83 FR 58642 - Self-Regulatory Organizations: Notice of Filing of a Proposed Rule Change by Miami International Securities Exchange, LLC To Amend Exchange Rule 519, MIAX Order Monitor; Exchange Rule 519A, Risk Protection Monitor; and Rule 517, Quote Types Defined
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 224 (November 20, 2018)
Federal Register Volume 83, Issue 224 (November 20, 2018)
| Page Range | 58642-58645 | |
| FR Document | 2018-25249 |
[Federal Register Volume 83, Number 224 (Tuesday, November 20, 2018)] [Notices] [Pages 58642-58645] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-25249] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-84594; File No. SR-MIAX-2018-34] Self-Regulatory Organizations: Notice of Filing of a Proposed Rule Change by Miami International Securities Exchange, LLC To Amend Exchange Rule 519, MIAX Order Monitor; Exchange Rule 519A, Risk Protection Monitor; and Rule 517, Quote Types Defined November 14, 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 November 9, 2018, Miami International Securities Exchange, LLC (``MIAX Options'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') a proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to amend Exchange Rule 519, MIAX Order Monitor; Exchange Rule 519A, Risk Protection Monitor; and Rule 517, Quote Types Defined. 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 On June 28, 2018, the Exchange filed with the Securities and Exchange Commission (``SEC'') a proposal to list and trade on the Exchange, options on the SPIKESTM Index, a new index that measures expected 30-day volatility of the SPDR S&P 500 ETF Trust.\3\ To establish the settlement value for the Index, a settlement auction named the SPIKES Special Settlement Auction will be conducted once per month, on the day the settlement value for the Index is to be calculated. During the SPIKES Special Settlement Auction, in addition to any order types that may regularly be accepted by the Exchange, the Exchange will also accept settlement auction only orders (``SAO Orders'') and settlement auction only eQuotes (``SAO eQuotes''). (SAO Orders and SAO eQuotes are collectively referred to as ``SAOs'').\4\ SAOs are specific order types that allow a Member \5\ to voluntarily tag such an order as a SPIKES strategy order. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 84417 (October 12, 2018), 83 FR 52865 (October 18, 2018) (SR-MIAX-2018-14) (Order Granting Approval of a Proposed Rule Change by Miami International Securities Exchange, LLC to List and Trade Options on the SPIKES\TM\ Index). \4\ Id. \5\ The term ``Member'' means an individual or organization approved to exercise the trading rights associate with a Trading Permit. Members are deemed ``members'' under the Exchange Act. See Exchange Rule 100. --------------------------------------------------------------------------- The Exchange anticipates that market participants that actively trade SPIKES options may hedge their positions with SPY option series that will also be used to calculate the SPIKES exercise settlement/ final settlement value. Market participants holding hedged SPIKES options positions may trade out of their SPY option series on the relevant SPIKES expiration/final settlement date. Specifically, market participants holding short, hedged SPIKES options could liquidate that hedge by selling their SPY options series, while traders holding long, hedged SPIKES options could liquidate their hedge by buying SPY option series. In order to seek convergence with the SPIKE exercise/final settlement value, these market participants may liquidate their hedges by submitting SPIKES strategy orders in the appropriate SPY option series during the SPIKES Special Settlement Auction on the SPIKES expiration/final settlement date. Given that SAOs are designed for the special purpose of closing a hedged position and are available for use only during the SPIKES Special Settlement Auction, the Exchange proposes to amend its rules to remove SAO Orders from certain risk protection features offered by the Exchange. Specifically, the Exchange proposes to amend Exchange Rule 519, MIAX Order Monitor. The MIAX Order Monitor is a risk management feature of the Exchange's System.\6\ Pursuant to paragraph (a) of the Rule, the MIAX Order Monitor provides an order price protection for Market Orders to Sell,\7\ Market Orders to Buy or Sell,\8\ and Limit Orders to Buy or Sell,\9\ in order to avoid the occurrence of potential obvious or catastrophic errors on the Exchange. The MIAX Order Monitor will prevent certain orders from executing or being placed on the Book \10\ at prices outside pre-set standard limits.\11\ The MIAX Order Monitor will also cause the System to prevent certain orders from executing or being placed on the Book if the size of the order exceeds the order size protection designated by the Member.\12\ The MIAX Order Monitor will also cause the System to reject any orders that exceed the maximum number of open orders held in the System on behalf of a particular Member, as designated by the Member.