82 FR 43597 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Remove Language From Chapter 19 of the Rulebook

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 179 (September 18, 2017)

[Federal Register Volume 82, Number 179 (Monday, September 18, 2017)]
[Notices]
[Pages 43597-43598]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-19806]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81597; File No. SR-MRX-2017-17]


Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Remove Language 
From Chapter 19 of the Rulebook

September 13, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 31, 2017, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the Exchange. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to remove language from Chapter 19 related to 
a systems issue that has been resolved with the completed migration of 
the Exchange to Nasdaq INET.
    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 purpose of the proposed rule change is to remove language from 
Chapter 19 related to a systems issue that has been resolved with the 
completed migration of the Exchange to Nasdaq INET. On June 6, 2017, 
the Exchange filed a proposed rule change to amend Chapter 19 to notify 
members of a systems issue related to allocations made pursuant to 
Supplementary Material .02(a)-(b) to Rule 1901 (``Flash auction'').\3\ 
As explained in that proposed rule change, due to a systems issue, 
Flash auction allocations pursuant to Supplementary Material .02(a)-(b) 
to Rule 1901 were not being provided as described in that rule, and 
instead Primary Market Maker quotes were being given a Flash auction 
allocation pursuant to Supplementary Material .01(b)-(c) to Rule 713 
after Priority Customer Orders on the book, and ahead of Responses, 
Professional Orders, and other market maker quotes. This systems issue 
has been resolved with the Exchange's migration to Nasdaq INET, which 
was completed on Monday, August 21, 2017. As all symbols are now 
trading on INET, contracts executed in a Flash auction will be 
allocated correctly pursuant to Supplementary Material .02 to Rule 
1901. The Exchange therefore proposes to remove the language described 
above from its rulebook.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 80965 (June 19, 
2017), 82 FR 28716 (June 23, 2017) (SR-MRX-2017-07).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6(b) of the Act.\4\ In 
particular, the proposal is consistent with Section 6(b)(5) of the 
Act,\5\ because is designed to promote just and equitable principles of 
trade, remove impediments to and perfect the mechanisms of a free and 
open market and a national market system and, in general, to protect 
investors and the public interest. The Exchange believes that the 
proposed rule change is consistent with the protection of investors and 
the public interest because the systems issue described in Chapter 19 
has been resolved. Due to a systems issue, allocations in the Flash 
auction were not being done in the manner described in Supplementary 
Material .02(a)-(b) to Rule 1901. As a temporary measure, the Exchange 
therefore added language to that effect to Chapter 19. With the 
migration of the Exchange's trading system to Nasdaq INET, this systems 
issue has been eliminated, and the Exchange therefore believes that it 
is appropriate to remove this language from Chapter 19.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\6\ the Exchange does 
not believe that the proposed rule change will impose any burden on 
intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed 
rule change eliminates outdated text reflecting a systems issue related 
to Flash auction allocations, and is not designed to have any 
competitive impact.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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 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

[[Page 43598]]

19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of 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.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \9\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \10\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay. The 
Exchange states that waiver of the operative delay is consistent with 
the protection of investors and the public interest as it will allow 
the Exchange to immediately remove outdated language from Chapter 19 
and thereby avoid member confusion about how Flash auction allocations 
are performed on the Exchange. The Commission believes the waiver of 
the operative delay is consistent with the protection of investors and 
the public interest. Accordingly, the Commission hereby waives the 
operative delay and designates the proposed rule change operative upon 
filing.\11\
---------------------------------------------------------------------------

    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic 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-2017-17 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-MRX-2017-17. 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 such 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-2017-17, and should be 
submitted on or before October 10, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19806 Filed 9-15-17; 8:45 am]
 BILLING CODE 8011-01-P