82_FR_61304 82 FR 61058 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX Options Rule 510 To Extend the Penny Pilot Program

82 FR 61058 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX Options Rule 510 To Extend the Penny Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 246 (December 26, 2017)

Page Range61058-61060
FR Document2017-27694

Federal Register, Volume 82 Issue 246 (Tuesday, December 26, 2017)
[Federal Register Volume 82, Number 246 (Tuesday, December 26, 2017)]
[Notices]
[Pages 61058-61060]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-27694]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82354; File No. SR-MIAX-2017-48]


Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend MIAX Options Rule 510 To Extend the Penny 
Pilot Program

December 19, 2017.
    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on December 11, 2017, Miami International 
Securities Exchange, LLC (``MIAX Options'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') a proposed rule 
change as described in Items I 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend Exchange Rule 510, 
Interpretations and Policies .01 to extend the pilot program for the 
quoting and trading of certain options in pennies.
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings, at MIAX's principal 
office, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is a participant in an industry-wide pilot program 
that provides for the quoting and trading of certain option classes in 
penny increments (the ``Penny Pilot Program'' or ``Program''). The 
Penny Pilot Program allows the quoting and trading of certain option 
classes in minimum increments of $0.01 for all series in such option 
classes with a price of less than $3.00; and in minimum increments of 
$0.05 for all series in such option classes with a price of $3.00 or 
higher. Options overlying the PowerShares QQQTM (``QQQ''), 
SPDR[supreg] S&P 500[supreg] ETF (``SPY''), and iShares[supreg] Russell 
2000 ETF (``IWM''), however, are quoted and traded in minimum 
increments of $0.01 for all series regardless of the price. The Penny 
Pilot Program was initiated at the then existing option exchanges in 
January 2007 \3\ and currently includes more than 300 of the most 
active option classes. The Penny Pilot Program is currently scheduled 
to expire on December 31, 2017.\4\ The purpose of the proposed rule 
change is to extend the Penny Pilot Program in its current format 
through June 30, 2018.
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    \3\ See Securities Exchange Act Release Nos. 55154 (January 23, 
2007), 72 FR 4743 (February 1, 2007) (SR-CBOE-2006-92); 55161 
(January 24, 2007), 72 FR 4754 (February 1, 2007) (SR-ISE-2006-62); 
54886 (December 6, 2006), 71 FR 74979 (December 13, 2006) (SR-Phlx-
2006-74); 54590 (October 12, 2006), 71 FR 61525 (October 18, 2006) 
(SR-NYSEArca-2006-73); and 54741 (November 9, 2006), 71 FR 67176 
(November 20, 2006) (SR-Amex-2006-106).
    \4\ See Securities Exchange Act Release No. 80757 (May 24, 
2017), 82 FR 25032 (May 31, 2017) (SR-MIAX-2017-23) (extending the 
Penny Pilot Program from June 30, 2017, to December 31, 2017).
---------------------------------------------------------------------------

    In addition to the extension of the Penny Pilot Program through 
June 30, 2018, the Exchange proposes to extend one other date in the 
Rule. Currently,

[[Page 61059]]

Interpretations and Policies .01 states that the Exchange will replace 
any Penny Pilot issues that have been delisted with the next most 
actively traded multiply listed option classes that are not yet 
included in the Penny Pilot Program, and that the replacement issues 
will be selected based on trading activity in the previous six months. 
Such option classes will be added to the Penny Pilot Program on the 
second trading day following July 1, 2017.\5\ Because this date has 
expired and the Exchange intends to continue this practice for the 
duration of the Penny Pilot Program, the Exchange is proposing to amend 
the Rule to reflect that such option classes will be added to the Penny 
Pilot Program on the second trading day following January 1, 2018.
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    \5\ The month immediately preceding a replacement class's 
addition to the Pilot Program (i.e., June) is not used for purposes 
of the six-month analysis. For example, a replacement added on the 
second trading day following January 1, 2018, will be identified 
based on trading activity from June 1, 2017, through November 30, 
2017.
---------------------------------------------------------------------------