\13\ The MIAX Order Monitor will also cause the System to reject any orders that exceed the maximum number of open contracts represented by orders held in the System on behalf of a particular Member, as designated by the Member.\14\ --------------------------------------------------------------------------- \6\ The term ``System'' means the automated trading system used by the Exchange for the trading of securities. See Exchange Rule 100. \7\ See Exchange Rule 519(a)(1). \8\ See Exchange Rule 519(a)(2). \9\ See Exchange Rule 519(a)(3). \10\ The term ``Book'' means the electronic book of buy and sell orders and quotes maintained by the System. See Exchange Rule 100. \11\ See Exchange Rule 519(a). \12\ See Exchange Rule 519(b). \13\ See Exchange Rule 519(c). \14\ See Exchange Rule 519(d). --------------------------------------------------------------------------- The Exchange now proposes to amend Exchange Rule 519, Interpretations and Policies, to adopt new subsection .03, to provide that the order protections of the MIAX Order Monitor pursuant to sections (b) (c) and (d) will not apply to Settlement Auction Only Orders (SAO Orders), as defined in Interpretations and Policies .03 of Exchange Rule 503. The Exchange does not believe that an [[Page 58643]] SAO Order should be subject to the order size protection described in Rule 519(b) as preventing the order from being placed on the Book may prevent the Member from effectively hedging or closing a hedged position in SPIKES options. Similarly, the Exchange does not believe that an SAO Order should be subject to the open order protection described in Rule 519(c) as this protection aggregates open orders held in the System and may inadvertently prevent the Member from hedging or closing a hedged position in SPIKES options by preventing the submission of an SAO Order. Lastly, the Exchange does not believe that an SAO Order should be subject to the open contract protection described in Rule 519(d) as this protection aggregates the number of open contracts represented by orders held in the System. Including SAO Orders in this protection may inadvertently prevent the Member from hedging or closing a hedged position in SPIKES options by preventing the submission of an SAO Order. The Exchange also proposes to amend Exchange Rule 519A, Risk Protection Monitor. The Risk Protection Monitor (``RPM'') is a feature of the MIAX System which maintains a counting program (``counting program'') for each participating Member that will count the number of orders entered and the number of contracts traded via an order entered by a Member on the Exchange within a specified time period that has been established by the Member (the ``specified time period''). The maximum duration of the specified time period will be established by the Exchange and announced via a Regulatory Circular. The Risk Protection Monitor maintains one or more Member-configurable Allowable Order Rate settings and Allowable Contract Execution Rate settings. When a Member's order is entered or when an execution of a Member's order occurs, the System will look back over the specified time period to determine if the Member has: (i) Entered during the specified time period a number of orders exceeding their Allowable Order Rate setting(s), or (ii) executed during the specified time period a number of contracts exceeding their Allowable Contract Execution Rate setting(s). Once engaged, the Risk Protection Monitor will then, as determined by the Member: Automatically either (A) prevent the System from receiving any new orders in all series in all classes from the Member; (B) prevent the System from receiving any new orders in all series in all classes from the Member and cancel all existing orders with a time-in-force of Day in all series in all classes from the Member; or (C) send a notification to the Member without any further preventative or cancellation action by the System. When engaged, the Risk Protection Monitor will still allow the Member to interact with existing orders entered prior to exceeding the Allowable Order Rate setting or the Allowable Contract Execution Rate setting, including sending cancel order messages and receiving trade executions from those orders. The Risk Protection Monitor shall remain engaged until the Member communicates with the Help Desk\15\ to enable the acceptance of new orders.\16\ --------------------------------------------------------------------------- \15\ The term ``Help Desk'' means the Exchange's control room consisting of Exchange staff authorized to make certain trading determinations on behalf of the Exchange. The Help Desk shall report to and be supervised by a senior executive officer of the Exchange. See Exchange Rule 100. \16\ See Exchange Rule 519A(a). --------------------------------------------------------------------------- The Exchange now proposes to amend Interpretations and Policies, to adopt new subsection .02, to state that SAO Orders, as defined in Interpretations and Policies .03 of Rule 503, are not eligible to participate in the Risk Protection Monitor. Prohibiting SAO Orders from participating in the Risk Protection Monitor ensures that these orders may be freely submitted to the Exchange and will remain active in the