Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 37849 

72 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See MIAX Regulatory Circular 2016–43, October 

20, 2016. 

4See Securities Exchange Act Release No. 79072 

(October 7, 2016), 81 FR 71131 (October 14, 2016) 

(SR–MIAX–2016–26). 

5The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

6The term ‘‘Member’’ means an individual or 

organization approved to exercise the trading rights 

associated with a Trading Permit. Members are 

deemed ‘‘members’’ under the Exchange Act. See 

Exchange Rule 100. 

7See supra note 4. 

8A ‘‘Vertical Spread’’ is a complex strategy 

consisting of the purchase of one call (put) option 

and the sale of another call (put) option overlying 

the same security that have the same expiration but 

different strike prices. See Exchange Rule 518.05(a). 

9A ‘‘Calendar Spread’’ is a complex strategy 

consisting of the purchase of one call (put) option 

and the sale of another call (put) option overlying 

the same security that have different expirations but 

the same strike price. See Exchange Rule 518.05(b). 

10See Exchange Rule 518.05(a). 

11See Exchange Rule 518.05(b). 

12See Exchange Rule 518.05(c). 

13The standard stock deliverable is 100 shares. 

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 Section, 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 such 

filing also will be available for 

inspection and copying at the principal 

office of OCC and on OCC’s website at 

https://www.theocc.com/about/ 

publications/bylaws.jsp. 

All comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal or 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–OCC–2017–020 and should 

be submitted on or before August 17, 

2018. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.72

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16535 Filed 8–1–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83726; File No. SR–MIAX– 

2018–16] 

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 

July 27, 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 July 16, 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. 

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, to update its rule text regarding 

stock-option orders, in connection with 

the upcoming launch of such orders on 

the Exchange. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/ 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 

The Exchange proposes to amend 

Exchange Rule 518, Complex Orders, to 

update its rule text regarding stockoption orders, in connection with the 

upcoming launch of such orders on the 

Exchange. In particular, the Exchange is 

proposing to (i) adopt new rule text to 

introduce a new price protection feature 

for certain stock-option strategies, (ii) 

delete certain existing rule text to 

eliminate an unnecessary execution 

price restriction for the stock 

component of a stock-option strategy, 

and (iii) make certain minor clarifying 

edits to existing rule text. 

Complex orders began trading on the 

Exchange on October 24, 2016.3 In its 

rule filing to establish the trading of 

complex orders, the Exchange adopted 

rules for handling stock-option orders.4

The Exchange also indicated that it 

would determine when stock-option 

orders would be made available for 

trading in the System 5 and would 

communicate such determination to 

Members 6 via Regulatory Circular.7 The 

Exchange is now proposing to make 

certain changes to its rule text, in 

connection with the upcoming launch 

of such orders on the Exchange, which 

is scheduled for the third quarter of 

2018. 

Currently, the Exchange provides 

price protection for certain complex 

option trading strategies such as Vertical 

Spreads 8 and Calendar Spreads 9 to 

prevent executions at potentially 

erroneous prices. Specifically, the 

Exchange provides a Vertical Spread 

Variance (‘‘VSV’’) price protection and a 

Calendar Spread Variance (‘‘CSV’’) price 

protection. The VSV establishes 

minimum and maximum trading price 

limits for Vertical Spreads.10 The CSV 

establishes a minimum trading price 

limit for Calendar Spreads.11 If the 

execution price of a complex order 

would be outside of the limits 

established for Vertical Spreads and 

Calendar Spreads, such complex order 

will be placed on the Strategy Book and 

will be managed to the appropriate 

trading price limit as described in Rule 

518(c)(4), Managed Interest Process for 

Complex Orders. Orders to buy below 

the minimum trading price limit and 

orders to sell above the maximum 

trading price limit (in the case of 

Vertical Spreads) will be rejected by the 

System.12

The Exchange now proposes to adopt 

new subsection (g) in Rule 518, 

Interpretations and Policies .01, to 

provide a price protection feature for 

certain stock-option strategies that have 

a single option component tied to a 

stock component with a standard 

deliverable.13 The proposed price 

protection feature, named ‘‘Parity Price 

Protection,’’ will provide price 

protection for strategies that consist of a 


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37850 Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 

14The term ‘‘call’’ means an option contract 

under which the holder of the option has the right, 

in accordance with the terms of the option, to 

purchase from the Clearing Corporation the number 

of units of the underlying security covered by the 

option contract. See Exchange Rule 100. 

