83_FR_10583 83 FR 10536 - Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 11.270 (Clearly Erroneous Executions) To Preclude Members From Requesting a Review of a Volatility Auction as a Clearly Erroneous Execution

83 FR 10536 - Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 11.270 (Clearly Erroneous Executions) To Preclude Members From Requesting a Review of a Volatility Auction as a Clearly Erroneous Execution

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 47 (March 9, 2018)

Page Range10536-10538
FR Document2018-04793

Federal Register, Volume 83 Issue 47 (Friday, March 9, 2018) 
[Federal Register Volume 83, Number 47 (Friday, March 9, 2018)]
[Notices]
[Pages 10536-10538]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-04793]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82815; File No. SR-IEX-2018-05]


Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 11.270 (Clearly Erroneous Executions) To Preclude Members From 
Requesting a Review of a Volatility Auction as a Clearly Erroneous 
Execution

March 6, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on February 23, 2018, the Investors Exchange LLC (``IEX'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 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

    Pursuant to the provisions of Section 19(b)(1) under the Securities 
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\ 
Investors Exchange LLC (``IEX'' or ``Exchange'') is filing with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change to amend Rule 11.270 (Clearly Erroneous Executions) to preclude 
Members from requesting a review of a Volatility Auction \6\ as a 
clearly erroneous execution. The Exchange has designated this rule 
change as ``non-controversial'' under Section 19(b)(3)(A) of the Act 
\7\ and provided the Commission with the notice required by Rule 19b-
4(f)(6) thereunder.\8\
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    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ See Rule 11.350(f).
    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4.
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    The text of the proposed rule change is available at the Exchange's 
website at www.iextrading.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 the 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
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 statement [sic] may be examined 
at the places specified in Item IV below. The self-regulatory 
organization 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule change is to amend Rule 11.270 
(Clearly Erroneous Executions) to preclude Members from requesting a 
review of a Volatility Auction as a clearly erroneous execution.
    On September 19, 2016, Plan Participants, with input from the 
Advisory Committee and staff of the Commission, proposed the twelfth 
amendment to the Plan to Address Extraordinary Market Volatility 
Pursuant to Rule 608 of Regulation NMS under the Act (the ``Limit Up-
Limit Down Plan'' or ``Plan''),\9\ which contained certain enhancements 
to the reopening process following a Trading Pause (``Amendment No. 
12'').\10\ The Exchange is a Participant of the Plan and a member of 
the Operating Committee, and intends on launching a listings program 
for corporate issuers in 2018, at which point IEX will be a Primary 
Listing Exchange. In conjunction with Amendment No. 12, each Primary 
Listing Exchange filed proposed rule changes with the Commission under 
Section 19(b) of the Exchange Act to amend their respective rules for 
automated reopenings following a Trading Pause, and to preclude Members 
from requesting a review of reopening executions as clearly 
erroneous.\11\ On January 19, 2017, the Commission approved Amendment 
No. 12.\12\ On April 13, 2017, the Commission approved the Thirteenth 
Amendment to the Plan, which extended the pilot period of the Plan from 
April 21, 2017, to April 16, 2018, and required the Processor to 
publish certain data regarding the reopening processes of the Primary 
Listing Exchanges.\13\ On April 28, 2017, the Commission noticed for 
immediate effectiveness the Fourteenth Amendment to the Plan, which 
extended the implementation date of Amendment No. 12 to the end of the 
third quarter of 2017.\14\ Finally, on September 26, 2017, the 
Commission noticed for immediate effectiveness the Fifteenth Amendment 
to the Plan, which extended the implementation date of Amendment No. 12 
to no later than November 30, 2017.\15\
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    \9\ See also Securities Exchange Act Release No. 67091 (May 31, 
2012), 77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit Down 
Release''). Note, unless otherwise specified, capitalized terms used 
herein have the same meaning as set forth in the Plan or in Exchange 
rules.
    \10\ See letter from Elizabeth K. King, General Counsel, NYSE, 
to Brent J. Fields, Secretary, Commission, dated September 16, 2016.
    \11\ See Securities Exchange Act Release Nos. 79162 (October 26, 
2016), 81 FR 75875 (November 1, 2016) (SR-BatsBZX-2016-61); 79158 
(October 26, 2016), 81 FR 75879 (November 1, 2016) (SR-NASDAQ-2016-
131); and 79107 (October 18, 2016), 81 FR 73159 (October 24, 2016) 
(File No. SR-NYSEArca-2016-130). See also Cboe BZX Exchange, Inc. 
(``Cboe Bats'') Rule 11.17(a); the Nasdaq Stock Market LLC 
(``Nasdaq'') Rule 11890(a)(1); and NYSE Arca, Inc. (``Arca'') Rule 
7.10-E(a).
    \12\ See Securities Exchange Act Release No. 79845 (January 19, 
2017), 82 FR 8551 (January 26, 2017).
    \13\ See Securities Exchange Act Release No. 80455 (April 13, 
2017), 82 FR 18519 (April 19, 2017).
    \14\ See Securities Exchange Act Release No. 80549 (April 28, 
2017), 82 FR 20928 (May 4, 2017).
    \15\ See Securities Exchange Act Release No. 81720 (September 
26, 2017), 82 FR 45922 (October 2, 2017).
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    On August 4, 2017, the Commission approved a proposed rule change 
filed by the Exchange to adopt rules governing auctions in IEX-listed 
securities, including a Volatility Auction process to resume trading 
after a Trading Pause in an IEX-listed security pursuant to the 
Plan.\16\ The Exchange's rules governing auctions include the 
enhancements to the reopening process following a Trading Pause as set 
forth in Amendment No. 12, but do not include amendments to the 
Exchange's rules governing clearly erroneous executions.\17\ 
Accordingly, in order to ensure the Exchange's rules are consistent 
with the Plan and the rules of other Primary Listing Exchanges, the 
Exchange is proposing to amend Rule 11.270 (Clearly Erroneous 
Executions) to preclude Members from requesting a

