83 FR 3196 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Market Maker Orders
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 15 (January 23, 2018)
Federal Register Volume 83, Issue 15 (January 23, 2018)
| Page Range | 3196-3199 | |
| FR Document | 2018-01094 |
[Federal Register Volume 83, Number 15 (Tuesday, January 23, 2018)] [Notices] [Pages 3196-3199] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-01094] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82523; File No. SR-MRX-2018-02] Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Market Maker Orders January 17, 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 January 5, 2018, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- The text of the proposed rule change is set forth below. Proposed new language is italicized; deleted text is in [brackets]. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend MRX Rule 805 to permit Market Makers \3\ to enter additional order types in the options classes to which they are appointed. --------------------------------------------------------------------------- \3\ Market Makers refers to ``Competitive Market Makers'' and ``Primary Market Makers'' collectively. See MRX Rule 100(a)(25). --------------------------------------------------------------------------- * * * * * Nasdaq MRX Rulebook * * * * * Rule 805. Market Maker Orders (a) Options Classes to Which Appointed. Market makers may enter all order types defined in Rule 715 in the options classes to which they are appointed under Rule 802, except Stopped Orders, Reserve Orders and Customer Cross Orders.[not place principal orders to buy or sell options in the options classes to which they are appointed under Rule 802, other than opening only orders, immediate-or-cancel orders, market orders, fill-or-kill orders, sweep orders, and block-size orders executed through the Block Order Mechanism pursuant to Rule 716(c).] Competitive Market Makers shall comply with the provisions of Rule 804(e)(2)(iii) upon the entry of such orders if they were not previously quoting in the series. (b) Options Classes Other Than Those to Which Appointed. (1) A market maker may enter all order types permitted to be entered by non-customer participants under the Rules to buy or sell options in classes of options listed on the Exchange to which the market maker is not appointed under Rule 802, except for Reserve Orders, provided that: (i) and (ii) No change. (2) and (3) No change. * * * * * II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this rule change is to permit Market Makers to enter principal orders to buy or sell options in the options classes to which they are appointed under Rule 802 \4\ for all order types listed in Rule 715 except for Stopped Orders,\5\ Reserve Orders \6\ and Customer Cross Orders.\7\ This filing is intended to permit Market Makers to execute most of the same order types, which today they are permitted to enter on other options markets.\8\ In addition, this filing is intended to amend MRX Rule 805(b)(1) to indicate that Reserve Orders are not permitted to be entered by MRX Market Makers in non- [[Page 3197]] appointed options classes. Today, MRX Market Makers may not enter Reserve Orders in either appointed or non-appointed options classes. Today, while the System prohibits MRX Market Makers from entering Reserve Orders, MRX Rule 805(b)(1) does not indicate the restriction. --------------------------------------------------------------------------- \4\ MRX Rule 802 concerns the appointment of Market Makers. \5\ A stopped order is a limit order that meets the requirements of Rule 1901(b)(8). To execute stopped orders, Members must enter them into the Facilitation Mechanism or Solicited Order Mechanism pursuant to Rule 716. See MRX Rule 715(b)(6). \6\ A Reserve Order is a limit order that contains both a displayed portion and a non-displayed portion. Both the displayed and non-displayed portions of a Reserve Order are available for potential execution against incoming marketable orders. A non- marketable Reserve Order will rest on the order book. The displayed portion of a Reserve Order shall be ranked at the specified limit price and the time of order entry. The displayed portion of a Reserve Order will trade in accordance with Rule 713(c) and (d) for Priority Customer Orders, and Rule 713(e) and Supplementary Material .01, for Professional Orders. When the displayed portion of a Reserve Order is decremented, either in full or in part, it shall be refreshed from the non-displayed portion of the resting Reserve Order. If the displayed portion is refreshed in part, the new displayed portion shall include the previously displayed portion. Upon any refresh, the entire displayed portion shall be ranked at the specified limit price and obtain a new time stamp, i.e., the time that the new displayed portion of the order was refreshed. The new displayed portion will trade in accordance with Rule 713(c) and (d) for Priority Customer Orders, and Rule 713(e) and Supplementary Material .01, for Professional Orders. The initial non-displayed portion of a Reserve Order rests on the order book and is ranked based on the specified limit price and time of order entry. Thereafter, non-displayed portions, if any, always