System once accepted. As discussed above, SAO Orders are strategy orders used for hedging or closing a hedged position in SPIKES options during the SPIKES Special Settlement Auction which is conducted only once per month. When engaged the Risk Protection Monitor may prevent the Member from submitting SAO Orders to the Exchange until the Member communicates with the Help Desk to enable the acceptance of new orders. The Exchange does not believe it is in the best interest of the Member to introduce this type of delay for SAO Orders, as they are time sensitive and are designed to participate in the SPIKES Special Settlement Auction. Additionally, the Exchange proposes to amend Rule 517, Quote Types Defined. Specifically, subsection (d) of Rule 517 provides that bids and offers in certain limited time in force eQuote types (Auction or Cancel, Opening Only, Immediate or Cancel, Fill or Kill, and Immediate or Cancel Intermarket Sweep) will not be disseminated by the Exchange in accordance with Rule 602 of Regulation NMS. In addition, executions resulting from these eQuote types will not be used by the Exchange's Aggregate Risk Manager to determine whether the Market Maker has exceeded the Allowable Exchange Percentage as more fully described in Rule 612. Exchange Rule 612, Aggregate Risk Manager (``ARM'') describes a risk protection feature similar to the Risk Protection Manager for orders, however ARM is only available for Market Makers and provides a counting program (``counting program'') for each Market Maker who is required to submit continuous two-sided quotations pursuant to Rule 604 in each of their appointed option classes. The counting program will count the number of contracts traded by the Market Maker (the ``specified time period''). The Market Maker may also establish for each option class an Allowable Engagement Percentage. The Exchange will establish a default specified time period and a default Allowable Engagement Percentage (``default settings'') on behalf of a Market Maker that has not established a specified time period and/or an Allowable Engagement Percentage.\17\ --------------------------------------------------------------------------- \17\ See Exchange Rule 612(a). --------------------------------------------------------------------------- The System will engage the Aggregate Risk Manager in a particular option class when the counting program has determined that a Market Maker has traded during the specified time period a number of contracts equal to or above their Allowable Engagement Percentage. The Aggregate Risk Manager will then automatically remove the Market Maker's Standard Quotations and Day eQuotes from the Exchange's disseminated quotation in all series of that particular option class until the Market Maker sends a notification to the System of the intent to reengage quoting and submits a new revised quotation.\18\ --------------------------------------------------------------------------- \18\ See Exchange Rule 612(b)(1). --------------------------------------------------------------------------- The Exchange now proposes to add the Settlement Auction Only eQuote (SAO eQuote), as defined in Interpretations and Policies .03 of Exchange Rule 503, to the list of eQuotes that are not subject to the Aggregate Risk Manager. An SAO eQuote is a special purpose eQuote available only during the SPIKES Special Settlement Auction and as such should be treated similarly to other limited time in force eQuote types. The Exchange also proposes to amend Interpretations and Policies of Rule 517 to adopt new subsection .02 which will state that an SAO eQuote will be considered a priority quote for trade allocation in accordance with Exchange Rule 514(e). To be considered a priority quote a Market Maker's quote must meet certain conditions as stipulated in the Exchange rules, one of which is that the [[Page 58644]] quote is valid width and two-sided.\19\ SAO eQuotes are a special purpose eQuote used to hedge or close a hedged position. A Market Maker using an SAO eQuote will not be in a position to place a quote on the opposite side of the market, as an execution of the opposite side eQuote would impair the ability of the Market Maker to hedge or close a hedged position. The Exchange does not wish to disadvantage a Market Maker for properly using an eQuote when it is not feasible for a Market Maker to otherwise meet the priority quote requirements (submission of a two-sided quote) with this type of eQuote. --------------------------------------------------------------------------- \19\ See Exchange Rule 517(b)(1)(i)(A). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposed rule change is consistent with Section 6(b) of the Act \20\ in general, and furthers the objectives of Section 6(b)(5) of the Act \21\ 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 regulating, clearing, settling, processing information with respect to, and 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. --------------------------------------------------------------------------- \20\ 15 U.S.C. 78f(b). \21\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that 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 they seek to ensure that SAOs may be freely submitted to the Exchange and that SAOs are not encumbered by risk protections designed for order types used during the course of regular trading. Additionally, the Exchange believes that removing SAO Orders from RPM and from certain MIAX Order Monitor features ensures that SAO Orders are available for their intended use to hedge or close a hedged position in SPIKES options. Similarly, the Exchange believes that removing SAO eQuotes from ARM ensures that SAO eQuotes are available for their intended use. Treating an SAO eQuote as a priority quote for allocation purposes ensures that a Market Maker with an SAO eQuote at the Opening Price could receive an execution without having to submit a two-sided quote. A Market Maker using an SAO eQuote to hedge or close a hedged position can not provide an SAO eQuote on the opposite side of the market without negatively impacting their original eQuote. Therefore, the Exchange believes it is just and equitable to permit SAO eQuotes to be treated as priority quotes for allocation purposes as it is not feasible for a Market Maker to meet the requirements necessary to establish a priority quote using SAO eQuotes. The Exchange believes that the proposed change promotes just and equitable principles of trade, and removes impediments to and perfects the mechanisms of a free and open market and a national market system and, in general, protects investors and the public interest, as the changes allow for SAO Orders and SAO eQuotes to be freely used for their intended purpose and will contribute to increased liquidity on the Exchange. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe the proposed rule change will impose any burden on inter-market competition as the proposed rule changes are designed to ensure that SAOs may be submitted to the Exchange to participate in the SPIKES Special Settlement Auction, and that once accepted these orders remain active in the System. The Exchange does not believe that the proposed rule change will cause an unnecessary burden on inter-market competition as SAOs are only used for the SPIKES Special Settlement Auction which is a special process unique to the Exchange. Additionally, the Exchange does not believe the proposed rule change will impose any burden on intra-market competition as the Rules apply equally to all Exchange Members, and all Members have the ability to submit SAOs. 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 Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be 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-MIAX-2018-34 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-2018-34. 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 [[Page 58645]] Number SR-MIAX-2018-34, and should be submitted on or before December 11, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-25249 Filed 11-19-18; 8:45 am] BILLING CODE 8011-01-P
![58642 Federal Register / Vol. 83, No. 224 / Tuesday, November 20, 2018 / Notices
For the Commission, by the Division of statements may be examined at the strategy orders in the appropriate SPY
Trading and Markets, pursuant to delegated places specified in Item IV below. The option series during the SPIKES Special
authority.15 Exchange has prepared summaries, set Settlement Auction on the SPIKES
Eduardo A. Aleman, forth in sections A, B, and C below, of expiration/final settlement date. Given
Assistant Secretary. the most significant aspects of such that SAOs are designed for the special
[FR Doc. 2018–25244 Filed 11–19–18; 8:45 am] statements. purpose of closing a hedged position
BILLING CODE 8011–01–P and are available for use only during the
A. Self-Regulatory Organization’s
SPIKES Special Settlement Auction, the
Statement of the Purpose of, and
Exchange proposes to amend its rules to
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule
remove SAO Orders from certain risk
COMMISSION Change
protection features offered by the
[Release No. 34–84594; File No. SR–MIAX– 1. Purpose Exchange.
2018–34] On June 28, 2018, the Exchange filed Specifically, the Exchange proposes to
with the Securities and Exchange amend Exchange Rule 519, MIAX Order
Self-Regulatory Organizations: Notice Commission (‘‘SEC’’) a proposal to list Monitor. The MIAX Order Monitor is a
of Filing of a Proposed Rule Change by and trade on the Exchange, options on risk management feature of the
Miami International Securities the SPIKESTM Index, a new index that Exchange’s System.6 Pursuant to
Exchange, LLC To Amend Exchange measures expected 30-day volatility of paragraph (a) of the Rule, the MIAX
Rule 519, MIAX Order Monitor; the SPDR S&P 500 ETF Trust.3 To Order Monitor provides an order price
Exchange Rule 519A, Risk Protection establish the settlement value for the protection for Market Orders to Sell,7
Monitor; and Rule 517, Quote Types Index, a settlement auction named the Market Orders to Buy or Sell,8 and Limit
Defined SPIKES Special Settlement Auction will Orders to Buy or Sell,9 in order to avoid
be conducted once per month, on the the occurrence of potential obvious or
November 14, 2018. catastrophic errors on the Exchange.
