82_FR_28842 82 FR 28722 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Quote Mitigation

82 FR 28722 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Quote Mitigation

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 120 (June 23, 2017)

Page Range28722-28724
FR Document2017-13105

Federal Register, Volume 82 Issue 120 (Friday, June 23, 2017)
[Federal Register Volume 82, Number 120 (Friday, June 23, 2017)]
[Notices]
[Pages 28722-28724]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-13105]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80974; File No. SR-MRX-2017-09]


Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Regarding Quote 
Mitigation

June 19, 2017.
    Pursuant to 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 June 15, 2017, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II, and III, below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend MRX Rule 804(h), regarding quote 
mitigation.
    The text of the proposed rule change is available on the Exchange's 
Web site at www.ise.com, at the principal office of the Exchange, 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 MRX Rule 804, entitled ``Market 
Maker Quotations,'' to specifically amend Rule 804(h) which addresses 
the Exchange's quote traffic mitigation plan to adopt a similar quote 
mitigation plan to that of NASDAQ PHLX LLC (``Phlx'').
    ISE Mercury, LLC (now known as MRX) implemented its quote 
mitigation plan in 2013, at the time it filed its Form 1 
application.\3\ At that time, MRX adopted the same quote mitigation 
plan that was in effect on ISE.\4\
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    \3\ See Securities Exchange Release Act. No.76998 (January 29, 
2016), 81 FR 6066 (February 4, 2016) (File No. 10-221) (In the 
Matter of the Application of ISE Mercury, LLC for Registration as a 
National Securities Exchange; Findings, Opinion, and Order of the 
Commission). This pilot has since been extended several times.
    \4\ See Securities Exchange Release Act. No. 55161 (February 1, 
2007), 72 FR 4754 (January 24, 2007) (SR-ISE-2006-62) (Order 
Granting Approval to Proposed Rule Change as Modified by Amendment 
Nos. 1 and 2 Thereto, To Implement a Penny Pilot Program To Quote 
Certain Options in Pennies).
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    MRX Rule 804(h) provides that MRX shall utilize a mechanism so that 
newly-received quotations and other changes to the Exchange's best bid 
and offer are not disseminated for a period of up to,

[[Page 28723]]

but not more than one second. With the upcoming planned migration to 
INET,\5\ the Exchange proposes to utilize a plan similar to that of 
Phlx for quote mitigation. The Exchange proposes to amend Rule 804(h) 
to adopt language similar to Phlx. Since 2007, Phlx has operated on 
INET, the same system that MRX will be migrating to utilize.
---------------------------------------------------------------------------

    \5\ See SR-MRX-2017-02 (not yet published). The Commission notes 
that MRX-2017-02 was published for comment in the Federal Register 
on June 5, 2017. See Securities Exchange Act Release No. 80815 (May 
30, 2017), 82 FR 25827.
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    Phlx Rule 1082(a)(ii)(C) sets forth the conditions under which Phlx 
disseminates updated quotations based on changes in the Exchange's 
disseminated price and/or size. Phlx disseminates an updated bid and 
offer price, together with the size associated with such bid and offer, 
when: (1) Phlx's disseminated bid or offer price increases or 
decreases; (2) the size associated with Phlx's disseminated bid or 
offer decreases; or (3) the size associated with Phlx's bid (offer) 
increases by an amount greater than or equal to a percentage (never to 
exceed 20%) \6\ of the size associated with the previously disseminated 
bid (offer). Such percentage, which would never exceed 20%, would be 
determined on an issue-by-issue basis by the Exchange and announced to 
membership via an Exchange circular. The percentage size increase 
necessary to give rise to a refreshed quote may vary from issue to 
issue, depending, without limitation, on the liquidity, average volume, 
and average number of quotations submitted in the issue. The mitigation 
would apply to all options traded on MRX.
---------------------------------------------------------------------------

    \6\ Phlx has set its percentage to 10%. See http://www.nasdaqtrader.com/content/phlxmemos/2007/jan/0197-07.pdf.
---------------------------------------------------------------------------