    The purpose of this provision is to reflect the new date on which 
replacement issues may be added to the Penny Pilot Program.
2. Statutory Basis
    MIAX believes that its proposed rule change is consistent with 
Section 6(b) of the Act \6\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act \7\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanisms of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the proposed rule change, which extends the Penny 
Pilot Program for six months, allows the Exchange to continue to 
participate in a program that has been viewed as beneficial to traders, 
investors and public customers and viewed as successful by the other 
options exchanges participating in it.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Specifically, the Exchange 
believes that, by extending the expiration of the Pilot Program, the 
proposed rule change will allow for further analysis of the Penny Pilot 
Program and a determination of how the Program should be structured in 
the future. In doing so, the proposed rule change will also serve to 
promote regulatory clarity and consistency, thereby reducing burdens on 
the marketplace, facilitating investor protection, and fostering a 
competitive environment. In addition, consistent with previous 
practices, the Exchange believes the other options exchanges will be 
filing similar extensions of the Penny Pilot Program.

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

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
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 prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing.\11\ However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the 
Commission may 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 so that 
the proposal may become operative immediately upon filing. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because doing so will allow the Pilot Program to continue without 
interruption in a manner that is consistent with the Commission's prior 
approval of the extension and expansion of the Pilot Program and will 
allow the Exchange and the Commission additional time to analyze the 
impact of the Pilot Program.\13\ Accordingly, the Commission designates 
the proposed rule change as operative upon filing with the 
Commission.\14\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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. The 
Exchange has satisfied this pre-filing requirement.
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ See Securities Exchange Act Release No. 61061 (November 24, 
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
    \14\ For purposes only of waiving the operative delay for this 
proposal, the Commission has 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 such 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 under 
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-MIAX-2017-48 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MIAX-2017-48. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your

[[Page 61060]]

comments more efficiently, please use only one method. The Commission 
will post all comments on the Commission's internet website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly.
    All submissions should refer to File Number SR-MIAX-2017-48 and 
should be submitted on or before January 16, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-27694 Filed 12-22-17; 8:45 am]
 BILLING CODE 8011-01-P