obtain the same time stamp as that of the new displayed portion in subparagraph 4 above. The non-displayed portion of any Reserve Order is available for execution only after all displayed interest has been executed. The non-displayed portion of any Reserve Order will trade in accordance with Rule 713(c) and (d) for Priority Customer Orders, and Rule 713(e) and Supplementary Material .01, for Professional Orders. See MRX Rule 715(g). \7\ A Customer Cross Order is comprised of a Priority Customer Order to buy and a Priority Customer Order to sell at the same price and for the same quantity. See MRX Rule 715(i). \8\ NYSE Arca, Inc. (``NYSE Arca'') and NYSE American LLC (``NYSE American'') do not limit the types of orders that can be entered by market makers. See NYSE Arca Rule 6.37C-O and NYSE American Rule 925.2NY. --------------------------------------------------------------------------- Appointed Options Classes Today, as noted in MRX Rule 805(a), a Market Maker may not place principal orders to buy or sell options in the options classes to which they are appointed under Rule 802, other than opening only orders,\9\ immediate-or-cancel orders,\10\ market orders, fill-or-kill orders,\11\ sweep orders,\12\ and block-size orders \13\ executed through the Block Order Mechanism \14\ pursuant to Rule 716(c). At this time, the Exchange proposes to expand the order types which Market Makers are permitted to enter on MRX.\15\ The Exchange is amending MRX Rule 805(a) to make clear which order types a Market Maker in an appointed options class may submit. Additionally, ISO Orders, All-Or-None Orders, Stop Orders, Qualified Contingent Cross Orders, Attributable Orders, Do-Not- Route Orders, Opening Sweep Orders, Cancel and Replace Orders,\16\ and Add Liquidity Orders are accepted on MRX today from Market Makers as principal orders as modifiers of the allowable non-resting order types, although they are not specifically detailed in the rule. This rule change will further detail and align the rule text with the system functionality by making clear that Maker Makers may enter all order types defined in Rule 715 in the options classes to which they are appointed under Rule 802, except Stopped Orders, Reserve Orders and Customer Cross Orders. --------------------------------------------------------------------------- \9\ An Opening Only order is a limit order that can be entered for the opening rotation only. Any portion of the order that is not executed during the opening rotation is cancelled. See MRX Rules 717(o). \10\ An immediate-or-cancel order is a limit order that is to be executed in whole or in part upon receipt. Any portion not so executed is to be treated as cancelled. An immediate-or-cancel order entered by a Market Maker through the Specialized Quote Feed protocol will not be subject to the Limit Order Price Protection and Size Limitation Protection as defined in MRX Rule 714(b)(2) and (3). See MRX Rule 715(b)(2). \11\ A fill-or-kill order is a limit order that is to be executed in its entirety as soon as it is received and, if not so executed, treated as cancelled. See MRX Rule 715(b)(2). \12\ A Sweep Order is a limit order that is to be executed in whole or in part on the Exchange and the portion not so executed shall be routed pursuant to Supplementary Material .05 to Rule 1901 to Eligible Exchange(s) for immediate execution as soon as the order is received by the Eligible Exchange(s). Any portion not immediately executed by the Eligible Exchange(s) shall be canceled. If a Sweep Order is not marketable when it is submitted to the Exchange, it shall be canceled. See MRX Rule 715(s). \13\ Block-size orders are orders for fifty (50) contracts or more. See MRX Rule 716(a). \14\ The Block Order Mechanism is a process by which a Member can obtain liquidity for the execution of block-size orders. See MRX Rule 716(c). \15\ This expansion would include Good-Till-Date Orders, GTC Orders, Limit Orders, and Stop Limit Orders as new acceptable order types. \16\ Cancel and Replace Orders shall mean a single message for the immediate cancellation of a previously received order and the replacement of that order with a new order. If the previously placed order is already filled partially or in its entirety, the replacement order is automatically canceled or reduced by the number of contracts that were executed. The replacement order will retain the priority of the cancelled order, if the order posts to the Order Book, provided the price is not amended, size is not increased, or in the case of Reserve Orders, size is not changed. If the replacement portion of a Cancel and Replace order does not satisfy the system's price or other reasonability checks (e.g., MRX Rule 710; MRX Rule 711(c); MRX Rule 714(b)(2); and MRX Rule 722(b)(1) and Supplementary Material .07 (b), (c) and (d) to Rule 722) the existing order shall be cancelled and not replaced. See Supplementary Material .02 to MRX Rule 715. --------------------------------------------------------------------------- Today, MRX Market Makers, who are appointed and non-appointed in a particular options class, may submit orders without limitation, unless otherwise restricted by the order type as discussed herein. The Exchange proposes to permit Market Makers to enter all order types, which are listed in MRX Rule 715, except for Stopped Orders, Reserve Orders and Customer Cross Orders. The Exchange notes that today Market Makers are not eligible to execute either Customer Cross Orders, which are Customer orders, or Stopped Orders, which are intended for the account of a customer.