[Federal Register Volume 85, Number 121 (Tuesday, June 23, 2020)]
[Notices]
[Pages 37719-37721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13430]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89085; File No. SR-MIAX-2020-16]


Self-Regulatory Organizations; Miami International Securities 
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Exchange Rule 518, Complex Orders

June 17, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 12, 2020, Miami International Securities Exchange, LLC 
(``MIAX'' or the ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') a proposed rule change as described in 
Items I, II, and III 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 amend Exchange Rule 518, 
Complex Orders.
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings/ at MIAX'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 amend Exchange Rule 518, Complex Orders, 
to adopt a new order type, Complex Attributable Order.
    Currently, the Exchange offers an Attributable Order \3\ in its 
simple market.\4\ Current Exchange Rule 516(e) states that an 
Attributable Order is a market \5\ or limit order \6\ which displays 
the user firm ID for purposes of trading on the Exchange. Use of 
Attributable Orders is voluntary. Attributable Orders entered into the 
Exchange System \7\ will be available for execution but may not display 
the user firm ID for all Exchange processes. The Exchange will issue a 
Regulatory Circular specifying the Exchange processes and the class(es) 
of securities for which the Attributable Order type shall be 
available.\8\ Currently, an Attributable Order in the simple market 
will display the Executing Broker MPID \9\ when it triggers either a 
liquidity refresh pause,\10\ or a Route Timer.\11\ Attributable Orders 
were made available on the Exchange on June 17, 2013, for the 
aforementioned liquidity seeking events.\12\ The Attributable Order 
type is available for all option classes and can be activated on an 
order-by-order basis with the default set to off.\13\
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    \3\ See Exchange Rule 516(e).
    \4\ The Exchange has a Simple Order Book, which is the 
Exchange's regular electronic book of orders and quotes. See 
Exchange Rule 518(a)(15). The Exchange also has a Strategy Order 
book, which is the Exchange's electronic book of complex orders and 
complex quotes. See Exchange Rule 518(A)(17).
    \5\ A market order is an order to buy or sell a stated number of 
option contracts at the best price available at the time of 
execution. See Exchange Rule 516(a).
    \6\ A limit order is an order to buy or sell a stated number of 
option contracts at a specified price or better. See Exchange Rule 
516(b).
    \7\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
    \8\ See Exchange Rule 516(e).
    \9\ An MPID is a Market Participant Identifier used by the 
Exchange.
    \10\ See Exchange Rule 515(c)(3).
    \11\ See Exchange Rule 529(b)(2).
    \12\ See MIAX Options Regulatory Circular 2013-33, Attributable 
Order (June 13, 2013) available at https://www.miaxoptions.com/sites/default/files/circular-files/MIAX_RC_2013_33.pdf.
    \13\ Id.

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[[Page 37720]]

    The Exchange now proposes to adopt new subparagraph (8) to Exchange 
Rule 518(b) which will similarly provide that a Complex Attributable 
Order is a market or limit order which displays the user firm ID for 
purposes of trading on the Exchange. Use of Complex Attributable Orders 
is voluntary. Complex Attributable Orders entered into the Exchange 
System will be available for execution but may not display the user 
firm ID for all Exchange processes. Complex Attributable Orders will be 
used similarly for liquidity seeking events that occur on the 
Exchange's Strategy Book, such as Complex Auctions. If enabled, the 
MPID will be displayed on the MIAX Order Feed (``MOR'') and the MIAX 
Administrator Information Subscriber (``AIS'') Feed. The Exchange will 
issue a Regulatory Circular specifying the Exchange processes and the 
class(es) of securities for which the Complex Attributable Order type 
shall be available.\14\
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    \14\ The ability to display information pertaining to a single 
order depends upon the Exchange's ability to broadcast that 
information to its members. This is currently accomplished through 
the Exchange's market data products, which for example includes the 
Administrative Information Subscriber Feed (``AIS''). Thus, the 
functionality of a Complex Attributable Order is linked to what is 
technologically feasible through the Exchange's market data 
products. The definition of a Complex Attributable Order will 
acknowledge this relationship and allow the functionality of the 
Complex Attributable Order type to develop and be deployed 
correspondingly with technical advances related to its market data 
products. In its definition of a Complex Attributable Order the 
Exchange proposes to state that, ``Complex Attributable Orders 
entered into the Exchange System will be available for execution but 
may not display the user firm ID for all Exchange processes.'' This 
will serve to put MIAX members on notice that the functionality of a 
Complex Attributable Order to display the user firm ID, as it 
continually develops, may not be available during all Exchange 
processes.
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    The Exchange will announce the implementation date of the proposed 
rule change by Regulatory Circular to be published no later than 90 
days following the operative date of the proposed rule. The 
implementation date will be no later than 90 days following the 
issuance of the Regulatory Circular.
2. Statutory Basis
    MIAX believes that its proposed rule change is consistent with 
Section 6(b) of the Act \15\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act \16\ 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.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes its proposal to adopt a Complex Attributable 
Order promotes just and equitable principles of trade, and removes 
impediments to and perfects the mechanisms of a free and open market 
system and, in general, protects investors and the public interest by 
introducing an order type for use on the complex market that is 
currently available for use on the Exchange's simple market. Use of 
Complex Attributable Orders is voluntary and provides Members \17\ of 
the Exchange similar order types for use on both the simple market and 
the complex market for use during liquidity seeking events to 
facilitate executions.
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    \17\ 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.
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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 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.
    The Exchange does not believe that the proposed rule change to 
adopt a Complex Attributable Order will impose any burden on inter-
market competition but rather may increase competition among 
exchanges.\18\ The Exchange notes that it operates in a highly 
competitive market in which market participants can readily direct 
order flow to competing venues who offer similar functionality. The 
Exchange believes the proposed rule change will enhance competition 
among the various markets for complex order execution, potentially 
resulting in more active complex order trading on all exchanges.
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    \18\ The Nasdaq ISE Exchange and Nasdaq MRX Exchange currently 
offer Attributable Complex Orders. See Nasdaq ISE Exchange, Options 
3, Section 14, Complex Orders (b)(4); and Nasdaq MRX Exchange, 
Options 3, Section 14, Complex Orders (b)(4).
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    The Exchange does not believe that the proposed rule change to 
adopt a Complex Attributable Order will impose any burden on intra-
market competition as use of a Complex Attributable Order is voluntary 
and all Members of the Exchange have the option to use a Complex 
Attributable Order when submitting a complex order to the Exchange.

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 \19\ and Rule 19b-4(f)(6) \20\ 
thereunder.
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 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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    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-MIAX-2020-16 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MIAX-2020-16. This file 
number should be included on the

[[Page 37721]]

subject line if email is used. To help the Commission process and 
review your comments more efficiently, please use only one method. The 
Commission will post all comments on the Commission's internet website 
(http://www.sec.gov/rules/sro.shtml). Copies of the submission, all 
subsequent amendments, all written statements with respect to the 
proposed rule change that are filed with the Commission, and all 
written communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
MIAX-2020-16 and should be submitted on or before July 14, 2020.
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    \21\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-13430 Filed 6-22-20; 8:45 am]
BILLING CODE 8011-01-P