[[Page 10537]]

review of a Volatility Auction as a clearly erroneous execution.\18\
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    \16\ See Securities Exchange Act Release No. 81316 (August 4, 
2017), 82 FR 37474 (August 10, 2017).
    \17\ See supra note 6 [sic].
    \18\ See supra note 8 [sic].
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    In adopting and approving Amendment No. 12 and the related exchange 
filings, the Participants and the Commission, respectively, have agreed 
that the procedures for reopening trading following a Trading Pause 
reduces the potential that an order or orders entered by one or more 
Members caused such execution to be clearly erroneous. Specifically, 
the Participants believe that the proposed standardized procedures for 
reopening trading following a Trading Pause incorporates a methodology 
that allows for widened collars, which may result in a reopening price 
away from prior trading prices, but which reopening price would be a 
result of a measured and transparent process that eliminates the 
potential that such trade would be considered erroneous. Therefore, 
consistent with the Plan, and the rules of other Primary Listing 
Exchanges, the Exchange proposes to amend Rule 11.270 (Clearly 
Erroneous Executions) to preclude Members from requesting a review of a 
Volatility Auction as a clearly erroneous execution.\19\
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    \19\ The Exchange notes that Participants will be engaging in a 
more comprehensive review of Rule 11.270 in connection with 
amendments to the Plan relating to tiering of securities and 
applicable percentage parameters. The Exchange proposes to make this 
limited amendment to Rule 11.270 as an initial step to eliminating 
its clearly erroneous executions rules in their current form.
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    As announced in IEX Trading Alerts #2017-015 and #2017-046, the 
Exchange intends to become a Primary Listing Exchange and support its 
first IEX-listed security in 2018.\20\ In addition, as part of the 
listings initiative, the Exchange is providing a series of industry 
wide weekend tests for the Exchange and its Members to exercise the 
various technology changes required to support IEX Auctions and 
listings functionality.\21\ Accordingly, the Exchange is proposing to 
implement the proposed changes during the industry wide testing period 
in 2018 so that Members are on notice regarding the ineligibility of 
Volatility Auctions for review as a clearly erroneous execution as they 
optimize their systems to interact with IEX Auctions.
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    \20\ See IEX Trading Alert #2017-015 (Listings Specifications, 
Testing Opportunities, and Timelines), May 31, 2017. See also IEX 
Trading Alert #2017-046 (IEX Listings Timeline Update), originally 
published on Monday, October 30, 2017, and re-published on Tuesday, 
October 31, 2017.
    \21\ See, e.g., IEX Trading Alert #2017-028 (First Listings 
Functionality Industry Test on Saturday, August 26), August 17, 
2017; IEX Trading Alert #2017-037 (Second Listings Functionality 
Industry Test on Saturday, September 9), September 7, 2017; IEX 
Trading Alert #2017-039 (Third Listings Functionality Industry Test 
on Saturday, September 23), September 18, 2017; IEX Trading Alert 
#2017-040 (Rescheduled 4th Listing Functionality Industry Test), 
September 29, 2017; IEX Trading Alert #2017-046 (IEX Listings 
Timeline Update), originally published on Monday, October 30, 2017, 
and re-published on Tuesday, October 31, 2017; and IEX Trading Alert 
#2017-047 (Fourth Listings Functionality Industry Test on Saturday, 
November 4), October 31, 2017.
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2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the 
provisions of Section 6(b) \22\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) of the Act \23\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
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.
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    \22\ 15 U.S.C. 78f.
    \23\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that precluding Members from 
