41126 Federal Register / Vol. 83, No. 160 / Friday, August 17, 2018 / Notices 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Member’’ means an individual or 

organization that is registered with the Exchange 

pursuant to Chapter II of MIAX PEARL Rules for 

purposes of trading on the Exchange as an 

‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’ 

Members are deemed ‘‘members’’ under the 

Exchange Act. See Exchange Rule 100. 

4The term ‘‘MPID’’ means unique market 

participant identifier. See Exchange Rule 100. 

5The term ‘‘Market Maker’’ or ‘‘MM’’ means a 

Member registered with the Exchange for the 

purpose of making markets in options contracts 

traded on the Exchange and that is vested with the 

rights and responsibilities specified in Chapter VI 

of the MIAX PEARL Rules. See Exchange Rule 100. 

6The term ‘‘MEO Interface’’ means a binary order 

interface used for submitting certain order types (as 

set forth in Rule 516) to the MIAX PEARL System. 

See Exchange Rule 100. 

7The term ‘‘FIX Interface’’ means the Financial 

Information Exchange interface used for submitting 

certain order types (as set forth in Rule 516) to the 

MIAX PEARL System. See Exchange Rule 100. 

8See Exchange Rule 514(c)(1). 

9The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

10The term ‘‘Electronic Exchange Member’’ or 

‘‘EEM’’ means the holder of a Trading Permit who 

is a Member representing as agent Public Customer 

Orders or Non-Customer Orders on the Exchange 

and those non-Market Maker Members conducting 

proprietary trading. Electronic Exchange Members 

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

See Exchange Rule 100. 

11The Exchange notes that if requested by an 

EEM, orders entered by an EEM via the MEO 

Interface using the same MPID will not be executed 

against orders entered on the opposite side of the 

market by the same EEM using the same MPID via 

the MEO Interface. In such a case, the System will 

cancel the oldest of the orders back to the entering 

party prior to execution. See Exchange Rule 

514(c)(2). 

12See Nasdaq Stock Market Rule, Chapter VI, Sec. 

18(c)(1). 

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–ISE–2018–66 and should be 

submitted on or before September 7, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–17738 Filed 8–16–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83835; File No. SR– 

PEARL–2018–15] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to the Exchange Rule 514 

Priority on the Exchange 

August 13, 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 August 1, 2018, MIAX PEARL, LLC 

(‘‘MIAX PEARL’’ or ‘‘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. 

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 514, Priority on 

the Exchange. 

The text of the proposed rule change 

is available on the Exchange’s website at 

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

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 514, Priority on the 

Exchange. Specifically, the Exchange 

proposes to amend subsection (c), SelfTrade Protection, to broaden the 

protection afforded under the current 

rule by giving Members 3 the option to 

have this protection apply at the market 

participant identifier (‘‘MPID’’) 4 level 

(i.e., currently existing functionality), or 

at the firm level. The Exchange believes 

that this enhancement will provide 

helpful flexibility for market making 

firms that wish to prevent trading 

against all orders entered by their firm 

under any MPID, instead of just those 

entered under the same MPID. 

Currently, the rule prevents orders 

entered by a Market Maker 5 via the 

MEO Interface 6 or the FIX Interface 7

using the same MPID from executing 

against orders entered on the opposite 

side of the market by the same Market 

Maker using the same MPID via the 

MEO Interface or the FIX Interface.8 In 

such a case, the System 9 will cancel the 

oldest of the orders back to the entering 

party prior to execution. 

Members of the Exchange may either 

be Market Makers or Electronic 

Exchange Members.10 Each Market 

Maker and Electronic Exchange Member 

is assigned an MPID by the Exchange for 

identification purposes. A Member may 

have multiple Market Maker MPIDs on 

the Exchange, therefore the possibility 

exists that a Member may cross its own 

Market Maker’s orders.11

The Exchange now proposes to allow 

members to choose to have this 

protection applied at either the MPID 

level, as currently implemented, or at 

the member firm level. If members 

choose to have this protection applied at 

the member firm level, the System will 

prohibit orders entered from different 

MPIDs within the Member’s firm from 

trading against one another. The 

Exchange believes that the proposed 

enhancement will provide Members 

with more tailored self-trade 

functionality that will allow Members to 

manage their trading as appropriate 

based on the Member’s business needs. 

While the Exchange believes that some 

firms will want to restrict trading 

interest from the same MPID, (as 

currently implemented), the Exchange 

believes that other firms will find it 

helpful to apply self-trade protection 

across all MPIDs of the same firm. 

