83 FR 7820 - Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Expand the Short Term Option Series Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 36 (February 22, 2018)
Federal Register Volume 83, Issue 36 (February 22, 2018)
| Page Range | 7820-7824 | |
| FR Document | 2018-03566 |
[Federal Register Volume 83, Number 36 (Thursday, February 22, 2018)] [Notices] [Pages 7820-7824] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-03566] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82720; File No. SR-PEARL-2018-03] Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Expand the Short Term Option Series Program February 15, 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 February 12, 2018, MIAX PEARL, LLC (``MIAX PEARL'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') a proposed rule change '') 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 expand the Short Term Option Series Program to allow Monday expirations for options listed pursuant to the Short Term Option Series Program, including options on the SPDR S&P 500 ETF Trust (``SPY''). The text of the proposed rule change is available on the Exchange's website at http://www.miaxoptions.com/rule-filings/pearl at MIAX PEARL's 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. [[Page 7821]] A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend MIAX PEARL Rule 100, Definitions, and Rule 404, Series of Option Contracts Open for Trading, Interpretations and Policies .02, to expand the Short Term Option Series Program (``Program'') to permit the listing and trading of options series with Monday expirations that are listed pursuant to the Program, including options on SPY. The Exchange is also proposing to make a number of non-substantive, organizational changes to MIAX PEARL Rule 100 and Rule 404, Interpretations and Policies .02, for purposes of clarification and uniformity. Presently, MIAX PEARL Rule 100 defines a Short Term Options Series as ``a series in an option class that is approved for listing and trading on the Exchange in which the series is opened for trading pursuant to the Short Term Option Series Program provision of Rule 404, Interpretations and Policies .02.'' MIAX PEARL Rule 404, Interpretations and Policies .02, provides that a Short Term Option Series is a series in an option class that is approved for listing and trading on the Exchange in which the series is opened for trading on any Tuesday, Wednesday, Thursday or Friday that is a business day and that expires on the Wednesday or Friday of the next business week.\3\ The Exchange is proposing to consolidate the rule text from Rule 404, Interpretations and Policies .02, with and into MIAX PEARL Rule 100. The Exchange notes that this rule text consolidation will not result in any substantive changes, but is purely for clarification and uniformity. Additionally, the Exchange is proposing to amend the definition in MIAX PEARL Rule 100, to permit the listing of options series that expire on Mondays, in connection with its proposal to expand the Program to permit the listing and trading of options series with Monday expirations that are listed pursuant to the Program. --------------------------------------------------------------------------- \3\ See Exchange Rule 404, Interpretations and Policies .02. --------------------------------------------------------------------------- The Exchange notes that this proposed rule changed is substantially similar to the proposal by Nasdaq PHLX LLC (``Phlx'') which was recently approved by the Commission.\4\ --------------------------------------------------------------------------- \4\ See Securities Exchange Release No. 82611 (February 1, 2018), 83 FR 5473 (February 7, 2018) (SR-Phlx-2017-103) (Order approving proposed rule change). --------------------------------------------------------------------------- Specifically, the Exchange is proposing that it may open for trading series of options on any Monday that is a business day and that expires on the Monday of the next business week. The Exchange is also proposing to list Monday expiration series on Fridays that precede the expiration Monday by one business week plus one business day. Since MIAX PEARL Rule 404, Interpretations and Policies .02, already provides for the listing of short term option series on Fridays, the Exchange is not modifying this provision in MIAX PEARL Rule 100, to allow for Friday listing of Monday expiration series. However, the Exchange is amending MIAX PEARL Rule 100 to clarify that, in the case of a series that is listed on a Friday and expires on a Monday, that series must be listed one business week and one business day prior to that expiration (i.e., two Fridays prior to expiration). As part of this proposal, the Exchange is also proposing to amend MIAX PEARL Rule 100 to address the expiration of Monday expiration series when the Monday is not a business day. In that case, the Rule will provide that the series shall expire on the first business day immediately following that Monday. This procedure differs from the expiration date of Wednesday expiration series that are scheduled to expire on a holiday. In that case, the Wednesday expiration series shall expire on the first business day immediately prior to that Wednesday, e.g., Tuesday of that week.