                                               61058                            Federal Register / Vol. 82, No. 246 / Tuesday, December 26, 2017 / Notices

                                               temporarily suspend such rule change if                    cautioned that we do not redact or edit               II. Self-Regulatory Organization’s
                                               it appears to the Commission that such                     personal identifying information from                 Statement of the Purpose of, and
                                               action is necessary or appropriate in the                  comment submissions. You should                       Statutory Basis for, the Proposed Rule
                                               public interest, for the protection of                     submit only information that you wish                 Change
                                               investors, or otherwise in furtherance of                  to make available publicly.                             In its filing with the Commission, the
                                               the purposes of the Act. If the                              All submissions should refer to File                Exchange included statements
                                               Commission takes such action, the                          Number SR–MRX–2017–28 and should                      concerning the purpose of and basis for
                                               Commission shall institute proceedings                     be submitted on or before January 16,                 the proposed rule change and discussed
                                               under Section 19(b)(2)(B) 13 of the Act to                 2018.                                                 any comments it received on the
                                               determine whether the proposed rule
                                                                                                            For the Commission, by the Division of              proposed rule change. The text of these
                                               change should be approved or
                                                                                                          Trading and Markets, pursuant to delegated            statements may be examined at the
                                               disapproved.
                                                                                                          authority.14                                          places specified in Item IV below. The
                                               IV. Solicitation of Comments                               Eduardo A. Aleman,                                    Exchange has prepared summaries, set
                                                 Interested persons are invited to                        Assistant Secretary.                                  forth in sections A, B, and C below, of
                                               submit written data, views, and                            [FR Doc. 2017–27701 Filed 12–22–17; 8:45 am]
                                                                                                                                                                the most significant aspects of such
                                               arguments concerning the foregoing,                                                                              statements.
                                                                                                          BILLING CODE 8011–01–P
                                               including whether the proposed rule                                                                              A. Self-Regulatory Organization’s
                                               change is consistent with the Act.                                                                               Statement of the Purpose of, and
                                               Comments may be submitted by any of                        SECURITIES AND EXCHANGE                               Statutory Basis for, the Proposed Rule
                                               the following methods:                                     COMMISSION                                            Change
                                               Electronic Comments                                                                                              1. Purpose
                                                                                                          [Release No. 34–82354; File No. SR–MIAX–
                                                 • Use the Commission’s internet                          2017–48]                                                 The Exchange is a participant in an
                                               comment form (http://www.sec.gov/                                                                                industry-wide pilot program that
                                               rules/sro.shtml); or                                       Self-Regulatory Organizations; Miami                  provides for the quoting and trading of
                                                 • Send an email to rule-comments@                        International Securities Exchange LLC;                certain option classes in penny
                                               sec.gov. Please include File Number SR–                    Notice of Filing and Immediate                        increments (the ‘‘Penny Pilot Program’’
                                               MRX–2017–28 on the subject line.                           Effectiveness of a Proposed Rule                      or ‘‘Program’’). The Penny Pilot Program
                                               Paper Comments                                             Change To Amend MIAX Options Rule                     allows the quoting and trading of certain
                                                                                                          510 To Extend the Penny Pilot Program                 option classes in minimum increments
                                                  • Send paper comments in triplicate
                                               to Secretary, Securities and Exchange                                                                            of $0.01 for all series in such option
                                                                                                          December 19, 2017.
                                               Commission, 100 F Street NE,                                                                                     classes with a price of less than $3.00;
                                                                                                             Pursuant to the provisions of Section              and in minimum increments of $0.05 for
                                               Washington, DC 20549–1090.
                                                                                                          19(b)(1) of the Securities Exchange Act               all series in such option classes with a
                                               All submissions should refer to File                       of 1934 (‘‘Act’’) 1 and Rule 19b–4                    price of $3.00 or higher. Options
                                               Number SR–MRX–2017–28. This file                           thereunder,2 notice is hereby given that              overlying the PowerShares QQQTM