The Exchange note that similar 

functionality also exists on the Nasdaq 

Stock Market (‘‘NASDAQ’’) which 

prevents self-trades by MPID, or 

alternatively, if selected by the member, 

self-trade protection for all MPIDs of the 

firm.12 Cboe BZX Exchange 

(‘‘CboeBZX’’) also has a similar rule in 

place which provides members the 

ability to apply Match Trade Prevention 

(‘‘MTP’’) modifiers (CboeBZX’s version 


amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 83, No. 160 / Friday, August 17, 2018 / Notices 41127 

13See Cboe BZX Exchange Rule 11.9(f). 

14 15 U.S.C. 78f(b). 

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

16See supra note 12 and 13. 

17 15 U.S.C. 78s(b)(3)(A). 

18 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. 

of self-trade protection) based on MPID, 

Exchange Member, trading group, or 

Exchange Sponsored Participant 

identifiers.13

The Exchange will announce the 

implementation date of this 

functionality via a Regulatory Circular 

prior to the functionality being available 

on the Exchange. 

2. Statutory Basis 

MIAX PEARL believes that its 

proposed rule changes are consistent 

with Section 6(b) of the Act 14 in 

general, and furthers the objectives of 

Section 6(b)(5) of the Act 15 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 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 by 

providing Market Makers with 

additional flexibility to configure selftrade protections offered by the 

Exchange. Currently, all Market Makers 

are provided functionality that prevents 

orders entered by a Market Maker via 

the MEO Interface or the FIX Interface 

using the same MPID from executing 

against orders entered on the opposite 

side of the market by the same Market 

Maker using the same MPID via the 

MEO Interface or the FIX Interface. 

While this functionality is helpful, some 

members would prefer not to trade with 

orders entered under different MPIDs of 

the same firm. Therefore, the Exchange 

is proposing to provide Exchange 

Members flexibility with respect to how 

self-trade protections are implemented. 

Members may continue to use the 

current functionality, while members 

who prefer to prevent self-trades across 

different MPIDs within the same firm 

will now be provided with functionality 

that allows them to do so. 

Similar functionality exists on the 

Nasdaq Stock Market and CboeBZX 16

and the Exchange believes that the 

flexibility to apply self-trade protection 

at either the MPID or firm level would 

be useful to Members of MIAX PEARL. 

The Exchange also believes that the 

proposed rule change is designed to 

promote just and equitable principles of 

trade and will remove impediments to 

and perfect the mechanisms of a free 

and open market as it will enhance selftrade protections provided to MIAX 

PEARL Market Makers similar to those 

protections provided on other markets. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

MIAX PEARL does not believe that 

the proposed rule change will impose 

any burden on intermarket or 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change is designed to 

enhance the Exchange’s current selftrade protection, and will benefit 

members that wish to protect their 

orders from trading with orders from 

other Market Makers within the same 

firm, rather than the more limited MPID 

standard currently in use. The new 

functionality, which is similar to 

functionality already provided on 

CboeBZX, is also completely voluntary, 

and members that wish to use the 

current functionality may continue to 

do so. The Exchange does not believe 

that providing more flexibility to 

members will have any significant 

impact on competition. Conversely, the 

Exchange believes that the proposed 

rule change will foster competition as 

Market Makers may send more orders to 

the Exchange knowing that there is no 

chance that they will trade with their 

own orders on the other side of the 

market. This could result in more order 

flow and more liquidity on the 

Exchange. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intra-market competition 

as self-trade protection is available to all 

Market Makers on the Exchange. 

Further, the Exchange does not believe 

that the proposed rule change will 

impose any burden on inter-market 

competition, and rather could 

potentially promote inter-market 

competition and result in more 

competitive order flow to the Exchange 

by more widely preventing Market 

Makers from trading with their own 

orders. 

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 17 and Rule 19b–4(f)(6) 18

thereunder. 

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– 

PEARL–2018–15 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–PEARL–2018–15. 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 


amozie on DSK3GDR082PROD with NOTICES1
41128 Federal Register / Vol. 83, No. 160 / Friday, August 17, 2018 / Notices 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 68303 

(November 27, 2012), 77 FR 71652 (December 3, 

2012) (‘‘RPI Approval Order’’) (SR–BYX–2012–019). 

4The Exchange will periodically notify the 

membership regarding the securities included in 

the Program through an information circular. 