\5\ However, the Exchange believes that it is preferable to require Monday expiration series in this scenario to expire on the Tuesday of that week rather than the previous business day, e.g., the previous Friday, since the Tuesday is closer in time to the scheduled expiration date of the series than the previous Friday, and therefore may be more representative of anticipated market conditions. The Exchange also notes that Cboe Exchange, Inc. (``Cboe'') uses the same procedure for options on the S&P 500 index (``SPX'') with Monday expirations that are listed pursuant to its Nonstandard Expirations Pilot Program and that are scheduled to expire on a holiday.\6\ --------------------------------------------------------------------------- \5\ See id. \6\ See Cboe Rule 24.9(e)(1) (``If the Exchange is not open for business on a respective Monday, the normally Monday expiring Weekly Expirations will expire on the following business day. If the Exchange is not open for business on a respective Wednesday or Friday, the normally Wednesday or Friday expiring Weekly Expirations will expire on the previous business day.'') --------------------------------------------------------------------------- The Exchange also proposes to make corresponding changes to MIAX PEARL Rule 404, Interpretations and Policies .02, which sets forth the requirements for SPY options that are listed pursuant to the Short Term Options Series Program, to permit Monday SPY expirations (``Monday SPY Expirations''). Accordingly, the Exchange proposes to amend Interpretations and Policies .02 to Rule 404, to state that, with respect to Monday SPY Expirations, the Exchange may open for trading on any Friday or Monday that is a business day, series of options on SPY to expire on any Monday of the month that is a business day and is not a Monday in which Quarterly Options Series expire, provided that Monday SPY Expirations that are listed on a Friday must be listed at least one business week and one business day prior to the expiration. As with the current rules for Wednesday SPY Expirations, the Exchange will also amend Interpretations and Policies .02 to state that it may list up to five consecutive Monday SPY Expirations at one time, and may have no more than a total of five Monday SPY Expirations (in addition to the maximum of five Short Term Option Series expirations for SPY expiring on Friday and five Wednesday SPY Expirations). The Exchange will also clarify that, as with Wednesday SPY Expirations, Monday SPY Expirations will be subject to the provisions of this Rule. The interval between strike prices for the proposed Monday SPY Expirations will be the same as those for the current Short Term Option Series for Wednesday and Friday SPY Expirations. Specifically, the Monday SPY Expirations will have a $0.50 strike interval minimum. As is the case with other options series listed pursuant to the Short Term Option Series, the Monday SPY Expiration series will be P.M.-settled. Currently, for each option class eligible for participation in the Program, the Exchange is limited to opening thirty (30) series for each expiration date for the specific class. The thirty (30) series restriction does not include series that are open by other securities exchanges under their respective short term option rules; the Exchange may list these additional series that are listed by other exchanges.\7\ This thirty (30) series restriction shall apply to Monday SPY Expiration series as well. In addition, the Exchange will be able to list series that are listed by other exchanges, assuming they file similar rules with the Commission to list SPY options expiring on Mondays. --------------------------------------------------------------------------- \7\ See Exchange Rule 404, Interpretations and Policies .02(a). --------------------------------------------------------------------------- Finally, the Exchange is amending Interpretations and Policies .02(b) to [[Page 7822]] Rule 404, which addresses the listing of Short Term Options Series that expire in the same week as monthly or quarterly options series. Currently, that rule states that no Short Term Option Series may expire in the same week in which monthly option series on the same class expire (with the exception of Wednesday SPY Expirations) or, in the case of Quarterly Options Series, on an expiration that coincides with an expiration of Quarterly Option Series on the same class. As with Wednesday SPY Expirations, the Exchange is proposing to permit Monday SPY Expirations to expire in the same week as monthly options series on the same class. The Exchange believes that it is reasonable to extend this exemption to Monday SPY Expirations because Monday SPY Expirations and standard monthly options will not expire on the same trading day, as standard monthly options expire on Fridays. Additionally, the Exchange believes that not listing Monday SPY Expirations for one week every month because there was a monthly SPY expiration on the Friday of that week would create investor confusion. Relatedly, the Exchange is also amending Interpretations and Policies .02(b) to Rule 404 to clarify that Monday and Wednesday SPY Expirations may expire in the same week as monthly option series in the same class expire, but that no Short Term Option Series may expire on the same day as an expiration of Quarterly Option Series on the same class. This change will make that provision more consistent with the existing language in Interpretations and Policies .02 to Rule 404, which prohibits Wednesday SPY Expirations from expiring on a Wednesday in which Quarterly Options Series expire. The Exchange does not believe that any market disruptions will be encountered with the introduction of P.M.