                                               number should be included on the                           on December 11, 2017, Miami                           (‘‘QQQ’’), SPDR® S&P 500® ETF
                                               subject line if email is used. To help the                 International Securities Exchange, LLC                (‘‘SPY’’), and iShares® Russell 2000 ETF
                                               Commission process and review your                         (‘‘MIAX Options’’ or ‘‘Exchange’’) filed              (‘‘IWM’’), however, are quoted and
                                               comments more efficiently, please use                      with the Securities and Exchange                      traded in minimum increments of $0.01
                                               only one method. The Commission will                       Commission (‘‘Commission’’) a                         for all series regardless of the price. The
                                               post all comments on the Commission’s                      proposed rule change as described in                  Penny Pilot Program was initiated at the
                                               internet website (http://www.sec.gov/                      Items I and II below, which Items have                then existing option exchanges in
                                               rules/sro.shtml).                                          been prepared by the Exchange. The
                                                  Copies of the submission, all                                                                                 January 2007 3 and currently includes
                                                                                                          Commission is publishing this notice to               more than 300 of the most active option
                                               subsequent amendments, all written
                                                                                                          solicit comments on the proposed rule                 classes. The Penny Pilot Program is
                                               statements with respect to the proposed
                                                                                                          change from interested persons.                       currently scheduled to expire on
                                               rule change that are filed with the
                                               Commission, and all written                                                                                      December 31, 2017.4 The purpose of the
                                                                                                          I. Self-Regulatory Organization’s
                                               communications relating to the                                                                                   proposed rule change is to extend the
                                                                                                          Statement of the Terms of Substance of
                                               proposed rule change between the                                                                                 Penny Pilot Program in its current
                                                                                                          the Proposed Rule Change
                                               Commission and any person, other than                                                                            format through June 30, 2018.
                                               those that may be withheld from the                           The Exchange is filing a proposal to                  In addition to the extension of the
                                               public in accordance with the                              amend Exchange Rule 510,                              Penny Pilot Program through June 30,
                                               provisions of 5 U.S.C. 552, will be                        Interpretations and Policies .01 to                   2018, the Exchange proposes to extend
                                               available for website viewing and                          extend the pilot program for the quoting              one other date in the Rule. Currently,
                                               printing in the Commission’s Public                        and trading of certain options in
                                                                                                                                                                   3 See Securities Exchange Act Release Nos. 55154
                                               Reference Room, 100 F Street NE,                           pennies.
                                                                                                                                                                (January 23, 2007), 72 FR 4743 (February 1, 2007)
                                               Washington, DC 20549, on official                             The text of the proposed rule change               (SR–CBOE–2006–92); 55161 (January 24, 2007), 72
                                               business days between the hours of                         is available on the Exchange’s website at             FR 4754 (February 1, 2007) (SR–ISE–2006–62);
                                                                                                                                                                54886 (December 6, 2006), 71 FR 74979 (December
                                               10:00 a.m. and 3:00 p.m. Copies of the                     http://www.miaxoptions.com/rule-
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                                                                                                                                                                13, 2006) (SR–Phlx–2006–74); 54590 (October 12,
                                               filing also will be available for                          filings, at MIAX’s principal office, and              2006), 71 FR 61525 (October 18, 2006) (SR–
                                               inspection and copying at the principal                    at the Commission’s Public Reference                  NYSEArca–2006–73); and 54741 (November 9,
                                               office of the Exchange. All comments                       Room.                                                 2006), 71 FR 67176 (November 20, 2006) (SR–
                                                                                                                                                                Amex–2006–106).
                                               received will be posted without change.                                                                             4 See Securities Exchange Act Release No. 80757
                                               Persons submitting comments are                              14 17 CFR 200.30–3(a)(12).                          (May 24, 2017), 82 FR 25032 (May 31, 2017) (SR–
                                                                                                            1 15 U.S.C. 78s(b)(1).                              MIAX–2017–23) (extending the Penny Pilot
                                                 13 15   U.S.C. 78s(b)(2)(B).                               2 17 CFR 240.19b–4.                                 Program from June 30, 2017, to December 31, 2017).