Pursuant to the provisions of Section day the settlement value for the Index
is to be calculated. During the SPIKES The MIAX Order Monitor will prevent
19(b)(1) of the Securities Exchange Act certain orders from executing or being
of 1934 (‘‘Act’’) 1 and Rule 19b–4 Special Settlement Auction, in addition
to any order types that may regularly be placed on the Book 10 at prices outside
thereunder,2 notice is hereby given that pre-set standard limits.11 The MIAX
on November 9, 2018, Miami accepted by the Exchange, the Exchange
will also accept settlement auction only Order Monitor will also cause the
International Securities Exchange, LLC System to prevent certain orders from
(‘‘MIAX Options’’ or ‘‘Exchange’’) filed orders (‘‘SAO Orders’’) and settlement
auction only eQuotes (‘‘SAO eQuotes’’). executing or being placed on the Book
with the Securities and Exchange if the size of the order exceeds the order
Commission (‘‘Commission’’) a (SAO Orders and SAO eQuotes are
collectively referred to as ‘‘SAOs’’).4 size protection designated by the
proposed rule change as described in Member.12 The MIAX Order Monitor
Items I and II below, which Items have SAOs are specific order types that allow
a Member 5 to voluntarily tag such an will also cause the System to reject any
been prepared by the Exchange. The orders that exceed the maximum
Commission is publishing this notice to order as a SPIKES strategy order.
The Exchange anticipates that market number of open orders held in the
solicit comments on the proposed rule System on behalf of a particular
participants that actively trade SPIKES
change from interested persons. Member, as designated by the
options may hedge their positions with
I. Self-Regulatory Organization’s SPY option series that will also be used Member.13 The MIAX Order Monitor
Statement of the Terms of Substance of to calculate the SPIKES exercise will also cause the System to reject any
the Proposed Rule Change settlement/final settlement value. orders that exceed the maximum
Market participants holding hedged number of open contracts represented
The Exchange is filing a proposal to by orders held in the System on behalf
amend Exchange Rule 519, MIAX Order SPIKES options positions may trade out
of their SPY option series on the of a particular Member, as designated by
Monitor; Exchange Rule 519A, Risk the Member.14
Protection Monitor; and Rule 517, Quote relevant SPIKES expiration/final
settlement date. Specifically, market The Exchange now proposes to amend
Types Defined. Exchange Rule 519, Interpretations and
The text of the proposed rule change participants holding short, hedged
SPIKES options could liquidate that Policies, to adopt new subsection .03, to
is available on the Exchange’s website at provide that the order protections of the
http://www.miaxoptions.com/rule- hedge by selling their SPY options
series, while traders holding long, MIAX Order Monitor pursuant to
filings/ at MIAX Options’ principal sections (b) (c) and (d) will not apply to
office, and at the Commission’s Public hedged SPIKES options could liquidate
their hedge by buying SPY option series. Settlement Auction Only Orders (SAO
Reference Room. Orders), as defined in Interpretations
In order to seek convergence with the
II. Self-Regulatory Organization’s SPIKE exercise/final settlement value, and Policies .03 of Exchange Rule 503.
Statement of the Purpose of, and these market participants may liquidate The Exchange does not believe that an
Statutory Basis for, the Proposed Rule their hedges by submitting SPIKES 6 The term ‘‘System’’ means the automated
Change
trading system used by the Exchange for the trading
3 See Securities Exchange Act Release No. 84417
In its filing with the Commission, the of securities. See Exchange Rule 100.
(October 12, 2018), 83 FR 52865 (October 18, 2018) 7 See Exchange Rule 519(a)(1).