-settled Monday expirations. The Exchange has the necessary capacity and surveillance programs in place to support and properly monitor trading in the proposed Monday expiration series, including Monday SPY Expirations. The Exchange currently trades P.M.-settled Short Term Option Series that expire almost every Wednesday and Friday, which provide market participants a tool to hedge special events and to reduce the premium cost of buying protection. The Exchange notes that it has been listing Wednesday expirations pursuant to MIAX PEARL Rule 100 and Rule 404 since 2017.\8\ With the exception of Monday expiration series that are scheduled to expire on a holiday, the Exchange does not believe that there are any material differences between Monday expirations and Wednesday or Friday expirations for Short Term Option Series. --------------------------------------------------------------------------- \8\ See Securities Exchange Act Release No. 79947 (February 2, 2017), 82 FR 9865 (February 8, 2017) (SR-PEARL-2017-03). --------------------------------------------------------------------------- The Exchange seeks to introduce Monday expirations to, among other things, expand hedging tools available to market participants and to continue the reduction of the premium cost of buying protection. The Exchange believes that Monday expirations, similar to Wednesday and Friday expirations, will allow market participants to purchase an option based on their timing as needed and allow them to tailor their investment and hedging needs more effectively. As noted above, Phlx recently received approval to list Monday expirations for SPY options pursuant to its Short Term Options program. In addition, other exchanges currently permit Monday expirations for other options. For example, Cboe lists options on the SPX with a Monday expiration as part of its Nonstandard Expirations Pilot Program.\9\ --------------------------------------------------------------------------- \9\ See Cboe Rule 24.9(e)(1) (``The Exchange may open for trading Weekly Expirations on any broad-based index eligible for standard options trading to expire on any Monday, Wednesday, or Friday (other than the third Friday-of-the-month or days that coincide with an EOM expiration.''). --------------------------------------------------------------------------- The Exchange notes that this filing is substantially similar to a companion MIAX Options filing, expanding the Short Term Option Series Program to allow Monday expirations for options listed pursuant to the Program, including options on SPY. 2. Statutory Basis MIAX PEARL believes that its proposed rule change is consistent with Section 6(b) of the Act \10\ in general, and furthers the objectives of Section 6(b)(5) of the Act \11\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f(b). \11\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In particular, the Exchange believes the Short Term Option Series Program has been successful to date and that Monday expirations, including Monday SPY Expirations, simply expand the ability of investors to hedge risk against market movements stemming from economic releases or market events that occur throughout the month in the same way that the Short Term Option Series Program has expanded the landscape of hedging. Similarly, the Exchange believes Monday expirations, including Monday SPY Expirations, should create greater trading and hedging opportunities and flexibility, and will provide customers with the ability to tailor their investment objectives more effectively. While other exchanges do not currently list Monday SPY Expirations, the Exchange notes that Cboe currently permits Monday expirations for other options with a weekly expiration, such as options on the SPX. \12\ Additionally, Nasdaq PHLX LLC (``Phlx'') has recently received approval from the Commission to list Monday SPY Expirations for SPY options pursuant to its Short Term Options program.\13\ --------------------------------------------------------------------------- \12\ See supra note 9. \13\ See supra note 4. --------------------------------------------------------------------------- With the exception of Monday expiration series that are scheduled to expire on a holiday, the Exchange does not believe that there are any material differences between Monday expirations, including Monday SPY Expirations, and Wednesday or Friday expirations, including Wednesday and Friday SPY Expirations, for Short Term Option Series. The Exchange notes that it has been listing Wednesday expiration pursuant to MIAX PEARL Rule 100 and Rule 404 since 2017.