
[Federal Register Volume 84, Number 43 (Tuesday, March 5, 2019)]
[Notices]
[Pages 7963-7965]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03881]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85207; File No. SR-EMERALD-2019-09]


Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Establish MIAX Emerald Top of Market (``ToM'') Data Feed, MIAX Emerald 
Complex Top of Market (``cToM'') Data Feed, MIAX Emerald Administrative 
Information Subscriber (``AIS'') Data Feed, and MIAX Emerald Order Feed 
(``MOR'')

February 27, 2019.
    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 February 26, 2019, MIAX Emerald, LLC (``MIAX Emerald'' 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to establish certain market data 
products. The text of the proposed rule change is available on the 
Exchange's website at http://www.miaxoptions.com/rule-filings/emerald, 
at MIAX Emerald'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.

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

1. Purpose
    The Exchange proposes to establish the MIAX Emerald Top of Market 
(``ToM'') data feed, MIAX Emerald Complex Top of Market (``cToM'') data 
feed, MIAX Emerald Administrative Information Subscriber (``AIS'') data 
feed, and MIAX Emerald Order Feed (``MOR'').
    ToM provides market participants with a direct data feed that 
includes the Exchange's best bid and offer, with aggregate size, and 
last sale information, based on order and quoting interest on the 
Exchange. The ToM data feed includes data that is identical to the data 
sent to the processor for the Options Price Reporting Authority 
(``OPRA''). The ToM and OPRA data leave the MIAX Emerald System \3\ at 
the same time, as required under Section 5.2(c)(iii)(B) of the Limited 
Liability Company Agreement of the Options Price Reporting Authority 
LLC (the ``OPRA Plan''), which prohibits the dissemination of 
proprietary information on any more timely basis than the same 
information is furnished to the OPRA system for inclusion in OPRA's 
consolidated dissemination of options information. ToM will also 
contain a feature that provides the number of Priority Customer \4\ 
contracts that are included in the size associated with the Exchange's 
best bid and offer.
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    \3\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
    \4\ The term ``Priority Customer'' means a person or entity that 
(i) is not a broker or dealer in securities, and (ii) does not place 
more than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s). See Exchange Rule 
100.
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    cToM will provide subscribers with the same information as the ToM 
market data product as it relates to the Strategy Book, i.e., the 
Exchange's best bid and offer for a complex strategy, with aggregate 
size, based on displayable order and quoting interest in the complex 
strategy on the Exchange. cToM will also provide subscribers with the 
identification of the complex strategies currently trading on MIAX 
Emerald; complex strategy last sale information; and the status of 
securities underlying the complex strategy (e.g., halted, open, or 
resumed). cToM is distinct from ToM, and anyone wishing to receive cToM 
data must subscribe to cToM regardless of whether they are a current 
ToM subscriber. ToM subscribers are not required to subscribe to cToM, 
and cToM subscribers are not required to subscribe to ToM.
    AIS provides market participants with a direct data feed that 
allows subscribers to receive real-time updates of products traded on 
MIAX Emerald, trading status for MIAX Emerald and products traded on 
MIAX Emerald, and liquidity seeking event notifications. The AIS market 
data feed includes opening imbalance condition information, opening 
routing information, expanded quote range information, post-halt 
notifications, and liquidity refresh condition information. AIS real-
time messages are disseminated over multicast to achieve a fair 
delivery mechanism. AIS notifications provide current electronic system 
status allowing subscribers to take necessary actions immediately.
    MOR provides market participants with a direct data feed that 
allows subscribers to receive real-time updates of options orders, 
products traded on MIAX Emerald, MIAX Emerald Options System status, 
and MIAX Emerald Options Underlying trading status. Subscribers to the 
data feed will get a list of all options symbols and strategies that 
will be traded and sourced on that feed at the start of every session.
    The proposed data products provide valuable information that can 
help subscribers make informed investment