    The Exchange will not be adopting Phlx Rule 1082(a)(ii)(C)(4). This 
functionality is not necessary on INET. Phlx adopted 1082(a)(ii)(C)(4) 
when it was not operating on INET, with its subsequent replatform to 
INET functionality, 1082(a)(ii)(C)(4) was no longer necessary because 
of the real-time features which exist on INET. The INET functionality 
rendered the rule text in 1082(a)(ii)(C)(4) as unnecessary.
    The Exchange will begin a system migration to Nasdaq INET in Q3 of 
2017.\7\ The migration will be on a symbol by symbol basis as specified 
by the Exchange in a notice to Members. The Exchange is proposing to 
implement this rule change once all symbols have migrated to INET.
---------------------------------------------------------------------------

    \7\ See SR-MRX-2017-02 (not yet published). The Commission notes 
that MRX-2017-02 was published for comment in the Federal Register 
on June 5, 2017. See Securities Exchange Act Release No. 80815 (May 
30, 2017), 82 FR 25827.
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    Upon completion of the migration to INET, MRX will set an initial 
percentage of 3% to be applied to all issues, which will be announced 
in an Options Trader Alert. MRX will continue to monitor the quote 
activity on the market and would not notify participants of any 
incremental increase in the size of the Exchange's quote to be 
disseminated to OPRA.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ in particular, in that it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general to protect investors and the public interest, 
by reducing the number of options quotations required to be submitted 
to OPRA and, therefore, mitigating the Exchange's quote message traffic 
and capacity. By adopting a quote mitigation plan similar to Phlx, the 
Exchange will continue to mitigate quotes and monitor its quote 
capacity, as is the case today. While the Phlx method differs from that 
of MRX's rule, the Exchange believes that Phlx's method today 
successfully mitigates quotes on that market. In addition, MRX desires 
to adopt a similar mitigation as currently utilized by its affiliated 
market, as it will operate on the same architecture.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Phlx quote mitigation process has been in place since 2007. 
Phlx is operating on the INET system today, the same system that MRX 
will migrate to for its operating system. The Exchange believes that 
Phlx's quote mitigation process has successfully controlled Phlx's 
quote capacity. The Exchange believes that it is reasonable to utilize 
a similar process as Phlx to mitigate quotes for MRX given the system 
architecture which will be utilized on MRX with the upcoming migration. 
Additionally, Nasdaq, Inc., a common parent to Phlx and MRX, has 
experience with this quote mitigation strategy on INET. The Exchange 
has selected to mitigate MRX at 3% to start and determine if the 
percentage will need to be adjusted thereafter. The Exchange has 
selected to mitigate MRX at 3% initially because, unlike Phlx, which is 
a mature market with various auction offerings and higher volumes, MRX 
is a not as large in volume and has fewer functional offerings, e.g., 
complex orders and floor trading. The Exchange notes that it will 
continue to monitor quotes on MRX and make adjustments as necessary.

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 not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange proposes to 
mitigate all options trading on MRX. All options exchanges have a quote 
mitigation process in place in connection with their participation in 
the Penny Pilot Program.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or 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 from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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

[[Page 28724]]

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-MRX-2017-09 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-MRX-2017-09. 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-MRX-2017-09 and should be 
submitted on or before July 14, 2017.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-13105 Filed 6-22-17; 8:45 am]
BILLING CODE 8011-01-P



                                                    28722                           Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices

                                                    appropriate in furtherance of the                       comments more efficiently, please use                  prepared by the Exchange. The
                                                    purposes of the Act. The Exchange notes                 only one method. The Commission will                   Commission is publishing this notice to
                                                    that the proposed rule change                           post all comments on the Commission’s                  solicit comments on the proposed rule
                                                    implements Section 11.5 of the CAT                      Internet Web site (http://www.sec.gov/                 change from interested persons.
                                                    NMS Plan approved by the Commission,                    rules/sro.shtml). Copies of the
                                                                                                                                                                   I. Self-Regulatory Organization’s
                                                    and is designed to assist the Exchange                  submission, all subsequent
                                                                                                                                                                   Statement of the Terms of Substance of
                                                    in meeting its regulatory obligations                   amendments, all written statements
                                                                                                                                                                   the Proposed Rule Change
                                                    pursuant to the Plan. Similarly, all                    with respect to the proposed rule
                                                    national securities exchanges and                       change that are filed with the                            The Exchange proposes to amend
                                                    FINRA are proposing this proposed rule                  Commission, and all written                            MRX Rule 804(h), regarding quote
                                                    to implement the requirements of the                    communications relating to the                         mitigation.
                                                    CAT NMS Plan. Therefore, this is not a                  proposed rule change between the                          The text of the proposed rule change
                                                    competitive rule filing and, therefore, it              Commission and any person, other than                  is available on the Exchange’s Web site
                                                    does not raise competition issues                       those that may be withheld from the                    at www.ise.com, at the principal office
                                                    between and among the exchanges and                     public in accordance with the                          of the Exchange, and at the
                                                    FINRA.                                                  provisions of 5 U.S.C. 552, will be                    Commission’s Public Reference Room.
                                                                                                            available for Web site viewing and                     II. Self-Regulatory Organization’s
                                                    C. Self-Regulatory Organization’s                       printing in the Commission’s Public
                                                    Statement on Comments on the                                                                                   Statement of the Purpose of, and
                                                                                                            Reference Room, 100 F Street NE.,                      Statutory Basis for, the Proposed Rule
                                                    Proposed Rule Change Received From                      Washington, DC 20549, on official
                                                    Members, Participants, or Others                                                                               Change
                                                                                                            business days between the hours of
                                                      No written comments were either                       10:00 a.m. and 3:00 p.m. Copies of the                    In its filing with the Commission, the
                                                    solicited or received.                                  filing also will be available for                      Exchange included statements
                                                                                                            inspection and copying at the principal                concerning the purpose of and basis for
                                                    III. Date of Effectiveness of the                       office of the Exchange. All comments                   the proposed rule change and discussed
                                                    Proposed Rule Change and Timing for                     received will be posted without change;                any comments it received on the
                                                    Commission Action                                       the Commission does not edit personal                  proposed rule change. The text of these
                                                       Within 45 days of the date of                        identifying information from                           statements may be examined at the
                                                    publication of this notice in the Federal               submissions. You should submit only                    places specified in Item IV below. The
                                                    Register or within such longer period                   information that you wish to make                      Exchange has prepared summaries, set
                                                    up to 90 days (i) as the Commission may                 available publicly. All submissions                    forth in sections A, B, and C below, of
                                                    designate if it finds such longer period                should refer to File Number SR–PHLX–                   the most significant aspects of such
                                                    to be appropriate and publishes its                     2017–47, and should be submitted on or                 statements.
                                                    reasons for so finding or (ii) as to which              before July 14, 2017.                                  A. Self-Regulatory Organization’s
                                                    the Exchange consents, the Commission                     For the Commission, by the Division of               Statement of the Purpose of, and
                                                    will:                                                   Trading and Markets, pursuant to delegated             Statutory Basis for, the Proposed Rule
                                                       (A) by order approve or disapprove                   authority.21                                           Change
                                                    such proposed rule change, or                           Eduardo A. Aleman,
                                                       (B) institute proceedings to determine                                                                      1. Purpose
                                                                                                            Assistant Secretary.
                                                    whether the proposed rule change                        [FR Doc. 2017–13098 Filed 6–22–17; 8:45 am]               The Exchange proposes to amend
                                                    should be disapproved.                                                                                         MRX Rule 804, entitled ‘‘Market Maker
                                                                                                            BILLING CODE 8011–01–P
                                                    IV. Solicitation of Comments                                                                                   Quotations,’’ to specifically amend Rule
                                                                                                                                                                   804(h) which addresses the Exchange’s
                                                      Interested persons are invited to                                                                            quote traffic mitigation plan to adopt a
                                                                                                            SECURITIES AND EXCHANGE
                                                    submit written data, views, and                                                                                similar quote mitigation plan to that of
                                                                                                            COMMISSION
                                                    arguments concerning the foregoing,                                                                            NASDAQ PHLX LLC (‘‘Phlx’’).
                                                    including whether the proposed rule                     [Release No. 34–80974; File No. SR–MRX–                   ISE Mercury, LLC (now known as
                                                    change is consistent with the Act.                      2017–09]
                                                                                                                                                                   MRX) implemented its quote mitigation
                                                    Comments may be submitted by any of                                                                            plan in 2013, at the time it filed its Form
                                                    the following methods:                                  Self-Regulatory Organizations; Nasdaq
                                                                                                            MRX, LLC; Notice of Filing and                         1 application.3 At that time, MRX
                                                    Electronic Comments                                     Immediate Effectiveness of Proposed                    adopted the same quote mitigation plan
                                                                                                            Rule Change Regarding Quote                            that was in effect on ISE.4
                                                      • Use the Commission’s Internet                                                                                 MRX Rule 804(h) provides that MRX
                                                    comment form (http://www.sec.gov/                       Mitigation
                                                                                                                                                                   shall utilize a mechanism so that newly-
                                                    rules/sro.shtml); or                                    June 19, 2017.                                         received quotations and other changes
                                                      • Send an email to rule-comments@                        Pursuant to Section 19(b)(1) of the                 to the Exchange’s best bid and offer are
                                                    sec.gov. Please include File Number SR–                 Securities Exchange Act of 1934                        not disseminated for a period of up to,
                                                    PHLX–2017–47 on the subject line.                       (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                    Paper Comments                                          notice is hereby given that on June 15,                   3 See Securities Exchange Release Act. No.76998