\14\ The Exchange believes that it is consistent with the Act to treat Monday expiration series that expire on a holiday differently than Wednesday or Friday expiration series, since the proposed treatment for Monday expiration series will result in an expiration date that is closer in time to the scheduled expiration date of the series, and therefore may be more representative of anticipated market conditions. The Exchange also notes that Cboe uses the same procedure for SPX options with Monday expirations that are listed pursuant to its Nonstandard Expirations Pilot Program and that are scheduled to expire on a holiday. --------------------------------------------------------------------------- \14\ See supra note 8. --------------------------------------------------------------------------- Given the similarities between Monday SPY Expiration series and Wednesday and Friday SPY Expiration series, the Exchange believes that applying the provisions in Interpretations and Policies .02 to Rule 404 that currently apply to Wednesday SPY Expirations, to Monday SPY Expirations, is justified. For example, the Exchange believes that allowing [[Page 7823]] Monday SPY Expirations and monthly SPY expirations in the same week will benefit investors and minimize investor confusion by providing Monday SPY Expirations in a continuous and uniform manner. The Exchange also believes that it is appropriate to amend Interpretations and Policies .02(b) to Rule 404 to clarify that no Short Term Option Series may expire on the same day as an expiration of Quarterly Option Series on the same class. This change will make that provision more consistent with the existing language in Interpretations and Policies .02 to Rule 404 that prohibit Wednesday SPY Expirations from expiring on a Wednesday in which Quarterly Options Series expire. Finally, the Exchange represents that it has an adequate surveillance program in place to detect manipulative trading in Monday expirations, including Monday SPY Expirations, in the same way that it monitors trading in the current Short Term Option Series. The Exchange also represents that it has the necessary systems capacity to support the new options series. The Exchange believes the proposed rule text organizational changes promote just and equitable principles of trade and remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed rule text organizational change conforms its rules to the rules of other exchanges. As such, the proposed amendments would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national exchange system. In particular, the Exchange believes that the proposed changes will provide greater clarity to Members and the public regarding the Exchange's Rules. It is in the public interest for rules to be accurate and concise so as to eliminate the potential for confusion. 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 notes that having Monday expirations is not a novel proposal, as Cboe currently lists and trades short-term SPX options with a Monday expiration, and Phlx has recently received approval from the Commission to list Monday SPY expirations. The Exchange does not believe the proposal will impose any burden on intra-market competition, as all market participants will be treated in the same manner under this proposal. Additionally, the Exchange does not believe the proposal will impose any burden on inter- market competition, as nothing prevents the other options exchanges from proposing similar rules to list and trade short-term options series with Monday expirations. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(6) thereunder.\16\ --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(3)(A). \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intention to file 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. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days from the date of filing. However, Rule 19b-4(f)(6)(iii) \17\ 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 Commission notes that it recently approved Phlx's substantially similar proposal to list and trade Monday SPY Expirations.\18\ The Exchange has stated that waiver of the operative delay will allow the Exchange to list and trade Monday SPY Expirations as soon as possible, and therefore, promote competition among the option exchanges.\19\ For these reasons, the Commission believes that the proposed rule change presents no novel issues and that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest, and will allow the Exchange to remain competitive with other exchanges. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposal effective upon filing.\20\ --------------------------------------------------------------------------- \17\ 17 CFR 240.19b-4(f)(6)(iii). \18\ See supra note 4. \19\ The Exchange also proposes a number of non-substantive changes to its rulebook. The Exchange stated these changes will help to provide clarity and therefore are in the public interest. \20\ 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 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments [ssquf] Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or [ssquf] Send an email to [email protected]. Please include File Number SR-PEARL-2018-03 on the subject line. Paper Comments [ssquf] 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-PEARL-2018-03. 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 [[Page 7824]] 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-PEARL-2018-03 and should be submitted on or before March 15, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-03566 Filed 2-21-18; 8:45 am] BILLING CODE 8011-01-P
![7820 Federal Register / Vol. 83, No. 36 / Thursday, February 22, 2018 / Notices
The proposed fee structure is Paper Comments SECURITIES AND EXCHANGE
designed to ensure a fair and reasonable COMMISSION
use of Exchange resources by allowing • Send paper comments in triplicate
the Exchange to recoup costs while to Secretary, Securities and Exchange
[Release No. 34–82720; File No. SR–
continuing to offer its data products at Commission, 100 F Street NE,
PEARL–2018–03]
competitive rates to firms. Washington, DC 20549–1090.
