons. in complex orders would be handled.
provisions of 5 U.S.C. 552, will be In October, 2016, the Commission
available for Web site viewing and I. Self-Regulatory Organization’s approved a proposed rule change that
printing in the Commission’s Public Statement of the Terms of Substance of permitted the Exchange to adopt new
Reference Room, 100 F Street NE., the Proposed Rule Change rules to govern the trading of complex
Washington, DC 20549, on official The Exchange is filing a proposal to orders (the ‘‘Complex Orders Filing’’).4
business days between the hours of make a technical amendment to Among the rules adopted in the
10:00 a.m. and 3:00 p.m. Copies of these Exchange Rule 521, Nullification and Complex Orders Filing was Rule
filings also will be available for Adjustment of Options Transactions 521(l)(5), Complex Order Obvious
inspection and copying at the principal including Obvious Errors. Errors, which was not included in the
office of the Exchange. All comments The text of the proposed rule change industry-wide, harmonized rules
received will be posted without change;
asabaliauskas on DSKBBXCHB2PROD with NOTICES
is available on the Exchange’s Web site described above.5 Rule 521(l)(5) governs
at http://www.miaxoptions.com/rule- the handling of complex orders in
1975, Public Law 94–29 (June 4, 1975), grants the
Commission flexibility to determine what type of filings, at MIAX’s principal office, and
proceeding—either oral or notice and opportunity at the Commission’s Public Reference 3 See Securities Exchange Act Release No. 74918
for written comments—is appropriate for Room. (May 8, 2015), 80 FR 27781 (May 14, 2015) (SR–
consideration of a particular proposal by a self- MIAX–2015–35).
4 See Securities Exchange Act Release No. 79072
regulatory organization. See Securities Act
29 17 CFR 200.30–3(a)(57).
Amendments of 1975, Senate Comm. on Banking, (October 7, 2016), 81 FR 71131 (October 14, 2016)
1 15 U.S.C. 78s(b)(1). (SR–MIAX–2016–26).
Housing & Urban Affairs, S. Rep. No. 75, 94th
Cong., 1st Sess. 30 (1975). 2 17 CFR 240.19b–4. 5 See supra note 3.
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Document Created: 2018-11-14 10:06:54
Document Modified: 2018-11-14 10:06:54
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 82 FR 26724 |
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