83 FR 2694 - Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX Options Rules 700, 1308, and 1322

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 12 (January 18, 2018)

[Federal Register Volume 83, Number 12 (Thursday, January 18, 2018)]
[Notices]
[Pages 2694-2695]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-00722]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82488; File No. SR-MIAX-2018-01]


Self-Regulatory Organizations; Miami International Securities 
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend MIAX Options Rules 700, 1308, and 1322

January 11, 2018.
    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 January 3, 2018, Miami International Securities 
Exchange, LLC (``MIAX Options'' or the ``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 make minor corrective changes 
to Exchange Rule 700, Exercise of Option Contracts; Rule 1308, 
Supervision of Accounts; and Rule 1322, Options Communications.
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings/ at MIAX Options' 
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 proposes to amend Exchange Rule 700, Exercise of 
Option Contracts; Rule 1308, Supervision of Accounts; and Rule 1322, 
Options Communications, to make minor non-substantive corrective 
changes.
    First, the Exchange proposes to amend Exchange Rule 700(l) to make 
minor typographical corrections to cross-references in subsections (3), 
(5), and (7). The Exchange recently amended Rule 700 by renumbering 
paragraph (h) as paragraph (l).\3\ However, the Exchange inadvertently 
left in cross-references to Rule 700(h) in subsections (3), (5), and 
(7). Specifically, Rule 700(l)(3) currently reads ``[t]he Exchange may 
determine to extend the applicable deadline for the delivery of 
``exercise advice'' and ``advice cancel'' notifications pursuant to 
this paragraph (h) if unusual circumstances are present.'' The Exchange 
proposes to correct the cross-reference from ``paragraph (h)'' to 
``paragraph (l).'' Rule 700(l)(5) currently reads ``[t]he failure of 
any Member to follow the procedures in this paragraph (h) may result in 
the assessment of a fine, which may include but is not limited to 
disgorgement of potential economic gain obtained or loss avoided by the 
subject exercise, as determined by the Exchange.'' The Exchange 
proposes to correct the cross-reference from ``paragraph (h)'' to 
``paragraph (l).'' Furthermore, Rule 700(l)(7) currently reads ``[t]he 
procedures set forth in subparagraphs (1)-(2) of this subparagraph (h) 
do not apply (i) on the business day prior to expiration in series 
expiring on a day other than a business day or (ii) on the expiration 
day in series expiring on a business day.'' The Exchange proposes to 
correct the cross-reference from ``subparagraph (h)'' to ``subparagraph 
(l).'' The Exchange is not proposing any change to the wording of the 
Rule or to its application. The Exchange is only proposing to amend 
Rule 700(l) to renumber incorrect cross-references in the text of the 
Rule.
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    \3\ See Securities Exchange Act Release No. 81976 (October 30, 
2017), 82 FR 51312 (November 3, 2017)(SR-MIAX-2017-43).
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    Second, the Exchange proposes to amend Exchange Rule 1308, 
Supervision of Accounts, to make minor typographical corrections to 
cross-references in the rule text. Specifically, Rule 1308(g)(6) cross-
references Rule 1307(g) and 1307(h), which should instead cross-
reference Rule 1308(g) and 1308(h) respectively. Rule 1308(g)(6) 
currently reads ``[a] Member that specifically includes its options 
compliance program in a report that complies with substantially similar 
requirements of the New York Stock Exchange or FINRA will be deemed to 
have met the requirements of this Rule 1307(g) and Rule 1307(h).'' The 
Exchange proposes to correct this language to instead cross-reference 
``Rule 1308(g)'' and ``Rule 1308(h)'' respectively. Additionally, Rule 
1308(h) cross-references Rule 1307(g), which should instead cross-
reference Rule 1308(g). Rule 1308(h) currently reads ``[b]y April 1 of 
each year, each Member shall submit a copy of the report that Rule 
1307(g) requires the Member to prepare . . .'' The Exchange proposes to 
correct the cross-reference from ``Rule 1307(g)'' to Rule ``1308(g).''
    Finally, the Exchange proposes to amend Exchange Rule 1322, Options 
Communications, to make minor typographical corrections and to make 
corrections to cross-references in the rule text. Specifically, Rule 
1322(e)(1)(ii) is currently missing the word ``and'' after the 
semicolon in this section. Therefore, the Exchange proposes to amend 
Rule 1322(e)(1)(ii) to read ``[c]ontain contact information for 
obtaining a copy of the ODD; and.'' Additionally, the Exchange proposes 
to correct a typographical error in Rule 1322(e)(1)(iii). Currently, 
this section contains both a period and a semicolon at the end of the 
text. The Exchange proposes to remove the semicolon and leave only the 
period. Additionally, the Exchange proposes to make minor typographical 
changes to a cross-reference in Rule 1322(f). Currently, this section 
references ``Rule 1322(e)(1)(B).'' However, that is an erroneous cross-
reference and the Exchange proposes to replace it with a cross-
reference to ``Rule 1322(e)(1)(ii).'' The Exchange notes that this does 
not change the wording of the rule or its application, but only 
corrects the cross-reference to properly conform to the hierarchical 
heading scheme used throughout the Exchange's rulebook.
2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \4\ in general, and furthers the 
objectives of Section 6(b)(5)

[[Page 2695]]

of the Act \5\ 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.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed changes promote just and 
equitable principles of trade and remove impediments to and perfect the 
mechanism of a free and open market and a national market system 
because the proposed rule change corrects minor typographical errors 
and corrects errors in the hierarchical heading scheme to provide 
uniformity in the Exchange's rulebook. The Exchange notes that the 
proposed changes to Exchange Rule 700, Exercise of Option Contracts; 
Rule 1308, Supervision of Accounts; and Rule 1322, Options 
Communications, do not alter the application of each rule. As such, the 
proposed amendments would foster cooperation and coordination with 
persons engaged in facilitating transactions in securities and would 
remove impediments to and perfect the mechanism of a free and open 
market and a national exchange system. In particular, the Exchange 
believes that the proposed changes will provide greater clarity to 
Members \6\ and the public regarding the Exchange's Rules. It is in the 
public interest for rules to be accurate and concise so as to eliminate 
the potential for confusion.
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    \6\ The term ``Member'' means an individual or organization 
approved to exercise the trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    MIAX Options does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change will 
have no impact on competition as it is not designed to address any 
competitive issues but rather is designed to add additional clarity to 
existing rules and to remedy minor non-substantive issues in the text 
of various rules identified in this proposal.
    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket competition as the Rules apply equally 
to all Exchange Members.

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 foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) \8\ 
thereunder.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, 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 requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is 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-MIAX-2018-01 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MIAX-2018-01. 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 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-2018-01 and should be submitted on 
or before February 8, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00722 Filed 1-17-18; 8:45 am]
 BILLING CODE 8011-01-P