requesting review of a Volatility Auction as a clearly erroneous 
execution would remove impediments to and perfect the mechanism of a 
free and open market and a national market system because the 
standardized procedures for reopening trading following a Trading Pause 
reduce the possibility that one or more orders from a Member caused a 
Volatility Auction to be clearly erroneous. Specifically, the Exchange 
believes that the standardized procedures for reopening trading 
following a Trading Pause incorporate a methodology that allows for 
widened collars, which may result in a reopening price away from prior 
trading prices, but which reopening price would be a result of a 
measured and transparent process that eliminates the potential that 
such trade would be considered erroneous.
    Furthermore, the Exchange believes the proposed rule change is 
consistent with the protection of investors and the public interest in 
that it is designed to ensure the Exchange's rules are consistent with 
the Plan and the rules of other Primary Listing Exchanges, which will 
increase transparency and create consistency regarding the rules 
governing clearly erroneous executions among Primary Listing Exchanges.
    Lastly, the Exchange believes the proposed rule change is 
consistent with the protection of investors and the public interest 
because, as discussed in the Purpose section, the Exchange is proposing 
to implement the proposed changes during the industry wide testing 
period in 2018 so that Members are on notice regarding the 
ineligibility of Volatility Auctions for review as a clearly erroneous 
execution as they optimize their systems to interact with IEX Auctions.

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

    IEX does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes that the 
proposed change does not impact inter-market competition in that it is 
designed to ensure the Exchange's rules are consistent with the Plan 
and the rules of other Primary Listing Exchanges, which will increase 
transparency and create consistency regarding the rules governing 
clearly erroneous executions among Primary Listing Markets.
    In addition, the Exchange does not believe that the proposed 
changes will have any impact on intra-market competition, because the 
proposed changes apply to all Members on a fair and equal basis.

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

    Written comments were neither solicited nor received.

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

    Because the 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) of the Act \24\ and Rule 19b-4(f)(6) thereunder.\25\
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    \24\ 15 U.S.C. 78s(b)(3)(A).
    \25\ 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \26\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \27\ 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

[[Page 10538]]

operative delay. The Exchange stated that waiver of the operative delay 
is consistent with the protection of investors and the public interest 
because it would allow the Exchange to implement the proposed rule 
change upon effectiveness, thus immediately increasing transparency and 
creating consistency regarding the rules governing clearly erroneous 
executions among Primary Listing Exchanges. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Accordingly, the 
Commission hereby waives the operative delay and designates the 
proposal as operative upon filing.\28\
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    \26\ 17 CFR 240.19b-4(f)(6).
    \27\ 17 CFR 240.19b-4(f)(6)(iii).
    \28\ 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).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-IEX-2018-05 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-IEX-2018-05. 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 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 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. 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-IEX-2018-05, and should be submitted on 
or before March 30, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-04793 Filed 3-8-18; 8:45 am]
 BILLING CODE 8011-01-P