15The term ‘‘put’’ means an option contract under 

which the holder of the option has the right, in 

accordance with the terms and provisions of the 

option, to sell to the Clearing Corporation the 

number of units of the underlying security covered 

by the option contract. See Exchange Rule 100. 

16The ‘‘Strategy Book’’ is the Exchange’s 

electronic book of complex orders and complex 

quotes. See Exchange Rule 518(a)(17). 

17A seller of the strategy would receive a $40.10 

net credit. 

18See Exchange Rule 518, Interpretations and 

Policies .01(b). 19See Exchange Rule 518(a)(11). 20The ‘‘Simple Order Book’’ is the Exchange’s 

regular electronic book of orders and quotes. See 

Exchange Rule 518(a)(15). 21The term ‘‘NBBO’’ means the national best bid 

or offer as calculated by the Exchange based on 

market information received by the Exchange from 

the appropriate Securities Information Processor 

(‘‘SIP’’). See Exchange Rule 518(a)(14). 22See Exchange Rule 518(a)(11). 

sale of one call 14 and the purchase of 

one hundred shares of the underlying 

stock (‘‘Buy-Write’’) and the contra side 

of the strategy, or that consist of the 

purchase of one put 15 and the purchase 

of one hundred shares of the underlying 

stock (‘‘Married-Put’’) and the contra 

side of the strategy. The Exchange will 

establish a Parity Spread Variance 

(‘‘PSV’’) value between $0.00 and $0.50. 

The PSV value will be uniform for all 

option classes traded on the Exchange 

as determined by the Exchange and 

communicated to Members via 

Regulatory Circular prior to accepting 

such orders on the Exchange. The PSV 

will be used to calculate a minimum 

option trading price limit that the 

System will prevent the option leg from 

trading below by applying the PSV 

value to the strike price of the option to 

establish a parity protected price for the 

strategy. For call option legs, the PSV 

value is added to the strike price of the 

option; for put option legs, the PSV 

value is subtracted from the strike price 

of the option. The System will then 

prevent the strategy from trading below 

its parity protected price limit to ensure 

that the strategy does not execute at a 

potentially erroneous price. 

The examples below provide an 

illustration of how the protection is 

calculated for Buy-Write and MarriedPut strategies. For the purposes of the 

following examples the PSV used in the 

calculations is $.10. 

Following is an example of the 

operation of the price protection feature 

for a Married-Put Strategy: 

Example 1 (Married-Put) 

In its simplest terms the parity price 

of a put option can be expressed as 

(Strike Price ¥ Stock Price = Put Option 

Parity Price). If, for example, the stock 

is trading at $45.00 and the Strike Price 

of the put option is $50.00, the parity 

price of the put option would then be 

$5.00 ($50.00 ¥ $45.00 = $5.00). The 

Exchange is able to leverage the parity 

relationship between the components to 

establish a minimum option trading 

price limit for Married-Put Strategies by 

simply subtracting the PSV from the 

strike price of the option. The effect on 

the option price can be seen in the 

following calculation (($50.00 ¥ $0.10) 

¥ $45.00 = $49.90 ¥ $45.00 = $4.90). 

The Exchange will calculate the parity 

protected price for a Married-Put 

Strategy by leveraging the put option 

parity formula by simply subtracting the 

PSV from the strike price of the option. 

This would result in a parity protected 

price for the strategy of $49.90 using the 

figures above. 

This allows for the stock component 

and the option component prices to 

fluctuate to achieve the strategy’s net 

price, but ensures that the strategy will 

not trade below its parity protected 

price. Married Put Strategy interest 

received to sell a price protected 

Married-Put Strategy below $49.90 will 

be placed on the Strategy Book 16 at 

$49.90. Married Put Strategy interest 

received to buy a price protected 

Married-Put Strategy below $49.90 will 

be rejected. 