[[Page 7964]]

decisions, and operate in the same manner as similar data products 
offered by the Miami International Securities Exchange, LLC (``MIAX 
Options''), namely the MIAX Options Top of Market data product (``MIAX 
ToM''),\5\ MIAX Options Complex Top of Market data product (``MIAX 
cToM''),\6\ MIAX Options Administrative Information Subscriber data 
product (``AIS''),\7\ and the MIAX Options Order Feed data product 
(``MOR'').\8\ Each of these proposed data products is available to 
members and non-members, and to both professional and non-professional 
subscribers.
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    \5\ For a complete description of the MIAX Options ToM data 
product, see Securities Exchange Act Release Nos. 69007 (February 
28, 2013), 78 FR 14617 (March 6, 2013) (SR-MIAX-2013-05); 69518 (May 
6, 2013), 78 FR 27462 (May 10, 2013) (SR-MIAX-2013-18); 73395 
(October 21, 2014), 79 FR 63979 (October 27, 2014) (SR-MIAX-2014-
53).
    \6\ See Securities Exchange Act Release No. 79146 (October 24, 
2016), 81 FR 75171 (October 28, 2016) (SR-MIAX-2016-36).
    \7\ See Securities Exchange Act Release Nos. 69320 (April 5, 
2013), 78 FR 21661 (April 11, 2013) (SR-MIAX-2013-13); 82740 
(February 20, 2018), 83 FR 8304 (February 26, 2018) (SR-MIAX-2018-
04).
    \8\ For a complete description of the MOR data product, see 
Securities Exchange Act Release No. 74759 (April 17, 2015), 80 FR 
22749 (April 23, 2015) (SR-MIAX-2015-28).
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    The Exchange represents that it will make ToM, cToM, AIS, and MOR 
equally available to any market participant that wishes to subscribe to 
any of those products. The Exchange is not presently going to charge 
market participants any fees associated with these market data 
products. If, and when, the Exchange proposes to establish such fees, 
the Exchange will submit a proposed rule change under 19b-4.
2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) \9\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) \10\ of the Act in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanisms of a free and open market and a national market system and, 
in general, to protect investors and the public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The ToM market data product is designed to promote just and 
equitable principles of trade by providing all subscribers with top of 
market data that includes the Exchange's best bid and offer, with 
aggregate size, and last sale information, based on order and quoting 
interest on the Exchange that should enable them to make informed 
decisions on trading on MIAX Emerald by using the ToM data to assess 
current market conditions that directly affect such decisions.
    The cToM market data product is designed to promote just and 
equitable principles of trade by providing all subscribers with top of 
market data that includes similar information provide via ToM but for 
the Exchange's complex order Strategy Book \11\ including the 
Exchange's best bid and offer for a complex strategy, with aggregate 
size, based on displayable order and quoting interest in the complex 
strategy on the Exchange that should enable subscribers to make 
informed decisions on trading on MIAX Emerald by using the cToM data to 
assess current market conditions that directly affect such decisions.
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    \11\ The ``Strategy Book'' is the Exchange's electronic book of 
complex orders and complex quotes. See Exchange Rule 518(a)(17).
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    The MOR market data product is designed to promote just and 
equitable principles of trade by providing all subscribers with limit 
order book data that should enable subscribers to make informed 
decisions on trading in MIAX Emerald options by using the MOR data to 
assess current market conditions that directly affect such decisions. 
The proposed market data product facilitates transactions in 
securities, removes impediments to and perfect the mechanisms of a free 
and open market and a national market system by enhancing the 
subscribers' ability to make decisions on trading strategy, and by 
providing data that should help bring about such decisions in a timely 
manner to the protection of investors and the public interest. The 
market data provided by MOR removes impediments to, and is designed to 
further perfect, the mechanisms of a free and open market and a 
national market system by making the MIAX Emerald market more 
transparent and accessible to market participants making routing 
decisions concerning their options orders. The MOR market data product 
is also designed to protect investors and the public interest by 
providing data to subscribers that is already currently available on 
other exchanges and will enable MIAX Emerald to compete with such other 
exchanges, thereby offering market participants with additional data in 
order to seek the market center with the best price and the most 
liquidity on which to execute their transactions, all to the benefit of 
investors and the public interest, and to the marketplace as a whole.
    The AIS market data product is designed to promote just and 
equitable principles of trade by providing all subscribers with 
administrative information concerning product states and liquidity 
seeking events on the Exchange that should enable them to make informed 
decisions on trading in MIAX Emerald options by using the AIS data to 
assess current market conditions that directly affect such decisions. 
The proposed market data product facilitates transactions in 
securities, removes impediments to and perfect the mechanisms of a free 
and open market and a national market system by enhancing the 
subscribers' ability to make decisions on trading strategy, and by 
providing data that should help bring about such decisions in a timely 
manner to the protection of investors and the public interest. The 
market data provided by AIS removes impediments to, and is designed to 
further perfect, the mechanisms of a free and open market and a 
national market system by making the MIAX Emerald market more 
transparent and accessible to market participants making routing 
decisions concerning their options orders. The AIS market data product 
is also designed to protect investors and the public interest by 
providing data to subscribers that is already currently available on 
other exchanges and will enable MIAX Emerald to compete with such other 
exchanges, thereby offering market participants with additional data in 
order to seek the market center with the best price and the most 
liquidity on which to execute their transactions, all to the benefit of 
investors and the public interest, and to the marketplace as a whole.
    The proposed ToM, cToM, AIS, and MOR market data products 
facilitate transactions in securities, remove impediments to and 
perfect the mechanisms of a free and open market and a national market 
system by enhancing the subscriber's ability to make decisions on 
trading strategy and by providing data which should help bring about 
such decisions in a timely manner to the protection of investors and 
the public interest. The market data provided by ToM, cToM, AIS and MOR 
removes impediments to, and is designed to further perfect, the 
mechanisms of a free and open market and a national market system by 
making the MIAX Emerald market more transparent and accessible to 
market participants making routing decisions concerning their options 
orders. The Exchange notes that the data provided on each of these data 
products are