10536 Federal Register / Vol. 83, No. 47 / Friday, March 9, 2018 / Notices should be submitted on or before March Commission with the notice required by Exchange Act to amend their respective 30, 2018. Rule 19b–4(f)(6) thereunder.8 rules for automated reopenings For the Commission, by the Division of The text of the proposed rule change following a Trading Pause, and to Trading and Markets, pursuant to delegated is available at the Exchange’s website at preclude Members from requesting a authority.13 www.iextrading.com, at the principal review of reopening executions as Eduardo A. Aleman, office of the Exchange, and at the clearly erroneous.11 On January 19, Assistant Secretary. Commission’s Public Reference Room. 2017, the Commission approved II. Self-Regulatory Organization’s Amendment No. 12.12 On April 13, [FR Doc. 2018–04790 Filed 3–8–18; 8:45 am] Statement of the Purpose of, and the 2017, the Commission approved the BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule Thirteenth Amendment to the Plan, Change which extended the pilot period of the SECURITIES AND EXCHANGE Plan from April 21, 2017, to April 16, In its filing with the Commission, the 2018, and required the Processor to COMMISSION self-regulatory organization included publish certain data regarding the [Release No. 34–82815; File No. SR–IEX– statements concerning the purpose of reopening processes of the Primary 2018–05] and basis for the proposed rule change Listing Exchanges.13 On April 28, 2017, and discussed any comments it received the Commission noticed for immediate Self-Regulatory Organizations; on the proposed rule change. The text effectiveness the Fourteenth Investors Exchange LLC; Notice of of these statement [sic] may be Amendment to the Plan, which Filing and Immediate Effectiveness of examined at the places specified in Item extended the implementation date of Proposed Rule Change To Amend Rule IV below. The self-regulatory Amendment No. 12 to the end of the 11.270 (Clearly Erroneous Executions) organization has prepared summaries, third quarter of 2017.14 Finally, on To Preclude Members From set forth in Sections A, B, and C below, September 26, 2017, the Commission Requesting a Review of a Volatility of the most significant aspects of such noticed for immediate effectiveness the Auction as a Clearly Erroneous statements. Fifteenth Amendment to the Plan, Execution which extended the implementation A. Self-Regulatory Organization’s March 6, 2018. Statement of the Purpose of, and the date of Amendment No. 12 to no later Pursuant to Section 19(b)(1) 1 of the Statutory Basis for, the Proposed Rule than November 30, 2017.15 On August 4, 2017, the Commission Securities Exchange Act of 1934 (the Change approved a proposed rule change filed ‘‘Act’’),2 and Rule 19b–4 thereunder,3 1. Purpose by the Exchange to adopt rules notice is hereby given that, on February The purpose of this proposed rule governing auctions in IEX-listed 23, 2018, the Investors Exchange LLC change is to amend Rule 11.270 (Clearly securities, including a Volatility (‘‘IEX’’ or the ‘‘Exchange’’) filed with the Erroneous Executions) to preclude Auction process to resume trading after Securities and Exchange Commission Members from requesting a review of a a Trading Pause in an IEX-listed (the ‘‘Commission’’) the proposed rule Volatility Auction as a clearly erroneous security pursuant to the Plan.16 The change as described in Items I and II execution. Exchange’s rules governing auctions below, which Items have been prepared On September 19, 2016, Plan include the enhancements to the by the self-regulatory organization. The reopening process following