Example 2 (Buy-Write) 

In its simplest terms the parity price 

of a call option can be expressed as 

(Stock Price ¥ Strike Price = Call 

Option Parity Price). If, for example, the 

stock is trading at $45.00 and the Strike 

Price of the call option is $40.00, the 

parity price of the call option would 

then be $5.00 ($45.00 ¥ $40.00 = 

$5.00). The Exchange is able to leverage 

the parity relationship between the 

components to establish a minimum 

option trading price limit for Buy-Write 

Strategies by adding the PSV to the 

strike price of the option. The effect on 

the option price can be seen in the 

following calculation ($45.00 ¥ ($40.00 

+ $.10) = $45.00 ¥ $40.10 = $4.90). The 

Exchange will calculate the parity 

protected price for a Buy-Write Strategy 

by leveraging the call option parity 

formula by simply adding the PSV to 

the strike price of the option. This 

would result in a parity protected price 

for the strategy of $40.10 net debit using 

the figures above. 

This allows for the stock component 

and the option component prices to 

fluctuate to achieve the strategy’s net 

price, but ensures that the strategy will 

not trade below its parity protected 

price. Buy-Write strategy interest 

received to sell a price protected BuyWrite Strategy below $40.10 net debit 

will be placed on the Strategy Book at 

$40.10 net debit.17 Buy-Write strategy 

interest received to buy a price 

protected Buy-Write Strategy below 

$40.10 net debit will be rejected. 

Second, the Exchange proposes to 

delete certain existing rule text from 

Exchange Rule 518, Interpretations and 

Policies .01, subsection (b), to eliminate 

an unnecessary execution price 

restriction for the stock component of a 

stock-option strategy. Exchange Rule 

518, Interpretations and Policies .01 

subsection (b), contains a paragraph that 

provides that, ‘‘[t]he execution price of 

the underlying security component 

must be also within the high-low range 

for the day in the underlying security at 

the time the stock-option order is 

processed and within a certain price 

from the current market, which the 

Exchange will establish and 

communicate to Members via 

Regulatory Circular. If the underlying 

security component price is not within 

these parameters, the stock-option order 

is not executable.’’ 18 The Exchange 

does not believe that this execution 

price restriction for the stock 

component is necessary given the 

existing price protections already in 

place on the Exchange. 

The Exchange believes that the 

execution price restriction for the stock 

component of a stock-option strategy is 

unnecessary because all complex orders 

on the Exchange, including stock-option 

orders, receive Implied Complex MIAX 

Best Bid or Offer (‘‘icMBBO’’) 

protection.19 The icMBBO is a 

calculation that uses the best price from 

the Simple Order Book for each 

component of a complex strategy 

including displayed and non-displayed 

trading interest. For stock-option orders, 

the icMBBO for a complex strategy is 

calculated using the best price (whether 

displayed or non-displayed) on the 

Simple Order Book 20 in the individual 

option component(s), and the NBBO 21

in the stock component.22 Exchange 

Rule 518(c)(2)(ii) provides, in relevant 

part, that incoming complex orders and 

quotes will not be executed at prices 

inferior to the icMBBO or at a price that 

is equal to the icMBBO when there is a 

Priority Customer Order (as defined in 

Rule 100) at the best icMBBO price. 

Further, the rule provides that complex 

orders will never be executed at a price 

that is outside of the individual 

component prices on the Simple Order 

Book, and the net price of a complex 

order executed against another complex 

order on the Strategy Book will never be 


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Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 37851 

23The term ‘‘MBBO’’ means the best bid or offer 

on the Simple Order Book on the Exchange. See 

Exchange Rule 518(a)(13). 

24 15 U.S.C. 78f(b). 

25 15 U.S.C. 78f(b)(5). 

26 15 U.S.C. 78f(b). 

27 15 U.S.C. 78f(b)(5). 

28See supra note 21. 

29See supra note 19. 

30See CBOE Rule 6.53C.06 and NASDAQ ISE 

Rule 722. 

inferior to the price that would be 

available if the complex order legged 

into the Simple Order Book. 

Accordingly, as a result of the icMBBO 

price protection feature, the execution 

price for the stock component of a stockoption order will always be inside the 

NBBO of the stock. Therefore, rule text 

stating that the execution price of the 

underlying security component must be 

within the high-low range for the day is 

unnecessary, as the icMBBO protection 

ensures that executions are always 

within the NBBO. 