\17\ With respect to Reserve Orders, the Exchange proposes to continue to restrict Market Makers from entering Reserve Orders in their appointed options class. The Exchange believes that Market Maker liquidity should be displayed liquidity. For these reasons, and to remain competitive with other markets, the Exchange proposes to permit Market Makers to enter all orders they are eligible to submit in their appointed class with the exception of Reserve Orders and also restrict Reserve Orders in the non-appointed classes. --------------------------------------------------------------------------- \17\ MRX Rule 1901(b)(8) states, ``The transaction that constituted the Trade-Through was the execution of an order for which, at the time of receipt of the order, a Member had guaranteed an execution at no worse than a specified price (a ``stopped order''), where: (i) The stopped order was for the account of a Customer; (ii) the Customer agreed to the specified price on an order-by-order basis; and (iii) the price of the Trade-Through was, for a stopped buy order, lower than the national Best Bid in the options series at the time of execution, or, for a stopped sell order, higher than the national Best Offer in the options series at the time of execution . . .'' --------------------------------------------------------------------------- Non-Appointed Options Classes Today, for the reasons noted above, the Exchange does not permit Market Makers to enter Reserve Orders in non-appointed options classes. However, the current rule text does not provide this limitation. The Exchange proposes to amend the current rule text at MRX Rule 805(b)(1) to codify this limitation. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\18\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\19\ in particular, in that it is designed 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, by providing Market Makers access to trade order types which are currently permissible to be traded in on other options exchanges today.\20\ The Exchange believes that permitting Market Makers to enter all eligible order types, except Reserve Orders, in both appointed and non-appointed options classes offers no advantage to Market Makers under the Exchange's market structure, including, but not limited to, under the priority and trade allocation rules in MRX Rule 713 and various risk protection mechanism rules applicable to Market Makers in MRX Rule 804.\21\ Today, other non-Market Maker participants may submit these order types on MRX. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78f(b). \19\ 15 U.S.C. 78f(b)(5). \20\ See note 8 above. \21\ Today, Market Makers are not eligible to execute either Customer Cross Orders, which are Customer orders, or Stopped Orders, which are intended for the account of a customer. --------------------------------------------------------------------------- The Exchange notes that previously, Nasdaq ISE, LLC prohibited non- customer trading by Electronic Access Members (``EAMs'') for principal or agent transactions.\22\ At that time, ISE represented that, in an electronic market, non-customer market orders have the potential to create market volatility by trading at different price levels until their order is fully executed. ISE further noted that, without this restriction, non-customers would be able to use large-size orders to quickly take out ISE's entire order book without giving other market participants an [[Page 3198]] opportunity to react.\23\ Today, EAMs on ISE may submit non-customer limit orders regardless of the size of the order where previously EAMs were prohibited from submitting orders for non-customers that caused ISE's best bid and offer to be for less than 10 contracts.\24\ --------------------------------------------------------------------------- \22\ See Securities Exchange Act Release No. 42455 (February 24, 2000), 65 FR 11388 (March 2, 2000) (File No. 10-127) (In the Matter of the Application of The International Securities Exchange LLC for Registration as a National Securities Exchange; Findings and Opinion of the Commission). \23\ Id. When the restriction was adopted, there were various limitations imposed on non-customer trading. For example, displayed quotes were firm only for public customer orders. Since that time, electronic options trading has evolved. With the adoption of trade- through protection under the intermarket linkage, every order must be executed at the best quoted price. Further, ISE has also removed restrictions on non-customer trading. \24\ See Securities Exchange Act Release No. 49602 (April 22, 2004), 69 FR 23841 (April 30, 2004) (SR-ISE-2003-26). --------------------------------------------------------------------------- The Exchange notes that these restrictions never existed on MRX. MRX believes that these restrictions should not exist today because there is no reason to restrict Market Makers in entering order types, except for the restriction related to Reserve Orders, in options classes in which they are appointed. Unlike other order types, the Reserve Order is a limit order that contains both a displayed portion and a non-displayed portion.