Exchange included statements (SR–MIAX–2018–14) (Order Granting Approval of a 8 See Exchange Rule 519(a)(2).
concerning the purpose of and basis for Proposed Rule Change by Miami International 9 See Exchange Rule 519(a)(3).
the proposed rule change and discussed Securities Exchange, LLC to List and Trade Options
10 The term ‘‘Book’’ means the electronic book of
any comments it received on the on the SPIKESTM Index).
4 Id. buy and sell orders and quotes maintained by the
proposed rule change. The text of these 5 The term ‘‘Member’’ means an individual or System. See Exchange Rule 100.
11 See Exchange Rule 519(a).
organization approved to exercise the trading rights
15 17 CFR 200.30–3(a)(12). 12 See Exchange Rule 519(b).
associate with a Trading Permit. Members are
1 15 U.S.C. 78s(b)(1). 13 See Exchange Rule 519(c).
deemed ‘‘members’’ under the Exchange Act. See
2 17 CFR 240.19b–4. Exchange Rule 100. 14 See Exchange Rule 519(d).
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![Federal Register / Vol. 83, No. 224 / Tuesday, November 20, 2018 / Notices 58645
Number SR–MIAX–2018–34, and enforcement purposes. Without the service of process. Consequently, the
should be submitted on or before information provided through these SBS total cost for all nonresident SBS
December 11, 2018. Entity registration rules and forms, the Entities to appoint and maintain
For the Commission, by the Division of Commission could not effectively relationships with U.S. agents for
Trading and Markets, pursuant to delegated determine whether the applicant meets service of process is approximately
authority.22 the standards for registration or $3,872 per year.
Eduardo A. Aleman, implement policy objectives of the Non-resident SBS Entities also would
Assistant Secretary. Exchange Act. incur outside legal costs associated with
[FR Doc. 2018–25249 Filed 11–19–18; 8:45 am]
The information collected pursuant to obtaining an opinion of counsel. The
Rule 15Fb3–2 and Form SBSE–W allows staff estimates that each of the estimated
BILLING CODE 8011–01–P
the Commission to determine whether it 22 non-resident persons that likely will
is appropriate to allow an SBS Entity to apply to register as SBS Entities with
SECURITIES AND EXCHANGE withdraw from registration and to the Commission would incur, on
COMMISSION facilitate that withdrawal. Without this average, approximately $25,000 in
information, the Commission would be outside legal costs to obtain the opinion
Proposed Collection; Comment unable to effectively determine whether of counsel necessary to register, and that
Request it was appropriate to allow an SBS the total annualized cost for all
Entity to withdraw. In addition, it nonresident SBS Entities to obtain this
Upon Written Request, Copies Available would be more difficult for the
From: Securities and Exchange opinion of counsel would be
Commission to properly regulate SBS approximately $183,333. Nonresident
Commission, Office of FOIA Entities if it were unable to quickly
Services, 100 F Street NE, SBS Entities would also need to obtain
identify those that have withdrawn from a revised opinion of counsel after any
Washington, DC 20549–2736. the security-based swap business.
Extension: changes in the legal or regulatory
In 2017 there were approximately 55 framework that would impact the SBS
Rules 15Fb1–1 through 15Fb6–2 and entities that may need to register as SBS
Forms SBSE, SBSE–A, SBSE–BD, Entity’s ability to provide, or manner in
Entities. The Commission estimates that
SBSE–C and SBSE–W, SEC File No. which it provides, the Commission with
these Entities likely would incur a total
270–642, OMB Control No. 3235– prompt access to its books and records
burden of 9,825 hours per year to
0696. or that impacts the Commission’s ability
comply with Rules 15Fb1–1 through
Notice is hereby given that pursuant to inspect and examine the SBS Entity.
15Fb6–2 and Forms SBSE, SBSE–A,
to the Paperwork Reduction Act of 1995 We do not believe this would occur
SBSE–BD, SBSE–C and SBSE–W.