Finally, the Exchange proposes to 

make a number of minor, nonsubstantive edits to Rule 518, 

Interpretations and Policies .05(e), to 

add clarity and precision to the 

Exchange’s rule text. Since the 

Exchange will be introducing the 

trading of complex strategies which 

include a ‘‘stock’’ component, the 

Exchange seeks to clarify certain aspects 

of the rule that are intended to apply 

only to the ‘‘option’’ component of a 

complex strategy. Specifically, the 

Exchange proposes to clarify the 

definition of a Wide Market Condition, 

as described in Interpretations and 

Policies .05, subsection (e)(1), so that it 

is clear that it is only applying to the 

‘‘option’’ component of a complex 

strategy. The new proposed rule text 

will provide that, ‘‘[a] ‘wide market 

condition’ is defined as any individual 

option component of a complex strategy 

having, at the time of evaluation, an 

MBBO 23 quote width that is wider than 

the permissible valid quote width as 

defined in Rule 603(b)(4).’’ By 

definition, the MBBO is comprised of 

option interest only, therefore providing 

additional detail to the existing rule 

adds clarity to the Exchange’s rules. 

Similarly, the Exchange proposes to 

clarify that Simple Market Auction or 

Timer Events (‘‘SMAT Events’’) pertain 

only to ‘‘option’’ components of a 

complex strategy, by amending 

Interpretations and Policies .05, 

subsection (e)(2)(i) and (e)(2)(ii), to 

include the term ‘‘option component’’ in 

the first sentence of each section. By 

definition, the Exchange’s Simple 

Market is comprised of option interest 

only, on the Simple Order Book, 

therefore providing additional detail to 

the existing rule adds clarity to the 

Exchange’s rules. 

2. Statutory Basis 

The Exchange believes that its 

proposed rule change is consistent with 

Section 6(b) of the Act 24 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act 25 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. 

The Exchange believes establishing a 

parity price protection for certain BuyWrite and Married-Put strategies 

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 by 

ensuring that strategies are not executed 

at potentially erroneous prices. 

Given the relationship that the stock 

price, strike price, and option price have 

to each other, the Exchange is able to 

calculate a minimum option trading 

price limit for the option leg of certain 

stock-option strategies with a call or a 

put component. Specifically, the parity 

price of a call option can be derived by 

subtracting the strike price from the 

stock price (Stock Price ¥ Strike Price 

= Call Option Parity Price); and the 

parity price of a put option can be 

derived by subtracting the stock price 

from the strike price (Strike Price ¥ 

Stock Price = Put Option Parity Price). 

Using these relationships the PSV may 

be applied to establish a minimum 

option trading price limit that the 

System will prevent the option leg from 

trading below to establish a parity 

protected price for the strategy to ensure 

the strategy does not trade below its 

parity protected price at a potentially 

erroneous price. 

The Exchange believes that Members 

will benefit from the proposed risk 

protection measure as the protection 

ensures that these stock-option 

strategies are not executed below their 

parity protected price as calculated by 

the Exchange. Consequently, the 

proposed risk protection is designed to 

encourage Members to submit 

additional order flow and liquidity to 

the Exchange in these strategies, thereby 

removing impediments to and 

perfecting the mechanisms of a free and 

open market and a national market 

system and, in general, protecting 

investors and the public interest. This 

protection should provide Members 

with confidence that protections are in 

place on the Exchange to reduce the risk 

of these strategies being executed at 

potentially erroneous prices. As a result, 

the Exchange believes that the proposed 

price protection feature will promote 

just and equitable principles of trade. 

Additionally the Exchange’s proposal 

to remove unnecessary rule text from its 

current rule which requires that the 

execution price of the underlying 

security component be within the highlow range for the day in the underlying 

security at the time the stock-option 

order is processed is consistent with 

Section 6(b) of the Act 26 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act 27 in particular. The Exchange 

believes that its existing icMBBO price 

protection feature will sufficiently guard 

against potentially erroneous 

transaction prices for complex strategies 

which include an underlying stock 

component. The icMBBO for a complex 

strategy involving a stock component is 

calculated using the best price on the 

Simple Order Book in the individual 

option component(s) and the NBBO in 

the stock component.28 Every complex 

order entered on the Exchange receives 

the icMBBO price protection 29 and as a 

result, the execution price for the stock 

component of a stock-option order will 

always be inside the NBBO of the stock. 