\25\ Both the displayed and non-displayed portions of a Reserve Order are available for potential execution against incoming marketable orders. When the displayed portion of a Reserve Order is decremented, either in full or in part, it shall be refreshed from the non-displayed portion of the resting Reserve Order. The Exchange believes that because a Reserve Order contains a non- displayed portion, Market Makers should not be permitted to enter this order. Market Makers are required to make markets that, absent changed market conditions, will be honored for the number of contracts entered into the Exchange's System in all series of options classes to which the market maker is appointed.\26\ The Exchange believes that these markets should be transparent. Today, MRX Market Makers are not permitted to enter Reserve Orders in either appointed or non-appointed options classes. The Exchange proposes to specifically note this limitation in both Rule 805(a) and (b) as an exception. The Exchange notes that this limitation is specifically not noted in Rule 805(b) today despite the fact that the limitation exists in the System today. --------------------------------------------------------------------------- \25\ See MRX Rule 715(g). \26\ See MRX Rule 803(b)(2). --------------------------------------------------------------------------- The Exchange is also amending MRX Rule 805(a) to detail the types of non-resting order types and their modifiers with respect to ISO Orders, All-Or-None Orders, Stop Orders, Qualified Contingent Cross Orders, Attributable Orders, Do-Not-Route Orders, Opening Sweep Orders, Cancel and Replace Orders, and Add Liquidity Orders. This rule change will detail and align the rule text with the system functionality and make clear which order types a Market Maker may submit in appointed options classes. MRX Market Makers continue to be obligated to add liquidity on MRX. The Exchange also notes that MRX Rule 805(b)(2) and (3) restricts the number of contracts that a Market Maker may enter in an options class to which the Market Maker is not appointed.\27\ The Exchange notes that it also requires Market Makers to abide by certain quoting requirements, in the options classes in which they are appointed pursuant to MRX Rule 802, in order to maintain the status of a Market Maker.\28\ The Exchange believes that permitting a Market Maker to enter additional order types, except Reserve Orders, in their appointed options class will permit Market Makers additional latitude to conduct business on MRX and effectively compete with other market makers on other options exchanges. Quotes and orders entered by a Market Maker may not interact against quotes and orders entered on the opposite side of the market by the same Market Maker.\29\ --------------------------------------------------------------------------- \27\ The total number of contracts executed during a quarter by a Competitive Market Maker in options classes to which it is not appointed may not exceed twenty-five percent (25%) of the total number of contracts traded by such Competitive Market Maker in classes to which it is appointed and with respect to which it was quoting pursuant to Rule 804(e)(2). See MRX Rule 805(b)(2). The total number of contracts executed during a quarter by a Primary Market Maker in options classes to which it is not appointed may not exceed ten percent (10%) of the total number of contracts traded per each Primary Market Maker Membership. See MRX Rule 805(b)(3). \28\ See MRX Rule 804(e) and Supplementary Material .01 to Rule 804. Orders do not count toward meeting continuous quoting obligations. \29\ See MRX Rule 804(b). --------------------------------------------------------------------------- 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 not necessary or appropriate in furtherance of the purposes of the Act. Today, NYSE Arca and NYSE American place no limitation on the types of orders that can be entered by market makers in their appointed class.\30\ Accordingly, the Exchange believes that this proposal does not impose an undue burden on inter-market competition because each options exchange generally determines permissible order types for market makers in its trading environment based on the exchange's individual business policy, objectives, and trading system. The Exchange's proposal reflects its policy and objectives, and does not impose an undue burden on intra- market competition because it treats all market makers uniformly with respect to permissible order types. Further, this rule change will align the system functionality with the rule text to reflect the types of orders a Market Maker in both appointed and non-appointed options class may submit. The current rule text is not accurate. This rule filing is intended to detail and align the rule text with the system functionality in the current text of Rule 805(a) and (b). This proposal will make clear which order types a Market Maker may submit in both appointed and non-appointed options classes. --------------------------------------------------------------------------- \30\ See note 8 above. --------------------------------------------------------------------------- Further, Market Makers, unlike other market participants, are required to abide by certain quoting requirements, in the options classes in which they are appointed pursuant to MRX Rule 802, in order to maintain the status of a Market Maker.