C. Self-Regulatory Organization’s All submissions should refer to File Self-Regulatory Organizations; MIAX
Statement on Comments on the Number SR–NASDAQ–2018–010. This PEARL, LLC; Notice of Filing and
Proposed Rule Change Received From file number should be included on the Immediate Effectiveness of a Proposed
Members, Participants, or Others subject line if email is used. To help the Rule Change To Expand the Short
Commission process and review your Term Option Series Program
No written comments were either
comments more efficiently, please use
solicited or received. February 15, 2018.
only one method. The Commission will
III. Date of Effectiveness of the post all comments on the Commission’s Pursuant to the provisions of Section
Proposed Rule Change and Timing for internet website (http://www.sec.gov/ 19(b)(1) of the Securities Exchange Act
Commission Action rules/sro.shtml). Copies of the of 1934 (‘‘Act’’) 1 and Rule 19b–4
submission, all subsequent thereunder,2 notice is hereby given that
Because the foregoing proposed rule
amendments, all written statements on February 12, 2018, MIAX PEARL,
change does not: (i) Significantly affect
the protection of investors or the public with respect to the proposed rule LLC (‘‘MIAX PEARL’’ or ‘‘Exchange’’)
interest; (ii) impose any significant change that are filed with the filed with the Securities and Exchange
burden on competition; and (iii) become Commission, and all written Commission (‘‘Commission’’) a
operative for 30 days from the date on communications relating to the proposed rule change ’’) a proposed rule
which it was filed, or such shorter time proposed rule change between the change as described in Items I and II
as the Commission may designate, it has Commission and any person, other than below, which Items have been prepared
become effective pursuant to Section those that may be withheld from the by the Exchange. The Commission is
19(b)(3)(A)(iii) of the Act 41 and public in accordance with the publishing this notice to solicit
subparagraph (f)(6) of Rule 19b–4 provisions of 5 U.S.C. 552, will be comments on the proposed rule change
thereunder.42 available for website viewing and from interested persons.
At any time within 60 days of the printing in the Commission’s Public I. Self-Regulatory Organization’s
filing of the proposed rule change, the Reference Room, 100 F Street NE, Statement of the Terms of Substance of
Commission summarily may Washington, DC 20549 on official the Proposed Rule Change
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 The Exchange is filing a proposal to
action is: (i) Necessary or appropriate in filing also will be available for expand the Short Term Option Series
the public interest; (ii) for the protection inspection and copying at the principal Program to allow Monday expirations
of investors; or (iii) otherwise in office of the Exchange. All comments for options listed pursuant to the Short
furtherance of the purposes of the Act. received will be posted without change. Term Option Series Program, including
If the Commission takes such action, the Persons submitting comments are options on the SPDR S&P 500 ETF Trust
Commission shall institute proceedings cautioned that we do not redact or edit (‘‘SPY’’).
to determine whether the proposed rule personal identifying information from
should be approved or disapproved. The text of the proposed rule change
comment submissions. You should is available on the Exchange’s website at
IV. Solicitation of Comments submit only information that you wish http://www.miaxoptions.com/rule-
to make available publicly. All filings/pearl at MIAX PEARL’s principal
Interested persons are invited to
submissions should refer to File office, and at the Commission’s Public
submit written data, views, and
Number SR–NASDAQ–2018–010 and Reference Room.
arguments concerning the foregoing,
including whether the proposed rule should be submitted on or before March
15, 2018. II. Self-Regulatory Organization’s
change is consistent with the Act.