a Trading Commission is publishing this notice to Participants, with input from the Advisory Committee and staff of the Pause as set forth in Amendment No. solicit comments on the proposed rule 12, but do not include amendments to change from interested persons. Commission, proposed the twelfth amendment to the Plan to Address the Exchange’s rules governing clearly I. Self-Regulatory Organization’s Extraordinary Market Volatility erroneous executions.17 Accordingly, in Statement of the Terms of Substance of Pursuant to Rule 608 of Regulation NMS order to ensure the Exchange’s rules are the Proposed Rule Change under the Act (the ‘‘Limit Up-Limit consistent with the Plan and the rules Down Plan’’ or ‘‘Plan’’),9 which of other Primary Listing Exchanges, the Pursuant to the provisions of Section contained certain enhancements to the Exchange is proposing to amend Rule 19(b)(1) under the Securities Exchange reopening process following a Trading 11.270 (Clearly Erroneous Executions) Act of 1934 (‘‘Act’’),4 and Rule 19b–4 Pause (‘‘Amendment No. 12’’).10 The to preclude Members from requesting a thereunder,5 Investors Exchange LLC (‘‘IEX’’ or ‘‘Exchange’’) is filing with the Exchange is a Participant of the Plan 11 See Securities Exchange Act Release Nos. Securities and Exchange Commission and a member of the Operating 79162 (October 26, 2016), 81 FR 75875 (November (‘‘Commission’’) a proposed rule change Committee, and intends on launching a 1, 2016) (SR–BatsBZX–2016–61); 79158 (October to amend Rule 11.270 (Clearly listings program for corporate issuers in 26, 2016), 81 FR 75879 (November 1, 2016) (SR– 2018, at which point IEX will be a NASDAQ–2016–131); and 79107 (October 18, Erroneous Executions) to preclude 2016), 81 FR 73159 (October 24, 2016) (File No. SR– Members from requesting a review of a Primary Listing Exchange. In NYSEArca–2016–130). See also Cboe BZX Volatility Auction 6 as a clearly conjunction with Amendment No. 12, Exchange, Inc. (‘‘Cboe Bats’’) Rule 11.17(a); the erroneous execution. The Exchange has each Primary Listing Exchange filed Nasdaq Stock Market LLC (‘‘Nasdaq’’) Rule 11890(a)(1); and NYSE Arca, Inc. (‘‘Arca’’) Rule designated this rule change as ‘‘non- proposed rule changes with the 7.10–E(a). controversial’’ under Section 19(b)(3)(A) Commission under Section 19(b) of the 12 See Securities Exchange Act Release No. 79845 of the Act 7 and provided the (January 19, 2017), 82 FR 8551 (January 26, 2017). 8 17 13 See Securities Exchange Act Release No. 80455 CFR 240.19b–4. 9 See also Securities Exchange Act Release No. (April 13, 2017), 82 FR 18519 (April 19, 2017). amozie on DSK30RV082PROD with NOTICES 13 17 CFR 200.30–3(a)(12). 14 See Securities Exchange Act Release No. 80549 1 15 U.S.C. 78s(b)(1). 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012) 2 15 U.S.C. 78a. (the ‘‘Limit Up-Limit Down Release’’). Note, unless (April 28, 2017), 82 FR 20928 (May 4, 2017). otherwise specified, capitalized terms used herein 15 See Securities Exchange Act Release No. 81720 3 17 CFR 240.19b–4. have the same meaning as set forth in the Plan or (September 26, 2017), 82 FR 45922 (October 2, 4 15 U.S.C. 78s(b)(1). in Exchange rules. 2017). 5 17 CFR 240.19b–4. 10 See letter from Elizabeth K. King, General 16 See Securities Exchange Act Release No. 81316 6 See Rule 11.350(f). (August 4, 2017), 82 FR 37474 (August 10, 2017). Counsel, NYSE, to Brent J. Fields, Secretary, 7 15 U.S.C. 78s(b)(3)(A). Commission, dated September 16, 2016. 17 See supra note 6 [sic]. VerDate Sep<11>2014 16:47 Mar 08, 2018 Jkt 244001 PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 E:\FR\FM\09MRN1.SGM 09MRN1