(‘‘PRA’’) (44 U.S.C. 3501 et seq.) the In addition, Rules 15Fb1–1 through frequently, and therefore estimate that
Securities and Exchange Commission 15Fb6–2 and Forms SBSE, SBSE–A, one non-resident entity may need to
(‘‘Commission’’) is soliciting comments SBSE–BD, SBSE–C and SBSE–W may recertify annually. Thus, the total
on the existing collection of information impose certain costs on non-resident ongoing cost associated with obtaining a
provided for in Rules 15Fb1–1 through persons that apply to be registered with revised opinion of counsel regarding the
15Fb6–2 and Forms SBSE, SBSE–A, the Commission as SBS Entities, new regulatory regime would be
SBSE–BD, SBSE–C and SBSE–W (17 including an initial and ongoing costs approximately $25,000 annually.
CFR 240.15Fb1–1 through 240.15Fb6–2, associated with obtaining an opinion of Consequently, the total annualized cost
and 17 CFR 249.1600, 249.1600a, counsel indicating that it can, as a burden associated with Rules 15Fb1–1
249.1600b, 249.1600c and 249.1601), matter of law, provide the Commission through 15Fb6–2 and Forms SBSE,
under the Securities Exchange Act of with access to its books and records and SBSE–A, SBSE–BD, SBSE–C and SBSE–
1934 (15 U.S.C. 78a et seq.). The submit to Commission examinations, W would be approximately $212,205
Commission plans to submit this and an ongoing cost associated with per year.
existing collection of information to the establishing and maintaining a Written comments are invited on: (a)
Office of Management and Budget relationship with a U.S. agent for Whether the proposed collection of
(‘‘OMB’’) for extension and approval. service of process. information is necessary for the proper
The Commission adopted Rules The staff estimates, based on internet performance of the functions of the
15Fb1–1 through 15Fb6–2 and Forms research,1 that it would cost each Commission, including whether the
SBSE, SBSE–A, SBSE–BD, SBSE–C and nonresident SBS Entity approximately information shall have practical utility;
SBSE–W on August 5, 2015 to create a $176 annually to appoint and maintain (b) the accuracy of the Commission’s
process to register SBS Entities. Forms a relationship with a U.S. agent for estimate of the burden of the proposed
SBSE, SBSE–A, and SBSE–BD and collection of information; (c) ways to
SBSE–C were designed to elicit certain 1 See, e.g., http://www.incorp.com/registered- enhance the quality, utility, and clarity
information from applicants. The agent-resident-agent-services.aspx (as of September of the information to be collected; and
21, 2018, $99 per state per year), https://
Commission uses the information ct.wolterskluwer.com/registered-agent-services?
(d) ways to minimize the burden of the
disclosed by applicants through the SBS mm_campaign=Enter_Campaign_Code_ collection of information on
Entity registration rules and forms to: (1) Here&keyword=registered%20agent&utm_ respondents, including through the use
source=Google&utm_medium=CPC&utm_ of automated collection techniques or
Determine whether an applicant meets campaign=RegisteredAgent&jadid=69563123457&
the standards for registration set forth in jap=1t3&jk=registered%20 other forms of information technology.
the provisions of the Exchange Act; and agent&jkId=gc:a8a8ae4cd4a6542cf014 Consideration will be given to
(2) develop an information resource a97541e8d183e:t1_p:k_registered%20agent:pl_ comments and suggestions submitted in
&jp=&js=1&jsid=35672&jt=1 (as of September 21, writing within 60 days of this
regarding SBS Entities where members 2018, $279 per year), and https://www.ailcorp.com/
of the public may obtain relevant, up-to- services/registered-agent (as of September 21, 2018, publication.
date information about SBS Entities, $149 per year). The staff sought websites that An agency may not conduct or
and where the Commission may obtain provided pricing information and a comprehensive sponsor, and a person is not required to
description of their registered agent services. We
information for examination and calculated our estimate by averaging the costs
respond to, a collection of information
provided on these three websites—($99 + $279 + under the PRA unless it displays a
22 17 CFR 200.30–3(a)(12). $149) ÷ 3 = $176. currently valid OMB control number.
VerDate Sep<11>2014 20:31 Nov 19, 2018 Jkt 247001 PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 E:\FR\FM\20NON1.SGM 20NON1](https://thefederalregister.org/doc/83_FR_58866/page/4.svg)
Document Created: 2018-11-20 07:59:20
Document Modified: 2018-11-20 07:59:20
| 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 58642 |
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