Statement of the Purpose of, and
Comments may be submitted by any of For the Commission, by the Division of
Statutory Basis for, the Proposed Rule
the following methods: Trading and Markets, pursuant to delegated
authority.43 Change
Electronic Comments
Eduardo A. Aleman, In its filing with the Commission, the
• Use the Commission’s internet Assistant Secretary. Exchange included statements
comment form (http://www.sec.gov/ [FR Doc. 2018–03568 Filed 2–21–18; 8:45 am] concerning the purpose of and basis for
rules/sro.shtml); or the proposed rule change and discussed
BILLING CODE 8011–01–P
• Send an email to rule-comments@ any comments it received on the
sec.gov. Please include File Number SR– proposed rule change. The text of these
NASDAQ–2018–010 on the subject line. statements may be examined at the
places specified in Item IV below. The
daltland on DSKBBV9HB2PROD with NOTICES
41 15 U.S.C. 78s(b)(3)(A)(iii). Exchange has prepared summaries, set
42 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
forth in sections A, B, and C below, of
the Commission written notice of its intent to file the most significant aspects of such
the proposed rule change at least five business days statements.
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
1 15 U.S.C. 78s(b)(1).
Commission. The Exchange has satisfied this
requirement. 43 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.
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![7824 Federal Register / Vol. 83, No. 36 / Thursday, February 22, 2018 / Notices
those that may be withheld from the I. Self-Regulatory Organization’s protection mechanism is the ARM. The
public in accordance with the Statement of the Terms of Substance of purpose of the ARM is to remove the
provisions of 5 U.S.C. 552, will be the Proposed Rule Change Member from the market, once certain
available for website viewing and The Exchange is filing a proposal to pre-determined trading limit thresholds
printing in the Commission’s Public amend Exchange Rule 517A, Aggregate (set up in advance by the Member) have
Reference Room, 100 F Street NE, Risk Manager for EEMs (‘‘ARM–E’’), and been triggered, to limit the risk exposure
Washington, DC 20549, on official Rule 517B, Aggregate Risk Manager for of the Member.
business days between the hours of The Exchange now proposes to
Market Makers (‘‘ARM–M’’).
10:00 a.m. and 3:00 p.m. Copies of the The text of the proposed rule change further enhance the ARM to introduce
filing also will be available for an SSP feature. The SSP feature, which
is available on the Exchange’s website at
is optional, will provide an additional
inspection and copying at the principal http://www.miaxoptions.com/rule-
level of granularity to the ARM, as this
office of the Exchange. All comments filings/pearl at MIAX PEARL’s principal
protection will apply only to quotes 4
received will be posted without change. office, and at the Commission’s Public
and orders on the same side (bid or
Persons submitting comments are Reference Room.
offer) of an individual option.5 Members
cautioned that we do not redact or edit II. Self-Regulatory Organization’s who avail themselves of the SSP feature
personal identifying information from Statement of the Purpose of, and will have even greater precision to tailor
comment submissions. You should Statutory Basis for, the Proposed Rule their risk tolerance level.
submit only information that you wish Change To implement the SSP feature for
to make available publicly. All Electronic Exchange Members 6 the
submissions should refer to File In its filing with the Commission, the
Exchange included statements Exchange proposes to adopt new
Number SR–PEARL–2018–03 and subsection .02 to Interpretations and
concerning the purpose of and basis for
should be submitted on or before March Policies of Rule 517A, entitled EEM
the proposed rule change and discussed
15, 2018. Single Side Protection. Subsection .02
any comments it received on the
For the Commission, by the Division of proposed rule change. The text of these will provide that an EEM may
Trading and Markets, pursuant to delegated statements may be examined at the determine to engage the EEM Single
authority.21 places specified in Item IV below. The Side Protection (‘‘SSP’’) feature for
Eduardo A. Aleman, Exchange has prepared summaries, set orders delivered via the MEO Interface 7
forth in sections A, B, and C below, of by MPID.8 If engaged, if the full
Assistant Secretary. remaining size of an EEM’s order, in an
[FR Doc. 2018–03566 Filed 2–21–18; 8:45 am] the most significant aspects of such
statements. individual option, is exhausted by a
BILLING CODE 8011–01–P trade, the System 9 will trigger the SSP.