Federal Register / Vol. 83, No. 47 / Friday, March 9, 2018 / Notices 10537 review of a Volatility Auction as a proposed changes during the industry clearly erroneous execution as they clearly erroneous execution.18 wide testing period in 2018 so that optimize their systems to interact with In adopting and approving Members are on notice regarding the IEX Auctions. Amendment No. 12 and the related ineligibility of Volatility Auctions for exchange filings, the Participants and B. Self-Regulatory Organization’s review as a clearly erroneous execution the Commission, respectively, have Statement on Burden on Competition as they optimize their systems to agreed that the procedures for reopening interact with IEX Auctions. IEX does not believe that the trading following a Trading Pause proposed rule change will result in any reduces the potential that an order or 2. Statutory Basis burden on competition that is not orders entered by one or more Members IEX believes that the proposed rule necessary or appropriate in furtherance caused such execution to be clearly change is consistent with the provisions of the purposes of the Act. The erroneous. Specifically, the Participants of Section 6(b) 22 of the Act in general, Exchange believes that the proposed believe that the proposed standardized and furthers the objectives of Section change does not impact inter-market procedures for reopening trading 6(b)(5) of the Act 23 in particular, in that competition in that it is designed to following a Trading Pause incorporates it is designed to prevent fraudulent and ensure the Exchange’s rules are a methodology that allows for widened manipulative acts and practices, to consistent with the Plan and the rules collars, which may result in a reopening promote just and equitable principles of of other Primary Listing Exchanges, price away from prior trading prices, but trade, to remove impediments to and which will increase transparency and which reopening price would be a result perfect the mechanism of a free and create consistency regarding the rules of a measured and transparent process open market and a national market governing clearly erroneous executions that eliminates the potential that such system, and, in general, to protect among Primary Listing Markets. trade would be considered erroneous. investors and the public interest. In addition, the Exchange does not Therefore, consistent with the Plan, and Specifically, the Exchange believes believe that the proposed changes will the rules of other Primary Listing that precluding Members from have any impact on intra-market Exchanges, the Exchange proposes to requesting review of a Volatility competition, because the proposed amend Rule 11.270 (Clearly Erroneous Auction as a clearly erroneous changes apply to all Members on a fair Executions) to preclude Members from execution would remove impediments and equal basis. requesting a review of a Volatility to and perfect the mechanism of a free C. Self-Regulatory Organization’s Auction as a clearly erroneous and open market and a national market Statement on Comments on the execution.19 system because the standardized Proposed Rule Change Received From As announced in IEX Trading Alerts procedures for reopening trading Members, Participants, or Others #2017–015 and #2017–046, the following a Trading Pause reduce the Exchange intends to become a Primary possibility that one or more orders from Written comments were neither Listing Exchange and support its first a Member caused a Volatility Auction to solicited nor received. IEX-listed security in 2018.20 In be clearly erroneous. Specifically, the III. Date of Effectiveness of the addition, as part of the listings Exchange believes that the standardized Proposed Rule Change and Timing for initiative, the Exchange is providing a procedures for reopening trading Commission Action series of industry wide weekend tests following a Trading Pause incorporate a for the Exchange and its Members to Because the proposed rule change methodology that allows for widened