83 FR 31213 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Penny Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 128 (July 3, 2018)

Page Range		31213-31214
FR Document		2018-14295
Federal Register, Volume 83 Issue 128 (Tuesday, July 3, 2018)
[Federal Register Volume 83, Number 128 (Tuesday, July 3, 2018)]
[Notices]
[Pages 31213-31214]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-14295]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83534; File No. SR-MRX-2018-22]


Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Extend the Penny 
Pilot Program

June 28, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 26, 2018, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its rules to extend a pilot program 
to quote and to trade certain options classes in penny increments 
(``Penny Pilot Program'').
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqmrx.cchwallstreet.com/, at the principal office 
of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    Under the Penny Pilot Program, the minimum price variation for all 
participating options classes, except for the Nasdaq-100 Index Tracking 
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and 
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all 
quotations in options series that are quoted at less than $3 per 
contract and $0.05 for all quotations in options series that are quoted 
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01 
increments for all options series. The Penny Pilot Program is currently 
scheduled to expire on June 30, 2018.\3\ The Exchange proposes to 
extend the Penny Pilot Program through December 31, 2018, and to 
provide a revised date for adding replacement issues to the Penny Pilot 
Program. The Exchange proposes that any Penny Pilot Program issues that 
have been delisted may be replaced on the second trading day following 
July 1, 2018. The replacement issues will be selected based on trading 
activity for the most recent six month period excluding the month 
immediately preceding the replacement (i.e., beginning December 1, 
2017, and ending May 31, 2018). This filing does not propose any 
substantive changes to the Penny Pilot Program: All classes currently 
participating will remain the same and all minimum increments will 
remain unchanged. The Exchange believes the benefits to public 
customers and other market participants who will be able to express 
their true prices to buy and sell options have been demonstrated to 
outweigh any increase in quote traffic.
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    \3\ See Exchange Act Release No. 82364 (December 19, 2017), 82 
FR 61056 (December 26, 2017) (SR-MRX-2017-28).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6(b) of the Act.\4\ 
Specifically, the proposed rule change is consistent with Section 
6(b)(5) of the Act,\5\ because it is designed to promote just and 
equitable principles of trade, remove impediments to and perfect the 
mechanisms of a free and open market and a national market system and, 
in general, to protect investors and the public interest. In 
particular, the proposed rule change, which extends the Penny Pilot 
Program for an additional six months, will enable public customers and 
other market participants to express their true prices to buy and sell 
options to the benefit of all market participants.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\6\ the Exchange does 
not believe that the proposed rule change will impose any burden on 
intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. Specifically, 
the Exchange believes that, by extending the expiration of the Penny 
Pilot

[[Page 31214]]

Program, the proposed rule change will allow for further analysis of 
the Penny Pilot Program and a determination of how the Penny Pilot 
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 and 
facilitating investor protection.
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    \6\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
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.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally 
does not become operative prior to 30 days after the date of the 
filing.\10\ However, pursuant to Rule 19b-4(f)(6)(iii),\11\ 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.\12\ Accordingly, the Commission designates 
the proposed rule change as operative upon filing with the 
Commission.\13\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 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.
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ See Securities Exchange Act Release No. 61061 (November 24, 
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
    \13\ 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).
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    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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MRX-2018-22 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MRX-2018-22. 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-MRX-2018-22 and should be submitted on 
or before July 24, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14295 Filed 7-2-18; 8:45 am]
 BILLING CODE 8011-01-P
31214 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices

Program, the proposed rule change will interruption in a manner that is with respect to the proposed rule
allow for further analysis of the Penny consistent with the Commission’s prior change that are filed with the
Pilot Program and a determination of approval of the extension and expansion Commission, and all written
how the Penny Pilot Program should be of the Pilot Program and will allow the communications relating to the
structured in the future. In doing so, the Exchange and the Commission proposed rule change between the
proposed rule change will also serve to additional time to analyze the impact of Commission and any person, other than
promote regulatory clarity and the Pilot Program.12 Accordingly, the those that may be withheld from the
consistency, thereby reducing burdens Commission designates the proposed public in accordance with the
on the marketplace and facilitating rule change as operative upon filing provisions of 5 U.S.C. 552, will be
investor protection. with the Commission.13 available for website viewing and
C. Self-Regulatory Organization’s At any time within 60 days of the printing in the Commission’s Public
Statement on Comments on the filing of such proposed rule change, the Reference Room, 100 F Street NE,
Proposed Rule Change Received From Commission summarily may Washington, DC 20549, on official
Members, Participants, or Others temporarily suspend such rule change if business days between the hours of
it appears to the Commission that such 10:00 a.m. and 3:00 p.m. Copies of the
No written comments were either action is necessary or appropriate in the filing also will be available for
solicited or received. public interest, for the protection of inspection and copying at the principal
III. Date of Effectiveness of the investors, or otherwise in furtherance of office of the Exchange. All comments
Proposed Rule Change and Timing for the purposes of the Act. If the received will be posted without change.
Commission Action Commission takes such action, the Persons submitting comments are
Commission shall institute proceedings cautioned that we do not redact or edit
The Exchange has filed the proposed
under Section 19(b)(2)(B) 14 of the Act to personal identifying information from
rule change pursuant to Section
determine whether the proposed rule comment submissions. You should
19(b)(3)(A)(iii) of the Act 7 and Rule
change should be approved or submit only information that you wish
19b–4(f)(6) thereunder.8 Because the
disapproved. to make available publicly. All
proposed rule change does not: (i)
Significantly affect the protection of submissions should refer to File
IV. Solicitation of Comments
investors or the public interest; (ii) Number SR–MRX–2018–22 and should
Interested persons are invited to be submitted on or before July 24, 2018.
impose any significant burden on submit written data, views, and
competition; and (iii) become operative arguments concerning the foregoing,
For the Commission, by the Division of
prior to 30 days from the date on which Trading and Markets, pursuant to delegated
including whether the proposed rule authority.15
it was filed, or such shorter time as the
change is consistent with the Act. Eduardo A. Aleman,
Commission may designate, if
Comments may be submitted by any of
consistent with the protection of Assistant Secretary.
the following methods:
investors and the public interest, the [FR Doc. 2018–14295 Filed 7–2–18; 8:45 am]
proposed rule change has become Electronic Comments BILLING CODE 8011–01–P
effective pursuant to Section 19(b)(3)(A) • Use the Commission’s internet
of the Act and Rule 19b–4(f)(6)(iii) comment form (http://www.sec.gov/
thereunder. rules/sro.shtml); or SECURITIES AND EXCHANGE
A proposed rule change filed under • Send an email to rule-comments@ COMMISSION
Rule 19b–4(f)(6) 9 normally does not sec.gov. Please include File Number SR–
become operative prior to 30 days after MRX–2018–22 on the subject line. [Release No. 34–83546; File No. SR–
the date of the filing.10 However, NYSEArca–2018–40]
pursuant to Rule 19b–4(f)(6)(iii),11 the Paper Comments
Commission may designate a shorter • Send paper comments in triplicate Self-Regulatory Organizations; NYSE
time if such action is consistent with the to Secretary, Securities and Exchange Arca, Inc.; Notice of Filing of Proposed
protection of investors and the public Commission, 100 F Street NE, Rule Change Regarding Investments of
interest. The Exchange has asked the Washington, DC 20549–1090. the REX BKCM ETF
Commission to waive the 30-day All submissions should refer to File
operative delay so that the proposal may June 28, 2018.
Number SR–MRX–2018–22. This file
become operative immediately upon number should be included on the Pursuant to Section 19(b)(1) 1 of the
filing. The Commission believes that subject line if email is used. To help the Securities Exchange Act of 1934
waiving the 30-day operative delay is Commission process and review your (‘‘Act’’) 2 and Rule 19b–4 thereunder,3
consistent with the protection of comments more efficiently, please use notice is hereby given that on June 26,
investors and the public interest only one method. The Commission will 2018, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
because doing so will allow the Pilot post all comments on the Commission’s the ‘‘Exchange’’) filed with the
Program to continue without internet website (http://www.sec.gov/ Securities and Exchange Commission
rules/sro.shtml). Copies of the (‘‘Commission’’) the proposed rule
7 15 U.S.C. 78s(b)(3)(A)(iii).
submission, all subsequent change as described in Items I, II, and
8 17 CFR 240.19b–4(f)(6).
9 17 CFR 240.19b–4(f)(6). amendments, all written statements III below, which Items have been
10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
prepared by the Exchange. The
sradovich on DSK3GMQ082PROD with NOTICES

4(f)(6)(iii) requires the Exchange to give the 12 See Securities Exchange Act Release No. 61061 Commission is publishing this notice to
Commission written notice of the Exchange’s intent (November 24, 2009), 74 FR 62857 (December 1, solicit comments on the proposed rule
to file the proposed rule change along with a brief 2009) (SR–NYSEArca–2009–44). change from interested persons.
description and the text of the proposed rule 13 For purposes only of waiving the operative

change, at least five business days prior to the date delay for this proposal, the Commission has
15 17 CFR 200.30–3(a)(12).
of filing of the proposed rule change, or such considered the proposed rule’s impact on
1 15 U.S.C. 78s(b)(1).
shorter time as designated by the Commission. The efficiency, competition, and capital formation. See
Exchange has satisfied this pre-filing requirement. 15 U.S.C. 78c(f). 2 15 U.S.C. 78a.
11 17 CFR 240.19b–4(f)(6)(iii). 14 15 U.S.C. 78s(b)(2)(B). 3 17 CFR 240.19b–4.

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Document Created: 2018-07-02 23:55:03
Document Modified: 2018-07-02 23:55:03
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		83 FR 31213