\31\ The Exchange also notes that MRX Rule 805(b)(2) and (3) restricts the number of orders that a Market Maker may enter in an options class to which the Market Maker is not appointed.\32\ The Exchange believes that permitting a Market Maker to enter additional order types, except Reserve Orders, in their appointed options class will permit Market Makers additional latitude to conduct business on MRX and effectively compete with other market makers on other options exchanges. --------------------------------------------------------------------------- \31\ See note 28 above. \32\ See note 27 above. --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the 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 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)(iii) of the Act \33\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\34\ --------------------------------------------------------------------------- \33\ 15 U.S.C. 78s(b)(3)(A)(iii). \34\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 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. --------------------------------------------------------------------------- [[Page 3199]] A proposed rule change filed under Rule 19b-4(f)(6) \35\ normally does not become operative prior to 30 days after the date of the filing. However, Rule 19b-4(f)(6)(iii) \36\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that the proposed rule change will permit Market Makers additional latitude to conduct business on MRX and effectively compete with other market makers on other options exchanges. The Exchange further states that the proposed rule will detail and align the rule text with the system functionality. The Commission believes that waiver of 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 proposed rule change as operative upon filing.\37\ --------------------------------------------------------------------------- \35\ 17 CFR 240.19b-4(f)(6). \36\ 17 CFR 240.19b-4(f)(6)(iii). \37\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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 CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number SR-MRX-2018-02 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-MRX-2018-02. 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-2018-02 and should be submitted on or before February 13, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\38\ --------------------------------------------------------------------------- \38\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-01094 Filed 1-22-18; 8:45 am] BILLING CODE 8011-01-P
![3196 Federal Register / Vol. 83, No. 15 / Tuesday, January 23, 2018 / Notices
printing in the Commission’s Public Makers 3 to enter additional order types A. Self-Regulatory Organization’s
Reference Room, 100 F Street NE, in the options classes to which they are Statement of the Purpose of, and
Washington, DC 20549 on official appointed. Statutory Basis for, the Proposed Rule
business days between the hours of * * * * * Change
10:00 a.m. and 3:00 p.m. Copies of the
1. Purpose
filing also will be available for Nasdaq MRX Rulebook
inspection and copying at the principal The purpose of this rule change is to
* * * * * permit Market Makers to enter principal
office of the Exchange. All comments
received will be posted without change. Rule 805. Market Maker Orders orders to buy or sell options in the
Persons submitting comments are options classes to which they are
cautioned that we do not redact or edit (a) Options Classes to Which appointed under Rule 802 4 for all order
personal identifying information from Appointed. Market makers may enter all types listed in Rule 715 except for
comment submissions. You should order types defined in Rule 715 in the Stopped Orders,5 Reserve Orders 6 and
submit only information that you wish options classes to which they are Customer Cross Orders.7 This filing is
to make available publicly. All appointed under Rule 802, except intended to permit Market Makers to
submissions should refer to File Stopped Orders, Reserve Orders and execute most of the same order types,
Number CboeEDGX–2018–001 and Customer Cross Orders.[not place which today they are permitted to enter
should be submitted on or before principal orders to buy or sell options on other options markets.8 In addition,
February 13, 2018. in the options classes to which they are this filing is intended to amend MRX
appointed under Rule 802, other than Rule 805(b)(1) to indicate that Reserve
For the Commission, by the Division of Orders are not permitted to be entered
Trading and Markets, pursuant to delegated opening only orders, immediate-or-
by MRX Market Makers in non-
authority.12 cancel orders, market orders, fill-or-kill
Eduardo A. Aleman, orders, sweep orders, and block-size 4 MRX Rule 802 concerns the appointment of
Assistant Secretary. orders executed through the Block Market Makers.