Removal of the unnecessary rule text 

will protect investors and the public 

interest by providing clarity and 

precision in the Exchange’s rules. 

Further, the Exchange notes that other 

exchanges that offer stock-option orders 

do not have this provision in their 

rules.30

Finally, the Exchange proposes to 

make minor non-substantive changes to 

its rule to clarify that Wide Market 

Conditions and Simple Market Auction 

or Timer Events on the Exchange are 

related to the ‘‘option’’ components only 

for complex strategies. The Exchange 

believes the proposed changes promote 

just and equitable principles of trade, 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

they seek to add clarity and precision to 

the Exchange’s rules. The Exchange 

believes that the proposed rule changes 

will provide greater clarity to Members 

and the public regarding the Exchange’s 

Rules, and it is in the public interest for 

rules to be accurate and concise so as to 

eliminate the potential for confusion. 


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31 Id. 

32 15 U.S.C. 78s(b)(3)(A). 

33 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. 

34 17 CFR 240.19b–4(f)(6). 

35 17 CFR 240.19b–4(f)(6)(iii). 

36For 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). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes the proposed rule 

change will foster competition as it 

provides a risk protection mechanism 

for certain complex strategies entered on 

the Exchange and may promote 

competition by enabling Members to 

trade more aggressively on the Exchange 

knowing that these strategies will not be 

executed below [sic] parity protected 

price at potentially erroneous prices. 

Accordingly, the price protection 

feature should instill additional 

confidence in Members that submit 

certain stock-option orders to the 

Exchange that their orders receive price 

protection, and thus should encourage 

Members to submit additional order 

flow and liquidity to the Exchange, 

thereby removing impediments to and 

perfecting the mechanisms of a free and 

open market and a national market 

system and, in general, protecting 

investors and the public interest. 

The removal of unnecessary rule text 

pertaining to the execution price of the 

stock component of a stock-option order 

does not impose any burden on 

competition as the proposed change will 

align the Exchange’s rule with that of 

other exchanges.31 Further, the 

additional proposed changes remedy 

minor non-substantive issues in the text 

of various rules identified in this 

proposal. 

The Exchange does not believe the 

proposed rule change will impose any 

burden on intra-market competition as 

price protection is available to all 

market participants that submit orders 

in certain stock-option strategies. The 

Exchange further believes that the 

proposed price protection should 

promote inter-market competition, and 

result in more competitive order flow to 

the Exchange by protecting market 

participants from potentially erroneous 

executions occurring at prices below the 

parity protected price of the strategy, as 

calculated by the Exchange. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act, and believes 

the proposed change will enhance 

competition. 

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 32 and Rule 19b–4(f)(6) 33

thereunder. 

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 34 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 35

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 is 

consistent with the protection of 

investors and the public interest 

because it will enable market 

participants to benefit from the 

proposed parity price protection feature, 

which is designed to safeguard against 

the possibility of executions occurring 

at potentially erroneous prices. MIAX 

also states that the proposal protects 

investors and the public interest by 

deleting a provision requiring the 

execution price of the underlying 

security component of a stock-option 

order to be within the underlying 

component’s high-low range for the day. 

MIAX notes that this provision is 

unnecessary because all complex orders 

on MIAX are protected by the icMBBO 

price protection feature, which assures 

that the stock leg of a stock-option order 

will not be executed at a price that is 

inferior to the NBBO for the stock. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because the proposed 

parity price protection feature is 

designed to prevent Buy-Write and 

Married Put strategies from executing at 

potentially erroneous prices. As noted 

above, Buy-Write and Married Put 

interest to buy that is priced below the 

parity protected price for the strategy 

will be rejected, and Buy-Write and 

Married Put interest to sell that is priced 

below the parity protected price will be 

placed on the Strategy Book at the parity 

protected price for the strategy. 