                                          VerDate Sep<11>2014      20:21 Dec 22, 2017   Jkt 244001   PO 00000   Frm 00111   Fmt 4703   Sfmt 4703   E:\FR\FM\26DEN1.SGM   26DEN1


                                                                           Federal Register / Vol. 82, No. 246 / Tuesday, December 26, 2017 / Notices                                                     61059

                                               Interpretations and Policies .01 states                  the Exchange believes that, by extending                become operative immediately upon
                                               that the Exchange will replace any                       the expiration of the Pilot Program, the                filing. The Commission believes that
                                               Penny Pilot issues that have been                        proposed rule change will allow for                     waiving the 30-day operative delay is
                                               delisted with the next most actively                     further analysis of the Penny Pilot                     consistent with the protection of
                                               traded multiply listed option classes                    Program and a determination of how the                  investors and the public interest
                                               that are not yet included in the Penny                   Program should be structured in the                     because doing so will allow the Pilot
                                               Pilot Program, and that the replacement                  future. In doing so, the proposed rule                  Program to continue without
                                               issues will be selected based on trading                 change will also serve to promote                       interruption in a manner that is
                                               activity in the previous six months.                     regulatory clarity and consistency,                     consistent with the Commission’s prior
                                               Such option classes will be added to the                 thereby reducing burdens on the                         approval of the extension and expansion
                                               Penny Pilot Program on the second                        marketplace, facilitating investor                      of the Pilot Program and will allow the
                                               trading day following July 1, 2017.5                     protection, and fostering a competitive                 Exchange and the Commission
                                               Because this date has expired and the                    environment. In addition, consistent                    additional time to analyze the impact of
                                               Exchange intends to continue this                        with previous practices, the Exchange                   the Pilot Program.13 Accordingly, the
                                               practice for the duration of the Penny                   believes the other options exchanges                    Commission designates the proposed
                                               Pilot Program, the Exchange is                           will be filing similar extensions of the                rule change as operative upon filing
                                               proposing to amend the Rule to reflect                   Penny Pilot Program.                                    with the Commission.14
                                               that such option classes will be added                   C. Self-Regulatory Organization’s                          At any time within 60 days of the
                                               to the Penny Pilot Program on the                        Statement on Comments on the                            filing of such proposed rule change, the
                                               second trading day following January 1,                  Proposed Rule Change Received From                      Commission summarily may
                                               2018.                                                    Members, Participants, or Others                        temporarily suspend such rule change if
                                                  The purpose of this provision is to                                                                           it appears to the Commission that such
                                               reflect the new date on which                              Written comments were neither                         action is necessary or appropriate in the
                                               replacement issues may be added to the                   solicited nor received.                                 public interest, for the protection of
                                               Penny Pilot Program.                                     III. Date of Effectiveness of the                       investors, or otherwise in furtherance of
                                                                                                        Proposed Rule Change and Timing for                     the purposes of the Act. If the
                                               2. Statutory Basis
                                                                                                        Commission Action                                       Commission takes such action, the
                                                  MIAX believes that its proposed rule                                                                          Commission shall institute proceedings
                                               change is consistent with Section 6(b) of                   The Exchange has filed the proposed
                                                                                                        rule change pursuant to Section                         under Section 19(b)(2)(B) 15 of the Act to
                                               the Act 6 in general, and furthers the                                                                           determine whether the proposed rule
                                                                                                        19(b)(3)(A)(iii) of the Act 8 and Rule
                                               objectives of Section 6(b)(5) of the Act 7                                                                       change should be approved or
                                                                                                        19b–4(f)(6) thereunder.9 Because the
                                               in particular, in that it is designed to                                                                         disapproved.
                                                                                                        proposed rule change does not: (i)
                                               prevent fraudulent and manipulative
                                                                                                        Significantly affect the protection of                  IV. Solicitation of Comments
                                               acts and practices, to promote just and
                                                                                                        investors or the public interest; (ii)
                                               equitable principles of trade, to foster                                                                           Interested persons are invited to
                                                                                                        impose any significant burden on
                                               cooperation and coordination with                                                                                submit written data, views, and
                                                                                                        competition; and (iii) become operative