[FR Doc. 2018–01091 Filed 1–22–18; 8:45 am] Order Mechanism pursuant to Rule 5 A stopped order is a limit order that meets the
716(c).] Competitive Market Makers requirements of Rule 1901(b)(8). To execute
BILLING CODE 8011–01–P
stopped orders, Members must enter them into the
shall comply with the provisions of Facilitation Mechanism or Solicited Order
Rule 804(e)(2)(iii) upon the entry of Mechanism pursuant to Rule 716. See MRX Rule
SECURITIES AND EXCHANGE such orders if they were not previously 715(b)(6).
6 A Reserve Order is a limit order that contains
COMMISSION quoting in the series. both a displayed portion and a non-displayed
[Release No. 34–82523; File No. SR–MRX– (b) Options Classes Other Than Those portion. Both the displayed and non-displayed
portions of a Reserve Order are available for
2018–02] to Which Appointed. potential execution against incoming marketable
(1) A market maker may enter all orders. A non-marketable Reserve Order will rest on
Self-Regulatory Organizations; Nasdaq the order book. The displayed portion of a Reserve
order types permitted to be entered by
MRX, LLC; Notice of Filing and Order shall be ranked at the specified limit price
non-customer participants under the and the time of order entry. The displayed portion
Immediate Effectiveness of Proposed
Rule Change Relating to Market Maker Rules to buy or sell options in classes of a Reserve Order will trade in accordance with
Rule 713(c) and (d) for Priority Customer Orders,
Orders of options listed on the Exchange to and Rule 713(e) and Supplementary Material .01,
which the market maker is not for Professional Orders. When the displayed portion
January 17, 2018. appointed under Rule 802, except for of a Reserve Order is decremented, either in full or
Pursuant to Section 19(b)(1) of the Reserve Orders, provided that: in part, it shall be refreshed from the non-displayed
portion of the resting Reserve Order. If the
Securities Exchange Act of 1934 (i) and (ii) No change. displayed portion is refreshed in part, the new
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 displayed portion shall include the previously
notice is hereby given that on January 5, (2) and (3) No change. displayed portion. Upon any refresh, the entire
2018, Nasdaq MRX, LLC (‘‘MRX’’ or * * * * * displayed portion shall be ranked at the specified
limit price and obtain a new time stamp, i.e., the
‘‘Exchange’’) filed with the Securities time that the new displayed portion of the order
and Exchange Commission II. Self-Regulatory Organization’s
was refreshed. The new displayed portion will
(‘‘Commission’’) the proposed rule Statement of the Purpose of, and trade in accordance with Rule 713(c) and (d) for
change as described in Items I and II Statutory Basis for, the Proposed Rule Priority Customer Orders, and Rule 713(e) and
Change Supplementary Material .01, for Professional
below, which Items have been prepared Orders. The initial non-displayed portion of a
by the Exchange. The Commission is In its filing with the Commission, the Reserve Order rests on the order book and is ranked
publishing this notice to solicit based on the specified limit price and time of order
Exchange included statements entry. Thereafter, non-displayed portions, if any,
comments on the proposed rule change
concerning the purpose of and basis for always obtain the same time stamp as that of the
from interested persons. new displayed portion in subparagraph 4 above.