                                                                                                            2017, Nasdaq MRX, LLC (‘‘MRX’’ or                      (January 29, 2016), 81 FR 6066 (February 4, 2016)
                                                      • Send paper comments in triplicate
asabaliauskas on DSKBBXCHB2PROD with NOTICES




                                                                                                                                                                   (File No. 10–221) (In the Matter of the Application
                                                                                                            ‘‘Exchange’’) filed with the Securities                of ISE Mercury, LLC for Registration as a National
                                                    to Secretary, Securities and Exchange                   and Exchange Commission                                Securities Exchange; Findings, Opinion, and Order
                                                    Commission, 100 F Street NE.,                           (‘‘Commission’’) the proposed rule                     of the Commission). This pilot has since been
                                                    Washington, DC 20549–1090.                              change as described in Items I, II, and                extended several times.
                                                    All submissions should refer to File                    III, below, which Items have been                         4 See Securities Exchange Release Act. No. 55161

                                                    Number SR–PHLX–2017–47. This file                                                                              (February 1, 2007), 72 FR 4754 (January 24, 2007)
                                                                                                                                                                   (SR–ISE–2006–62) (Order Granting Approval to
                                                    number should be included on the                          21 17 CFR 200.30–3(a)(12).                           Proposed Rule Change as Modified by Amendment
                                                    subject line if email is used. To help the                1 15 U.S.C. 78s(b)(1).                               Nos. 1 and 2 Thereto, To Implement a Penny Pilot
                                                    Commission process and review your                        2 17 CFR 240.19b–4.                                  Program To Quote Certain Options in Pennies).



                                               VerDate Sep<11>2014   19:21 Jun 22, 2017   Jkt 241001   PO 00000   Frm 00105   Fmt 4703   Sfmt 4703   E:\FR\FM\23JNN1.SGM   23JNN1


                                                                                    Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices                                                         28723