[[Page 7965]]

similar to and provide the same data as provided by data products of 
MIAX Options with respect to options traded on that exchange.\12\ The 
Exchange believes that it is in the public interest to make similar 
information available with respect to options traded on MIAX Emerald.
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    \12\ See supra notes 5, 6, 7, and 8.
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    The proposed ToM, cToM, AIS, and MOR market data products are also 
designed to protect investors and the public interest by providing data 
to subscribers that is already currently available on other competing 
exchanges which are similar to MIAX Emerald \13\ and will enable MIAX 
Emerald to compete with such other exchanges, thereby offering market 
participants with additional data in order to seek the market center 
with the best price and the most liquidity on which to execute their 
transactions, all to the benefit of investors and the public interest, 
and to the marketplace as a whole.
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    \13\ Nasdaq GEMX, LLC (``GEMX'') is a maker-taker pricing model 
exchange similar to MIAX Emerald and has similar data products to 
ToM and MOR available to GEMX users, including the Nasdaq GEMX Top 
Quote Feed and Nasdaq GEMX Order Feed. See Nasdaq GEMX Options 7, 
Pricing Schedule, Section 7, Market Data.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. On the contrary, 
the Exchange believes that the new market data products will enhance 
competition in the U.S. options markets by providing users of MIAX 
Emerald market data products that are similar to that which are 
currently provided on other competing options exchanges.\14\
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    \14\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(6) \16\ 
thereunder.
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    \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 intent 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.
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    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. The Exchange states that waiver of the 
operative delay will enable the Exchange to make the ToM, cToM, AIS, 
and MOR market data products available to subscribers at the time of 
the launch of trading on the Exchange, which is scheduled for March 1, 
2019.\18\ The Commission believes that waiver of the 30-day operative 
delay is consistent with the protection of investors and the public 
interest and hereby waives the 30-day operative delay and designates 
the proposal operative on March 1, 2019.\19\
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    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ See Securities Exchange Act Release No. 84891 (December 20, 
2018), 83 FR 67421 (December 28, 2018) (File No. 10-233) (order 
approving application of MIAX EMERALD, LLC for registration as a 
national securities exchange.)
    \19\ 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).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR- EMERALD-2019-09 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-EMERALD-2019-09. 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. All submissions should refer to 
File Number SR-EMERALD-2019-09 and should be submitted on or before 
March 26, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-03881 Filed 3-4-19; 8:45 am]
 BILLING CODE 8011-01-P