exercise the various technology changes does not (i) significantly affect the collars, which may result in a reopening required to support IEX Auctions and protection of investors or the public price away from prior trading prices, but listings functionality.21 Accordingly, the interest; (ii) impose any significant which reopening price would be a result Exchange is proposing to implement the burden on competition; and (iii) become of a measured and transparent process operative for 30 days from the date on that eliminates the potential that such which it was filed, or such shorter time 18 See supra note 8 [sic]. trade would be considered erroneous. 19 The Exchange notes that Participants will be Furthermore, the Exchange believes as the Commission may designate, it has engaging in a more comprehensive review of Rule the proposed rule change is consistent become effective pursuant to Section 11.270 in connection with amendments to the Plan 19(b)(3)(A) of the Act 24 and Rule 19b– relating to tiering of securities and applicable with the protection of investors and the percentage parameters. The Exchange proposes to public interest in that it is designed to 4(f)(6) thereunder.25 make this limited amendment to Rule 11.270 as an A proposed rule change filed ensure the Exchange’s rules are initial step to eliminating its clearly erroneous pursuant to Rule 19b–4(f)(6) under the executions rules in their current form. consistent with the Plan and the rules Act 26 normally does not become 20 See IEX Trading Alert #2017–015 (Listings of other Primary Listing Exchanges, operative for 30 days after the date of its Specifications, Testing Opportunities, and which will increase transparency and Timelines), May 31, 2017. See also IEX Trading filing. However, Rule 19b–4(f)(6)(iii) 27 create consistency regarding the rules Alert #2017–046 (IEX Listings Timeline Update), permits the Commission to designate a originally published on Monday, October 30, 2017, governing clearly erroneous executions shorter time if such action is consistent and re-published on Tuesday, October 31, 2017. among Primary Listing Exchanges. 21 See, e.g., IEX Trading Alert #2017–028 (First Lastly, the Exchange believes the with the protection of investors and the Listings Functionality Industry Test on Saturday, proposed rule change is consistent with public interest. The Exchange has asked August 26), August 17, 2017; IEX Trading Alert the protection of investors and the the Commission to waive the 30-day #2017–037 (Second Listings Functionality Industry Test on Saturday, September 9), September 7, 2017; public interest because, as discussed in 24 15 U.S.C. 78s(b)(3)(A). IEX Trading Alert #2017–039 (Third Listings the Purpose section, the Exchange is 25 17 CFR 240.19b–4(f)(6). As required under Rule Functionality Industry Test on Saturday, September proposing to implement the proposed 19b–4(f)(6)(iii), the Exchange provided the amozie on DSK30RV082PROD with NOTICES 23), September 18, 2017; IEX Trading Alert #2017– 040 (Rescheduled 4th Listing Functionality changes during the industry wide Commission with written notice of its intent to file Industry Test), September 29, 2017; IEX Trading testing period in 2018 so that Members the proposed rule change, along with a brief description and the text of the proposed rule Alert #2017–046 (IEX Listings Timeline Update), are on notice regarding the ineligibility change, at least five business days prior to the date originally published on Monday, October 30, 2017, of Volatility Auctions for review as a and re-published on Tuesday, October 31, 2017; of filing of the proposed rule change, or such and IEX Trading Alert #2017–047 (Fourth Listings shorter time as designated by the Commission. 22 15 U.S.C. 78f. 26 17 CFR 240.19b–4(f)(6). Functionality Industry Test on Saturday, November 4), October 31, 2017. 23 15 U.S.C. 78f(b)(5). 27 17 CFR 240.19b–4(f)(6)(iii). VerDate Sep<11>2014 16:47 Mar 08, 2018 Jkt 244001 PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 E:\FR\FM\09MRN1.SGM 09MRN1