                                                    but not more than one second. With the                  implement this rule change once all                      functional offerings, e.g., complex
                                                    upcoming planned migration to INET,5                    symbols have migrated to INET.                           orders and floor trading. The Exchange
                                                    the Exchange proposes to utilize a plan                   Upon completion of the migration to                    notes that it will continue to monitor
                                                    similar to that of Phlx for quote                       INET, MRX will set an initial percentage                 quotes on MRX and make adjustments
                                                    mitigation. The Exchange proposes to                    of 3% to be applied to all issues, which                 as necessary.
                                                    amend Rule 804(h) to adopt language                     will be announced in an Options Trader
                                                                                                            Alert. MRX will continue to monitor the                  B. Self-Regulatory Organization’s
                                                    similar to Phlx. Since 2007, Phlx has                                                                            Statement on Burden on Competition
                                                    operated on INET, the same system that                  quote activity on the market and would
                                                    MRX will be migrating to utilize.                       not notify participants of any                             The Exchange does not believe that
                                                                                                            incremental increase in the size of the                  the proposed rule change will impose
                                                       Phlx Rule 1082(a)(ii)(C) sets forth the              Exchange’s quote to be disseminated to                   any burden on competition not
                                                    conditions under which Phlx                             OPRA.                                                    necessary or appropriate in furtherance
                                                    disseminates updated quotations based                                                                            of the purposes of the Act. The
                                                    on changes in the Exchange’s                            2. Statutory Basis                                       Exchange proposes to mitigate all
                                                    disseminated price and/or size. Phlx                       The Exchange believes that its                        options trading on MRX. All options
                                                    disseminates an updated bid and offer                   proposal is consistent with Section 6(b)                 exchanges have a quote mitigation
                                                    price, together with the size associated                of the Act,8 in general, and furthers the                process in place in connection with
                                                    with such bid and offer, when: (1)                      objectives of Section 6(b)(5) of the Act,9               their participation in the Penny Pilot
                                                    Phlx’s disseminated bid or offer price                  in particular, in that it is designed to                 Program.
                                                    increases or decreases; (2) the size                    promote just and equitable principles of
                                                    associated with Phlx’s disseminated bid                 trade, to remove impediments to and                      C. Self-Regulatory Organization’s
                                                    or offer decreases; or (3) the size                     perfect the mechanism of a free and                      Statement on Comments on the
                                                    associated with Phlx’s bid (offer)                      open market and a national market                        Proposed Rule Change Received From
                                                    increases by an amount greater than or                  system, and, in general to protect                       Members, Participants, or Others
                                                    equal to a percentage (never to exceed                  investors and the public interest, by                      No written comments were either
                                                    20%) 6 of the size associated with the                  reducing the number of options                           solicited or received.
                                                    previously disseminated bid (offer).                    quotations required to be submitted to                   III. Date of Effectiveness of the
                                                    Such percentage, which would never                      OPRA and, therefore, mitigating the                      Proposed Rule Change and Timing for
                                                    exceed 20%, would be determined on                      Exchange’s quote message traffic and                     Commission Action
                                                    an issue-by-issue basis by the Exchange                 capacity. By adopting a quote mitigation
                                                    and announced to membership via an                      plan similar to Phlx, the Exchange will                     Because the foregoing proposed rule
                                                    Exchange circular. The percentage size                  continue to mitigate quotes and monitor                  change does not: (i) Significantly affect
                                                                                                            its quote capacity, as is the case today.                the protection of investors or the public
                                                    increase necessary to give rise to a
                                                                                                            While the Phlx method differs from that                  interest; (ii) impose any significant
                                                    refreshed quote may vary from issue to
                                                                                                            of MRX’s rule, the Exchange believes                     burden on competition; and (iii) become
                                                    issue, depending, without limitation, on
                                                                                                            that Phlx’s method today successfully                    operative for 30 days from the date on
                                                    the liquidity, average volume, and
                                                                                                            mitigates quotes on that market. In                      which it was filed, or such shorter time
                                                    average number of quotations submitted
                                                                                                            addition, MRX desires to adopt a similar                 as the Commission may designate, it has
                                                    in the issue. The mitigation would                                                                               become effective pursuant to Section
                                                    apply to all options traded on MRX.                     mitigation as currently utilized by its
                                                                                                            affiliated market, as it will operate on                 19(b)(3)(A)(iii) of the Act 10 and
                                                       The Exchange will not be adopting                                                                             subparagraph (f)(6) of Rule 19b–4
                                                                                                            the same architecture.
                                                    Phlx Rule 1082(a)(ii)(C)(4). This                          The Phlx quote mitigation process has                 thereunder.11
                                                    functionality is not necessary on INET.                 been in place since 2007. Phlx is                           At any time within 60 days of the
                                                    Phlx adopted 1082(a)(ii)(C)(4) when it                  operating on the INET system today, the                  filing of the proposed rule change, the
                                                    was not operating on INET, with its                     same system that MRX will migrate to                     Commission summarily may
                                                    subsequent replatform to INET                           for its operating system. The Exchange                   temporarily suspend such rule change if
                                                    functionality, 1082(a)(ii)(C)(4) was no                 believes that Phlx’s quote mitigation                    it appears to the Commission that such
                                                    longer necessary because of the real-                   process has successfully controlled                      action is: (i) Necessary or appropriate in
                                                    time features which exist on INET. The                  Phlx’s quote capacity. The Exchange                      the public interest; (ii) for the protection
                                                    INET functionality rendered the rule                    believes that it is reasonable to utilize a              of investors; or (iii) otherwise in
                                                    text in 1082(a)(ii)(C)(4) as unnecessary.               similar process as Phlx to mitigate                      furtherance of the purposes of the Act.
                                                       The Exchange will begin a system                     quotes for MRX given the system                          If the Commission takes such action, the
                                                    migration to Nasdaq INET in Q3 of                       architecture which will be utilized on                   Commission shall institute proceedings
                                                    2017.7 The migration will be on a                       MRX with the upcoming migration.                         to determine whether the proposed rule
                                                    symbol by symbol basis as specified by                  Additionally, Nasdaq, Inc., a common                     should be approved or disapproved.
                                                    the Exchange in a notice to Members.                    parent to Phlx and MRX, has experience                   IV. Solicitation of Comments
                                                    The Exchange is proposing to                            with this quote mitigation strategy on                     Interested persons are invited to
                                                                                                            INET. The Exchange has selected to                       submit written data, views, and
                                                      5 See SR–MRX–2017–02 (not yet published). The         mitigate MRX at 3% to start and                          arguments concerning the foregoing,
                                                    Commission notes that MRX–2017–02 was                   determine if the percentage will need to
                                                    published for comment in the Federal Register on                                                                 including whether the proposed rule
asabaliauskas on DSKBBXCHB2PROD with NOTICES