the proposed rule change and discussed
The text of the proposed rule change The non-displayed portion of any Reserve Order is
is set forth below. Proposed new any comments it received on the available for execution only after all displayed
language is italicized; deleted text is in proposed rule change. The text of these interest has been executed. The non-displayed
statements may be examined at the portion of any Reserve Order will trade in
[brackets]. accordance with Rule 713(c) and (d) for Priority
places specified in Item IV below. The Customer Orders, and Rule 713(e) and
I. Self-Regulatory Organization’s Exchange has prepared summaries, set Supplementary Material .01, for Professional
Statement of the Terms of Substance of forth in sections A, B, and C below, of Orders. See MRX Rule 715(g).
sradovich on DSK3GMQ082PROD with NOTICES
the Proposed Rule Change the most significant aspects of such
7 A Customer Cross Order is comprised of a
Priority Customer Order to buy and a Priority
The Exchange proposes to amend statements. Customer Order to sell at the same price and for the
MRX Rule 805 to permit Market same quantity. See MRX Rule 715(i).
8 NYSE Arca, Inc. (‘‘NYSE Arca’’) and NYSE
American LLC (‘‘NYSE American’’) do not limit the
12 17 CFR 200.30–3(a)(12). 3 Market Makers refers to ‘‘Competitive Market
types of orders that can be entered by market
1 15 U.S.C. 78s(b)(1). Makers’’ and ‘‘Primary Market Makers’’ collectively. makers. See NYSE Arca Rule 6.37C–O and NYSE
2 17 CFR 240.19b–4. See MRX Rule 100(a)(25). American Rule 925.2NY.
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![Federal Register / Vol. 83, No. 15 / Tuesday, January 23, 2018 / Notices 3199
A proposed rule change filed under • Send an email to rule-comments@ SECURITIES AND EXCHANGE
Rule 19b–4(f)(6) 35 normally does not sec.gov. Please include File Number SR– COMMISSION
become operative prior to 30 days after MRX–2018–02 on the subject line.
[Release No. 34–82521; File No. SR–ISE–
the date of the filing. However, Rule
Paper Comments 2018–04]
19b–4(f)(6)(iii) 36 permits the
Commission to designate a shorter time • Send paper comments in triplicate Self-Regulatory Organizations; Nasdaq
if such action is consistent with the to Brent J. Fields, Secretary, Securities ISE, LLC; Notice of Filing and
protection of investors and the public Immediate Effectiveness of Proposed
and Exchange Commission, 100 F Street
interest. The Exchange has asked the Rule Change Relating to Market Maker
NE, Washington, DC 20549–1090.
Commission to waive the 30-day Orders
operative delay so that the proposal may All submissions should refer to File
become operative immediately upon Number SR–MRX–2018–02. This file January 17, 2018.
filing. The Exchange states that the number should be included on the Pursuant to Section 19(b)(1) of the
proposed rule change will permit subject line if email is used. To help the Securities Exchange Act of 1934
Market Makers additional latitude to Commission process and review your (‘‘Act’’),1 and Rule 19b–4 thereunder,2
conduct business on MRX and comments more efficiently, please use notice is hereby given that on January 5,
effectively compete with other market only one method. The Commission will 2018, Nasdaq ISE, LLC (‘‘ISE’’ or
makers on other options exchanges. The post all comments on the Commission’s ‘‘Exchange’’) filed with the Securities
Exchange further states that the internet website (http://www.sec.gov/ and Exchange Commission
proposed rule will detail and align the rules/sro.shtml). Copies of the (‘‘Commission’’) the proposed rule
rule text with the system functionality. change as described in Items I and II
submission, all subsequent
The Commission believes that waiver of below, which Items have been prepared
amendments, all written statements
the 30-day operative delay is consistent by the Exchange. The Commission is
with respect to the proposed rule publishing this notice to solicit
with the protection of investors and the
change that are filed with the comments on the proposed rule change
public interest. Accordingly, the
Commission hereby waives the Commission, and all written from interested persons.