10538 Federal Register / Vol. 83, No. 47 / Friday, March 9, 2018 / Notices operative delay. The Exchange stated submission, all subsequent have been prepared by the Exchange. that waiver of the operative delay is amendments, all written statements The Commission is publishing this consistent with the protection of with respect to the proposed rule notice to solicit comments on the investors and the public interest change that are filed with the proposed rule change from interested because it would allow the Exchange to Commission, and all written persons. implement the proposed rule change communications relating to the upon effectiveness, thus immediately proposed rule change between the I. Self-Regulatory Organization’s increasing transparency and creating Commission and any person, other than Statement of the Terms of Substance of consistency regarding the rules those that may be withheld from the the Proposed Rule Change governing clearly erroneous executions public in accordance with the The Exchange is filing a proposal to among Primary Listing Exchanges. The provisions of 5 U.S.C. 552, will be amend Exchange Rule 403, Withdrawal Commission believes that waiving the available for website viewing and of Approval of Underlying Securities, to 30-day operative delay is consistent printing in the Commission’s Public allow the Exchange to delist an option with the protection of investors and the Reference Room, 100 F Street, NE, class if open for trading on another public interest. Accordingly, the Washington, DC 20549 on official national securities exchange, and to not Commission hereby waives the business days between the hours of open for trading or restrict securities operative delay and designates the 10:00 a.m. and 3:00 p.m. Copies of such with open interest to closing proposal as operative upon filing.28 filing also will be available for transactions, if open for trading solely At any time within 60 days of the inspection and copying at the principal on the Exchange. filing of the proposed rule change, the office of the Exchange. All comments The text of the proposed rule change Commission summarily may received will be posted without change. is available on the Exchange’s website at temporarily suspend such rule change if Persons submitting comments are http://www.miaxoptions.com/rule- it appears to the Commission that such cautioned that we do not redact or edit filings/ at MIAX Options’ principal action is necessary or appropriate in the personal identifying information from office, and at the Commission’s Public public interest, for the protection of comment submissions. You should Reference Room. investors, or otherwise in furtherance of submit only information that you wish the purposes of the Act. If the to make available publicly. All II. Self-Regulatory Organization’s Commission takes such action, the submissions should refer to File Statement of the Purpose of, and Commission shall institute proceedings Number SR–IEX–2018–05, and should Statutory Basis for, the Proposed Rule to determine whether the proposed rule be submitted on or before March 30, Change should be approved or disapproved. 2018. In its filing with the Commission, the IV. Solicitation of Comments For the Commission, by the Division of Exchange included statements Trading and Markets, pursuant to delegated concerning the purpose of and basis for Interested persons are invited to authority.29 the proposed rule change and discussed submit written data, views, and Eduardo A. Aleman, any comments it received on the arguments concerning the foregoing, proposed rule change. The text of these Assistant Secretary. including whether the proposed rule statements may be examined at the [FR Doc. 2018–04793 Filed 3–8–18; 8:45 am] change is consistent with the Act. places specified in Item IV below. The BILLING CODE 8011–01–P Comments may be submitted by any of Exchange has prepared summaries, set the following methods: forth in sections A, B, and C below, of Electronic Comments SECURITIES AND EXCHANGE the most significant aspects of such • Use the Commission’s internet COMMISSION statements. comment form (http://www.sec.gov/ [Release No. 34–82814; File No. SR–MIAX– A. Self-Regulatory Organization’s rules/sro.shtml); or 2018–07] Statement of the Purpose of, and • Send an email to rule-comments@ Statutory Basis for, the Proposed Rule sec.gov. Please include File Number SR– Self-Regulatory Organizations; Miami Change IEX–2018–05 on the subject line. International Securities Exchange, LLC; Notice of Filing and Immediate 1. Purpose Paper Comments Effectiveness of a Proposed Rule The Exchange seeks to amend Rule • Send paper comments in triplicate Change To Amend Exchange Rule 403, 403 to add Interpretations and Policies to Secretary, Securities and Exchange Withdrawal of Approval of Underlying .02, to allow the Exchange to delist an Commission, 100 F Street, NE, Securities option class if it is open for trading on Washington, DC 20549–1090. another securities exchange; restrict March 6, 2018. All submissions should refer to File option series to closing transactions Pursuant to the provisions of Section Number SR–IEX–2018–05. This file when an option class is open for trading 19(b)(1) of the Securities Exchange Act number should be included on the solely on the Exchange and the of 1934 (‘‘Act’’) 1 and Rule 19b–4 subject line if email is used. To help the thereunder,2 notice is hereby given that underlying security continues to meet Commission process and review your on February 21, 2018, Miami the requirements for approval; restrict comments more efficiently, please use International Securities Exchange, LLC series with open interest to closing only one method. The Commission will (‘‘MIAX Options’’ or the ‘‘Exchange’’) transactions, provided that, opening post all comments on the Commission’s filed with the Securities and Exchange transactions by Market Makers executed amozie on DSK30RV082PROD with NOTICES internet website (http://www.sec.gov/ Commission (‘‘Commission’’) a to accommodate closing transactions of rules/sro.shtml). Copies of the proposed rule change as described in other market participants may be Items I, II, and III below, which Items permitted; and to delist the option class 28 For purposes only of waiving the 30-day when all series within that class have operative delay, the Commission has also considered the proposed rule’s impact on 29 17 CFR 200.30–3(a)(12). expired. The Exchange believes the efficiency, competition, and capital formation. See 1 15 U.S.C. 78s(b)(1). ability to restrict option series to closing 15 U.S.C. 78c(f). 2 17 CFR 240.b–4. transactions when an option class is VerDate Sep<11>2014 16:47 Mar 08, 2018 Jkt 244001 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 E:\FR\FM\09MRN1.SGM 09MRN1


Document Created: 2018-03-09 03:48:23
Document Modified: 2018-03-09 03:48:23
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 Citation83 FR 10536 
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