                                                    June 5, 2017. See Securities Exchange Act Release
                                                                                                            be adjusted thereafter. The Exchange
                                                    No. 80815 (May 30, 2017), 82 FR 25827.                  has selected to mitigate MRX at 3%                         10 15  U.S.C. 78s(b)(3)(A)(iii).
                                                      6 Phlx has set its percentage to 10%. See http://     initially because, unlike Phlx, which is                   11 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                                    www.nasdaqtrader.com/content/phlxmemos/2007/            a mature market with various auction                     4(f)(6) requires a self-regulatory organization to give
                                                    jan/0197-07.pdf.                                        offerings and higher volumes, MRX is a                   the Commission written notice of its intent to file
                                                      7 See SR–MRX–2017–02 (not yet published). The                                                                  the proposed rule change at least five business days
                                                    Commission notes that MRX–2017–02 was
                                                                                                            not as large in volume and has fewer                     prior to the date of filing of the proposed rule
                                                    published for comment in the Federal Register on                                                                 change, or such shorter time as designated by the
                                                                                                              8 15   U.S.C. 78f(b).
                                                    June 5, 2017. See Securities Exchange Act Release                                                                Commission. The Exchange has satisfied this
                                                    No. 80815 (May 30, 2017), 82 FR 25827.                    9 15   U.S.C. 78f(b)(5).                               requirement.