operative delay and designates the communications relating to the
proposed rule change between the I. Self-Regulatory Organization’s
proposed rule change as operative upon
Commission and any person, other than Statement of the Terms of Substance of
filing.37
those that may be withheld from the the Proposed Rule Change
At any time within 60 days of the
filing of the proposed rule change, the public in accordance with the The Exchange proposes to amend ISE
Commission summarily may provisions of 5 U.S.C. 552, will be Rule 805 to permit Market Makers 3 to
temporarily suspend such rule change if available for website viewing and enter additional order types in the
it appears to the Commission that such printing in the Commission’s Public options classes to which they are
action is: (i) Necessary or appropriate in Reference Room, 100 F Street NE, appointed.
the public interest; (ii) for the protection Washington, DC 20549, on official The text of the proposed rule change
of investors; or (iii) otherwise in business days between the hours of is set forth below. Proposed new
furtherance of the purposes of the Act. 10:00 a.m. and 3:00 p.m. Copies of the language is italicized; deleted text is in
If the Commission takes such action, the filing also will be available for brackets.
Commission shall institute proceedings inspection and copying at the principal * * * * *
to determine whether the proposed rule office of the Exchange. All comments
should be approved or disapproved. Nasdaq ISE Rulebook
received will be posted without change.
Persons submitting comments are * * * * *
IV. Solicitation of Comments
Interested persons are invited to cautioned that we do not redact or edit Rule 805. Market Maker Orders
submit written data, views, and personal identifying information from
(a) Options Classes to Which
arguments concerning the foregoing, comment submissions. You should
Appointed. Market makers may enter all
including whether the proposed rule submit only information that you wish order types defined in Rule 715 in the
change is consistent with the Act. to make available publicly. All options classes to which they are
Comments may be submitted by any of submissions should refer to File appointed under Rule 802, except
the following methods: Number SR–MRX–2018–02 and should Stopped Orders, Reserve Orders and
be submitted on or before February 13, Customer Cross Orders.[not place
Electronic Comments 2018. principal orders to buy or sell options
• Use the Commission’s internet in the options classes to which they are
For the Commission, by the Division of
comment form (http://www.sec.gov/ Trading and Markets, pursuant to delegated appointed under Rule 802, other than
rules/sro.shtml); or authority.38 opening only orders, immediate-or-
Eduardo A. Aleman, cancel orders, market orders, fill-or-kill
give the Commission written notice of its intent to
orders, sweep orders, complex orders,
file the proposed rule change, along with a brief Assistant Secretary.
description and the text of the proposed rule and block-size orders executed through
[FR Doc. 2018–01094 Filed 1–22–18; 8:45 am]
change, at least five business days prior to the date the Block Order Mechanism pursuant to
of filing of the proposed rule change, or such BILLING CODE 8011–01–P Rule 716(c).] Competitive Market
sradovich on DSK3GMQ082PROD with NOTICES
shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
Makers shall comply with the
35 17 CFR 240.19b–4(f)(6). provisions of Rule 804(e)(2)(iii) upon
36 17 CFR 240.19b–4(f)(6)(iii).
37 For purposes only of waiving the 30-day 1 15
U.S.C. 78s(b)(1).
2 17
CFR 240.19b–4.
operative delay, the Commission has also
considered the proposed rule’s impact on 3 Market Makers refers to ‘‘Competitive Market
efficiency, competition, and capital formation. See Makers’’ and ‘‘Primary Market Makers’’ collectively.
15 U.S.C. 78c(f). 38 17 CFR 200.30–3(a)(12). See ISE Rule 100(a)(25).
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Document Created: 2018-01-23 01:08:50
Document Modified: 2018-01-23 01:08:50
| 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 3196 |
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