5A ‘‘User’’ is defined in Rule 1.5(cc) as any 

member or sponsored participant of the Exchange 

who is authorized to obtain access to the System. 

6A ‘‘Retail Order’’ is defined in Rule 11.24(a)(2) 

as an agency order that originates from a natural 

person and is submitted to the Exchange by a RMO, 

provided that no change is made to the terms of the 

order with respect to price or side of market and 

the order does not originate from a trading 

algorithm or any computerized methodology. See 

Rule 11.24(a)(2). 

7The term Protected Quotation is defined in BYX 

Rule 1.5(t) and has the same meaning as is set forth 

in Regulation NMS Rule 600(b)(58). The terms 

Protected NBB and Protected NBO are defined in 

BYX Rule 1.5(s). The Protected NBB is the bestpriced protected bid and the Protected NBO is the 

best-priced protected offer. Generally, the Protected 

NBB and Protected NBO and the national best bid 

(‘‘NBB’’) and national best offer (‘‘NBO’’, together 

with the NBB, the ‘‘NBBO’’) will be the same. 

However, a market center is not required to route 

to the NBB or NBO if that market center is subject 

to an exception under Regulation NMS Rule 

611(b)(1) or if such NBB or NBO is otherwise not 

available for an automatic execution. In such case, 

the Protected NBB or Protected NBO would be the 

best-priced protected bid or offer to which a market 

center must route interest pursuant to Regulation 

NMS Rule 611. 

8See RPI Approval Order, supra note 3 at 71652. 

9 Id. 

10See Securities Exchange Act Release Nos. 

71249 (January 7, 2014), 79 FR 2229 (January 13, 

2014) (SR–BYX–2014–001); 74111 (January 22, 

2015), 80 FR 4598 (January 28, 2015) (SR–BYX– 

2015–05); 76965 (January 22, 2016), 81 FR 4682 

(January 27, 2016) (SR–BYX–2016–01); 78180 (June 

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–PEARL–2018–15 and 

should be submitted on or before 

September 7, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–17740 Filed 8–16–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83831; File No. SR– 

CboeBYX–2018–014] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Notice of Filing of 

a Proposed Rule Change To Make 

Permanent Rule 11.24, Which Sets 

Forth the Exchange’s Pilot Retail Price 

Improvement Program 

August 13, 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 30, 

2018, Cboe BYX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) 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 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 filed a proposal to 

make permanent Rule 11.24, which sets 

forth the Exchange’s pilot Retail Price 

Improvement Program. 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, 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 parts of such 

statements. 

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend Rule 11.24 to make 

permanent the Retail Price Improvement 

Program (the ‘‘Program’’), which is 

currently offered on a pilot basis. The 

Exchange has operated the pilot for a six 

year period and believes that it has been 

successful in its stated goal of providing 

price improvement opportunities to 

retail investors. The analysis conducted 

by the Exchange shows that retail 

investors have been provided a total of 

$4.5 million of price improvement 

during the 2.5 year period reviewed 

from January 2016 through June 2018. In 

addition, the Exchange’s analysis shows 

that the Program has provided these 

benefits to retail investors without 

having an adverse impact on the broader 

market. The proposal provides an 

analysis of the economic benefits to 

retail investors and the marketplace 

flowing from operation of the Program, 

which the Exchange believes supports 

making the Program permanent. 

Background 

In November 2012, the Commission 

approved the Program on a pilot basis.3

The Program is designed to attract retail 

order flow to the Exchange, and allow 

such order flow to receive potential 

price improvement. The Program is 

currently limited to trades occurring at 

prices equal to or greater than $1.00 per 

share.4 Under the Program, a class of 

market participant called a Retail 

Member Organization (‘‘RMO’’) is 

eligible to submit certain retail order 

flow (‘‘Retail Orders’’) to the Exchange. 

Users 5 are permitted to provide 

potential price improvement for Retail 

Orders 6 in the form of non-displayed 

interest that is better than the national 

best bid that is a Protected Quotation 

(‘‘Protected NBB’’) or the national best 

offer that is a Protected Quotation 

(‘‘Protected NBO’’, and together with the 

Protected NBB, the ‘‘Protected NBBO’’).7

The Program was approved by the 

Commission on a pilot basis running 

one-year from the date of 

implementation.8 The Commission 

approved the Program on November 27, 

2012.9 The Exchange implemented the 

Program on January 11, 2013, and has 

extended the pilot period five times.10


amozie on DSK3GDR082PROD with NOTICES1