Therefore, the Commission hereby 

waives the operative delay and 

designates the proposed rule change as 

operative upon filing.36

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–2018–16 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–2018–16. 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 


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 149 / Thursday, August 2, 2018 / Notices 37853 

37 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5See Miami International Securities Exchange 

LLC (‘‘MIAX’’) Fee Schedule. MIAX charges its 

Members and non-Members a monthly fee of $1,100 

for each 1 Gigabit connection and $5,500 for each 

10 Gigabit connection to MIAX’s Primary/ 

Secondary Facility. The Exchange notes a minor 

difference between MIAX’s connectivity fees and 

BOX’s proposal. MIAX prorates their connectivity 

fees when a Member makes a change to their 

connectivity (by adding or deleting connections). 

BOX notes that, like the Exchange’s Port Fees and 

HSVF Fees, Participants or non-Participants 

connected as of the last trading day of each calendar 

month will be charged the applicable Connectivity 

Fee for that month. 

6The Exchange notes that with the proposed 

change discussed herein, Participants and nonParticipants credentialed to use the HSVF Port who 

also have physical connections to the BOX system 

will be charged for both the HSVF monthly fee and 

the applicable amount for their physical 

connections to BOX. For example, if nonParticipant X is credentialed to use the HSVF Port 

and has three (3) physical non-10Gb connections to 

BOX, non-Participant X will be charged $1,500 for 

the monthly HSVF Port Fee and $3,000 for the three 

non-10Gb physical connections to BOX. 

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–2018–16 and should 

be submitted on or before August 23, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.37

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–16528 Filed 8–1–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83728; File No. SR–BOX– 

2018–24] 

Self-Regulatory Organizations; BOX 

Options Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

the Fee Schedule on the BOX Market 

LLC (‘‘BOX’’) Options Facility To 

Establish BOX Connectivity Fees for 

Participants and Non-Participants Who 

Connect to the BOX Network 

July 27, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 19, 

2018, BOX Options Exchange LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Exchange filed the proposed rule change 

pursuant to Section 19(b)(3)(A)(ii) of the 

Act,3 and Rule 19b–4(f)(2) thereunder,4

which renders the proposal effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the Fee Schedule on the BOX 

Market LLC (‘‘BOX’’) options facility. 

The text of the proposed rule change is 

available from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s internet website at http://

boxexchange.com. 

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 

Section VI. (Technology Fees) of the 

BOX Fee Schedule to establish BOX 

Connectivity Fees for Participants and 

non-Participants who connect to the 

BOX network. Connectivity fees will be 

based upon the amount of bandwidth 

that will be used by the Participant or 

non-Participant. Further, BOX 

Participants or non-Participants 

connected as of the last trading day of 

each calendar month will be charged the 

applicable Connectivity Fee for that 

month. The Connectivity Fees will be as 

follows: 

Connection type Monthly fees 

Non-10 Gb Connection.$1,000 per connection. 

10 Gb Connection ..... 5,000 per connection. 

The Exchange also proposes to amend 

certain language and numbering in 

Section VI.A to reflect the changes 

discussed above. Specifically, BOX 

proposes to add the title ‘‘Third Party 

Connectivity Fees’’ under Section VI.A. 

Further, the Exchange proposes to add 

Section VI.A.2 which details the 

proposed BOX Connectivity Fees 

discussed above. 

Participants and non-Participants 

with ten (10) Gigabit Connections will 

be charged a monthly fee of $5,000 per 

connection. Participants and nonParticipants with non-10 Gigabits 

Connections will be charged a monthly 

fee of $1,000 per connection. The 

Exchange notes that another exchange 

in the industry has similar connectivity 

fees.5 The Exchange also notes that 

certain fees will continue to be assessed 

by the datacenters and will be billed 

directly to the market participant. 

Next, the Exchange is amending 

Section VI.C. High Speed Vendor Feed 

(‘‘HSVF’’) of the Fee Schedule. 

Specifically, BOX is proposing to delete 

Section VI.C. and reclassify the HSVF 

Connection as a Port Fee. The Exchange 

believes this reclassification is more 

accurate, as HSVF subscription is not 

dependent on a physical connection to 

the Exchange. Instead, subscribers must 

be credentialed by BOX to receive the 

HSVF. The HSVF Fee will remain 

unchanged, BOX will assess a HSVF 

Port Fee of $1,500 per month 6 for each 

month a Participant or non-Participant 

is credentialed to use the HSVF Port. 

The Exchange notes that another 


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