                                               persons engaged in facilitating                                                                                  arguments concerning the foregoing,
                                                                                                        prior to 30 days from the date on which
                                               transactions in securities, to remove                                                                            including whether the proposed rule
                                                                                                        it was filed, or such shorter time as the
                                               impediments to and perfect the                                                                                   change is consistent with the Act.
                                                                                                        Commission may designate, if
                                               mechanisms of a free and open market                                                                             Comments may be submitted by any of
                                                                                                        consistent with the protection of
                                               and a national market system and, in                                                                             the following methods:
                                                                                                        investors and the public interest, the
                                               general, to protect investors and the
                                                                                                        proposed rule change has become                         Electronic Comments
                                               public interest.
                                                                                                        effective pursuant to Section 19(b)(3)(A)                 • Use the Commission’s internet
                                                  In particular, the proposed rule
                                                                                                        of the Act and Rule 19b–4(f)(6)(iii)                    comment form (http://www.sec.gov/
                                               change, which extends the Penny Pilot
                                                                                                        thereunder.                                             rules/sro.shtml); or
                                               Program for six months, allows the
                                                                                                           A proposed rule change filed under                     • Send an email to rule-comments@
                                               Exchange to continue to participate in a
                                                                                                        Rule 19b–4(f)(6) 10 normally does not                   sec.gov. Please include File Number SR–
                                               program that has been viewed as
                                                                                                        become operative prior to 30 days after                 MIAX–2017–48 on the subject line.
                                               beneficial to traders, investors and
                                                                                                        the date of the filing.11 However,
                                               public customers and viewed as                                                                                   Paper Comments
                                                                                                        pursuant to Rule 19b–4(f)(6)(iii),12 the
                                               successful by the other options
                                                                                                        Commission may designate a shorter                        • Send paper comments in triplicate
                                               exchanges participating in it.
                                                                                                        time if such action is consistent with the              to Secretary, Securities and Exchange
                                               B. Self-Regulatory Organization’s                        protection of investors and the public                  Commission, 100 F Street NE,
                                               Statement on Burden on Competition                       interest. The Exchange has asked the                    Washington, DC 20549–1090.
                                                 The Exchange does not believe that                     Commission to waive the 30-day                          All submissions should refer to File
                                               the proposed rule change will impose                     operative delay so that the proposal may                Number SR–MIAX–2017–48. This file
                                               any burden on competition that is not                      8 15
                                                                                                                                                                number should be included on the
                                                                                                                U.S.C. 78s(b)(3)(A)(iii).
                                               necessary or appropriate in furtherance                    9 17  CFR 240.19b–4(f)(6).
                                                                                                                                                                subject line if email is used. To help the
                                               of the purposes of the Act. Specifically,                  10 17 CFR 240.19b–4(f)(6).                            Commission process and review your
                                                                                                          11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
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                                                  5 The month immediately preceding a                                                                              13 See Securities Exchange Act Release No. 61061
                                                                                                        4(f)(6)(iii) requires the Exchange to give the
                                               replacement class’s addition to the Pilot Program        Commission written notice of the Exchange’s intent      (November 24, 2009), 74 FR 62857 (December 1,
                                               (i.e., June) is not used for purposes of the six-month   to file the proposed rule change along with a brief     2009) (SR–NYSEArca–2009–44).
                                               analysis. For example, a replacement added on the        description and the text of the proposed rule              14 For purposes only of waiving the operative
                                               second trading day following January 1, 2018, will       change, at least five business days prior to the date   delay for this proposal, the Commission has
                                               be identified based on trading activity from June 1,     of filing of the proposed rule change, or such          considered the proposed rule’s impact on
                                               2017, through November 30, 2017.                         shorter time as designated by the Commission. The       efficiency, competition, and capital formation. See
                                                  6 15 U.S.C. 78f(b).                                   Exchange has satisfied this pre-filing requirement.     15 U.S.C. 78c(f).
                                                  7 15 U.S.C. 78f(b)(5).                                  12 17 CFR 240.19b–4(f)(6)(iii).                          15 15 U.S.C. 78s(b)(2)(B).