A. Self-Regulatory Organization’s When triggered, the System will cancel
Statement of the Purpose of, and all open orders and block all new
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule inbound orders delivered via the MEO
COMMISSION Change Interface, for that particular side of that
1. Purpose individual option for that MPID. The
[Release No. 34–82721; File No. SR– System will provide a notification
PEARL–2018–01] The Exchange proposes to amend message to the EEM that the SSP has
Rule 517A, Aggregate Risk Manager for been triggered. The block will remain in
Self-Regulatory Organizations; MIAX EEMs (‘‘ARM–E’’), and Rule 517B, effect until the EEM notifies the
PEARL LLC; Notice of Filing and Aggregate Risk Manager for Market Exchange (in a manner required by the
Immediate Effectiveness of a Proposed Makers (‘‘ARM–M’’), to enhance the
Rule Change To Amend Rule 517A, Aggregate Risk Manager (‘‘ARM’’) 4 The term ‘‘quote’’ or ‘‘quotation’’ means a bid or
Aggregate Risk Manager for EEMs protections available to Members 3 on offer entered by a Market Maker as a firm order that
the Exchange. Specifically, the updates the Market Maker’s previous bid or offer,
(‘‘ARM–E’’), and Rule 517B, Aggregate if any. When the term order is used in these Rules
Risk Manager for Market Makers Exchange proposes to adopt a single and a bid or offer is entered by the Market Maker
(‘‘ARM–M’’) side protection (‘‘SSP’’) feature, which in the option series to which such Market Maker is
is an additional, optional, and more registered, such order shall, as applicable,
February 15, 2018. granular feature of the ARM protection constitute a quote or quotation for purposes of these
Rules. See Exchange Rule 100.
that is currently offered by the
Pursuant to the provisions of Section 5 The term ‘‘individual option’’ means an option
Exchange. Accordingly, the Exchange contract that is either a put or a call, covering a
19(b)(1) of the Securities Exchange Act
proposes to modify (i) Interpretations specific underlying security and having a specific
of 1934 (‘‘Act’’) 1 and Rule 19b–4 and Policies of Rule 517A, to adopt new exercise price and expiration date. See Exchange
thereunder,2 notice is hereby given that subsection .02, EEM Single Side Rule 100.
on February 6, 2018, MIAX PEARL, LLC Protection; and (ii) Interpretations and
6 The term ‘‘Electronic Exchange Member’’ or
(‘‘MIAX PEARL’’ or ‘‘Exchange’’) filed ‘‘EEM’’ means the holder of a Trading Permit who
Policies .01, of Rule 517B, to adopt new is a Member representing as agent Public Customer
with the Securities and Exchange subsection (c), Market Maker Single Orders or Non-Customer Orders on the Exchange
Commission (‘‘Commission’’) a Side Protection. and those non-Market Maker Members conducting
proposed rule change as described in The Exchange currently offers a proprietary trading. Electronic Exchange Members
Items I and II below, which Items have are deemed ‘‘members’’ under the Exchange Act.
number of risk protection mechanisms See Exchange Rule 100.
been prepared by the Exchange. The to its Members. One important risk
daltland on DSKBBV9HB2PROD with NOTICES
7 The term ‘‘MEO Interface’’ means a binary order
Commission is publishing this notice to interface used for submitting certain order types (as
solicit comments on the proposed rule 3 The term ‘‘Member’’ means an individual or set forth in Rule 516) to the MIAX PEARL System.
change from interested persons. organization that is registered with the Exchange See Exchange Rule 100.
8 The term ‘‘MPID’’ means unique market
pursuant to Chapter II of the MIAX PEARL Rules
for purposes of trading on the Exchange as an participant identifier. See Exchange Rule 100.
21 17 CFR 200.30–3(a)(12). ‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’ 9 The term ‘‘System’’ means the automated
1 15 U.S.C. 78s(b)(1). Members are deemed ‘‘members’’ under the trading system used by the Exchange for the trading
2 17 CFR 240.19b–4. Exchange Act. See Exchange Rule 100. of securities. See Exchange Rule 100.
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Document Created: 2018-02-22 02:50:46
Document Modified: 2018-02-22 02:50:46
| 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 7820 |
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