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                                                    28724                             Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices

                                                    change is consistent with the Act.                        SECURITIES AND EXCHANGE                                Officer, Securities and Exchange
                                                    Comments may be submitted by any of                       COMMISSION                                             Commission, c/o Remi Pavlik-Simon,
                                                    the following methods:                                                                                           100 F Street NE., Washington, DC 20549
                                                                                                              [SEC File No. 270–1, OMB Control No. 3235–
                                                                                                              0007]
                                                                                                                                                                     or send an email to: PRA_Mailbox@
                                                    Electronic Comments                                                                                              sec.gov. Comments must be submitted to
                                                      • Use the Commission’s Internet                         Submission for OMB Review;                             OMB within 30 days of this notice.
                                                    comment form (http://www.sec.gov/                         Comment Request                                          Dated: June 2017.
                                                    rules/sro.shtml); or                                      Upon Written Request Copies Available                  Eduardo A. Aleman,
                                                      • Send an email to rule-comments@                        From: Securities and Exchange                         Assistant Secretary.
                                                    sec.gov. Please include File Number SR–                    Commission, Office of FOIA Services,                  [FR Doc. 2017–13141 Filed 6–22–17; 8:45 am]
                                                    MRX–2017–09 on the subject line.                           100 F Street NE., Washington, DC                      BILLING CODE 8011–01–P
                                                                                                               20549–02736.
                                                    Paper Comments
                                                                                                              Extension:
                                                                                                                                                                     SECURITIES AND EXCHANGE
                                                      • Send paper comments in triplicate                       Rule 13e–3 (Schedule 13E–3).
                                                                                                                                                                     COMMISSION
                                                    to Secretary, Securities and Exchange                        Notice is hereby given that, pursuant
                                                    Commission, 100 F Street NE.,                             to the Paperwork Reduction Act of 1995                 [Release No. 34–80973; File No. SR–FINRA–
                                                    Washington, DC 20549–1090.                                                                                       2017–009]
                                                                                                              (44 U.S.C. 3501 et seq.), the Securities
                                                    All submissions should refer to File                      and Exchange Commission                                Self-Regulatory Organizations;
                                                    Number SR–MRX–2017–09. This file                          (‘‘Commission’’) has submitted to the                  Financial Industry Regulatory
                                                    number should be included on the                          Office of Management and Budget this                   Authority, Inc.; Order Approving a
                                                    subject line if email is used. To help the                request for extension of the previously                Proposed Rule Change Relating to
                                                    Commission process and review your                        approved collection of information                     Expediting List Selection in Arbitration
                                                    comments more efficiently, please use                     discussed below.
                                                    only one method. The Commission will                         Rule 13e–3 (17 CFR 240.13e–3) and                   June 19, 2017.
                                                                                                              Schedule 13E–3 (17 CFR 240.13e–
                                                    post all comments on the Commission’s                                                                            I. Introduction
                                                                                                              100)—Rule 13e–3 prescribes the filing,
                                                    Internet Web site (http://www.sec.gov/                                                                              On April 26, 2017, Financial Industry
                                                                                                              disclosure and dissemination
                                                    rules/sro.shtml). Copies of the                                                                                  Regulatory Authority, Inc. (‘‘FINRA’’)
                                                                                                              requirements in connection with a going
                                                    submission, all subsequent                                                                                       filed with the Securities and Exchange
                                                                                                              private transaction by an issuer or an
                                                    amendments, all written statements                                                                               Commission (‘‘Commission’’), pursuant
                                                                                                              affiliate. Schedule 13E–3 provides
                                                    with respect to the proposed rule                         shareholders and the marketplace with                  to Section 19(b)(1) of the Securities
                                                    change that are filed with the                            material information concerning a going                Exchange Act of 1934 (‘‘Exchange
                                                    Commission, and all written                               private transaction. The information                   Act’’) 1 and Rule 19b–4 thereunder,2 a
                                                    communications relating to the                            collected permits verification of                      proposed rule change to provide that the
                                                    proposed rule change between the                          compliance with securities laws                        Director of FINRA’s Office of Dispute
                                                    Commission and any person, other than                     requirements and ensures the public                    Resolution (‘‘ODR Director’’) will send
                                                    those that may be withheld from the                       availability and dissemination of the                  the list or lists or arbitrators generated
                                                    public in accordance with the                             collected information. This information                by the Neutral List Selection System
                                                    provisions of 5 U.S.C. 552, will be                       is made available to the public.                       (‘‘NLSS’’) to all parties at the same time,
                                                    available for Web site viewing and                        Information provided on Schedule 13E–                  within approximately 30 days after the
                                                    printing in the Commission’s Public                       3 is mandatory. We estimate that                       last answer is due, regardless of the
                                                    Reference Room, 100 F Street NE.,                         Schedule 13E–3 is filed by                             parties’ agreement to extend any answer
                                                    Washington, DC 20549, on official                         approximately 77 issuers annually and                  due date.
                                                    business days between the hours of                        it takes approximately 137.42 hours per                   The proposed rule change was
                                                    10:00 a.m. and 3:00 p.m. Copies of the                    response. We estimate that 25% of the                  published for comment in the Federal
                                                    filing also will be available for                         137.42 hours per response is prepared                  Register on May 15, 2017.3 The public
                                                    inspection and copying at the principal                   by the filer for a total annual reporting              comment period closed on June 5, 2017.
                                                    office of the Exchange. All comments                      burden of 2,646 hours (34.36 hours per                 The Commission received five comment
                                                    received will be posted without change;                   response × 77 responses).                              letters in response to the Notice, all of
                                                    the Commission does not edit personal                        An agency may not conduct or                        which supported the proposed rule
                                                    identifying information from                              sponsor, and a person is not required to               change.4 This order approves the
                                                    submissions. You should submit only                       respond to, a collection of information                proposed rule change.
                                                    information that you wish to make                         unless it displays a currently valid
                                                    available publicly. All submissions                       control number.                                          1 15  U.S.C. 78s(b)(1).
                                                    should refer to File Number SR–MRX–                          The public may view the background                    2 17  CFR 240.19b–4.
                                                                                                                                                                        3 See Exchange Act Release No. 80634 (May 9,
                                                    2017–09 and should be submitted on or                     documentation for this information
                                                                                                                                                                     2017), 82 FR 22363 (May 15, 2017) (File No. SR–
                                                    before July 14, 2017.                                     collection at the following Web site,                  FINRA–2017–009) (‘‘Notice’’).
                                                      For the Commission, by the Division of                  www.reginfo.gov . Comments should be                      4 See Letters from Steven B. Caruso, Maddox
asabaliauskas on DSKBBXCHB2PROD with NOTICES