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                                               61060                      Federal Register / Vol. 82, No. 246 / Tuesday, December 26, 2017 / Notices

                                               comments more efficiently, please use                   (‘‘Commission’’) the proposed rule                       (A) Clearing Agency’s Statement of the
                                               only one method. The Commission will                    change as described in Items I, II, and                  Purpose of, and Statutory Basis for, the
                                               post all comments on the Commission’s                   III below, which Items have been                         Proposed Rule Change
                                               internet website (http://www.sec.gov/                   prepared by OCC. On December 18,                         (1) Purpose
                                               rules/sro.shtml).                                       2017, OCC filed Amendment No. 1 to
                                                  Copies of the submission, all                        the proposed rule change.3 The                           Background
                                               subsequent amendments, all written                      Commission is publishing this notice to                     On September 28, 2016 the
                                               statements with respect to the proposed                 solicit comments on the proposed rule                    Commission adopted amendments to
                                               rule change that are filed with the                                                                              Rule 17Ad–22 6 and added new Rule
                                                                                                       change from interested persons.
                                               Commission, and all written                                                                                      17Ab2–2 7 pursuant to Section 17A of
                                               communications relating to the                          I. Clearing Agency’s Statement of the                    the Act 8 and the Payment, Clearing, and
                                               proposed rule change between the                        Terms of Substance of the Proposed                       Settlement Supervision Act of 2010
                                               Commission and any person, other than                   Rule Change                                              (‘‘Clearing Supervision Act’’) 9 to
                                               those that may be withheld from the                                                                              establish enhanced standards for the
                                               public in accordance with the                              The purpose of the proposed rule
                                                                                                                                                                operation and governance of those
                                               provisions of 5 U.S.C. 552, will be                     change is to formalize and update OCC’s
                                                                                                                                                                clearing agencies registered with the
                                               available for website viewing and                       Margin Policy in connection with                         Commission that meet the definition of
                                               printing in the Commission’s Public                     requirements applicable to OCC under                     a ‘‘covered clearing agency,’’ as defined
                                               Reference Room, 100 F Street NE,                        Rule 17Ad–22(e)(6), which generally                      by Rule 17Ad–22(a)(5) 10 (collectively,
                                               Washington, DC 20549, on official                       requires a covered clearing agency to                    the new and amended rules are herein
                                               business days between the hours of                      have policies and procedures reasonably                  referred to as ‘‘CCA’’ rules). The CCA
                                               10:00 a.m. and 3:00 p.m. Copies of the                  designed to, among other things, cover                   rules require that a covered clearing
                                               filing also will be available for                       its credit exposures to its participants                 agency, among other things: ‘‘establish,
                                               inspection and copying at the principal                 through the establishment of a risk-                     implement, maintain and enforce
                                               office of the Exchange. All comments                    based margin system meeting certain                      written policies and procedures
                                               received will be posted without change.
                                                                                                       standards.4 The Margin Policy is                         reasonably designed to . . . [c]over . . .
                                               Persons submitting comments are
                                                                                                       included as confidential Exhibit 5 of the                its credit exposures to its participants by
                                               cautioned that we do not redact or edit
                                               personal identifying information from                   filing. The policy is being submitted                    establishing a risk-based margin
                                               comment submissions. You should                         without marking to improve readability                   system’’ that satisfies certain criteria,
                                               submit only information that you wish                   as it is being submitted in its entirety as              including that it produces margin levels
                                               to make available publicly.                             new rule text.                                           commensurate with the risks of
                                                  All submissions should refer to File                                                                          particular products, collects margin at
                                                                                                          The proposed rule change does not
                                               Number SR–MIAX–2017–48 and should                                                                                least daily, collects margin sufficient to
                                                                                                       require any changes to the text of OCC’s
                                               be submitted on or before January 16,                                                                            cover exposure between the last margin
                                                                                                       By-Laws or Rules. All terms with initial
                                               2018.                                                                                                            collection and position closeout, uses
                                                                                                       capitalization that are not otherwise                    reliable pricing sources, appropriately
                                                 For the Commission, by the Division of                defined herein have the same meaning                     measures credit exposure and regularly
                                               Trading and Markets, pursuant to delegated              as set forth in the OCC By-Laws and
                                               authority.16                                                                                                     reviews, tests and verifies its margin
                                                                                                       Rules.5                                                  methodology.11
                                               Eduardo A. Aleman,
                                                                                                       II. Clearing Agency’s Statement of the                      OCC is defined as a covered clearing
                                               Assistant Secretary.                                                                                             agency under the CCA rules, and
                                               [FR Doc. 2017–27694 Filed 12–22–17; 8:45 am]            Purpose of, and Statutory Basis for, the
                                                                                                       Proposed Rule Change                                     therefore is subject to the requirements
                                               BILLING CODE 8011–01–P                                                                                           of the CCA rules, including Rule 17Ad–
                                                                                                         In its filing with the Commission,                     22(e)(6).12 Accordingly, OCC proposes
                                                                                                       OCC included statements concerning                       to formalize its Margin Policy, as
                                               SECURITIES AND EXCHANGE                                                                                          described below, to describe its
                                               COMMISSION                                              the purpose of and basis for the
                                                                                                       proposed rule change and discussed any                   approach for collecting margin and
                                               [Release No. 34–82355; File No. SR–OCC–                 comments it received on the proposed                     managing the credit exposures
                                               2017–007]
                                                                                                       rule change. The text of these statements                presented by its Clearing Members.
                                               Self-Regulatory Organizations; The                      may be examined at the places specified                  Margin Policy
                                               Options Clearing Corporation; Notice                    in Item IV below. OCC has prepared                          The purpose of the Margin Policy is
                                               of Filing of Proposed Rule Change, as                   summaries, set forth in sections (A), (B),               to describe OCC’s approach for
                                               Modified by Amendment No. 1, Related                    and (C) below, of the most significant                   collecting margin and managing the
                                               to The Options Clearing Corporation’s                   aspects of these statements.                             credit exposure presented by its
                                               Margin Policy                                                                                                    Clearing Members, so as to ensure that
                                                                                                                                                                its margin methodologies are governed
                                               December 19, 2017.
                                                                                                                                                                and implemented in a manner that is
                                                  Pursuant to Section 19(b)(1) of the
                                                                                                          3 In Amendment No. 1, OCC modified a portion          compliant with Rule 17Ad–22(e)(6).13
                                               Securities Exchange Act of 1934
                                                                                                       of its Margin Policy to: (i) State that OCC’s Board      The Margin Policy describes, in general:
                                               (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                                                                       of Directors (‘‘Board’’) is ultimately responsible for
                                               notice is hereby given that on December
ethrower on DSK3G9T082PROD with NOTICES




                                                                                                       annual review and approval of the Policy, and (ii)        6 17 CFR 240.17Ad–22.
                                               11, 2017, The Options Clearing                          correctly cite provisions in OCC’s Rules governing        7 17 CFR 240.17Ab2–2.
                                               Corporation (‘‘OCC’’) filed with the                    its stock loan program. OCC did not propose any           8 15 U.S.C. 78q–1.

                                               Securities and Exchange Commission                      other changes in Amendment No. 1.                         9 12 U.S.C. 5461 et seq.
                                                                                                          4 17 CFR 240.17Ad–22(e)(6).                            10 17 CFR 240.17Ad–22(a)(5).
                                                 16 17 CFR 200.30–3(a)(12).                               5 OCC’s By-Laws and Rules can be found on              11 17 CFR 240.17Ad–22(e)(6).
                                                 1 15 U.S.C. 78s(b)(1).                                OCC’s public website: http://optionsclearing.com/         12 Id.
                                                 2 17 CFR 240.19b–4.                                   about/publications/bylaws.jsp.                            13 Id.




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Document Created: 2017-12-23 03:08:35
Document Modified: 2017-12-23 03:08:35
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 61058 

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