                                                    Trading and Markets, pursuant to delegated                directed to: (i) Desk Officer for the                  Hargett Caruso, P.C., dated May 11, 2017 (‘‘Caruso
                                                                                                              Securities and Exchange Commission,                    Letter’’); Ryan K. Bakhtiari, Aidikoff, Uhl &
                                                    authority.12                                                                                                     Bakhtiari, dated May 15, 2017 (‘‘Bakhtiari Letter’’);
                                                    Eduardo A. Aleman,
                                                                                                              Office of Information and Regulatory                   Glenn S. Gitomer, McCausland Keen + Buckman,
                                                                                                              Affairs, Office of Management and                      dated May 26, 2017 (‘‘Gitomer Letter’’); Marnie C.
                                                    Assistant Secretary.                                      Budget, Room 10102, New Executive                      Lambert, President, Public Investors Arbitration Bar
                                                    [FR Doc. 2017–13105 Filed 6–22–17; 8:45 am]               Office Building, Washington, DC 20503,                 Association (‘‘PIABA’’), dated June 1, 2017 (‘‘PIABA
                                                                                                                                                                     Letter’’); Andres Gomez III, Esquire, Executive
                                                    BILLING CODE 8011–01–P                                    or by sending an email to: Shagufta_                   Principal, AG Consultants, dated June 4, 2017
                                                                                                              Ahmed@omb.eop.gov; and (ii) Pamela                     (‘‘Gomez Letter’’). Comment letters are available at
                                                      12 17   CFR 200.30–3(a)(12).                            Dyson, Director/Chief Information                      www.sec.gov.



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Document Created: 2017-06-23 03:37:40
Document Modified: 2017-06-23 03:37:40
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 28722 

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