10194 Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(6)(iii). As required under 

Rule 19b–4(f)(6)(iii), the Exchange provided the 

Commission with written notice of its intent to file 

the proposed rule change, along with a brief 

description and the text of 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. 

8For 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). 9 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. 72492 

(June 27, 2014), 79 FR 38099 (SR–MIAX–2014–30) 

(‘‘iShares ETFs Proposal’’). 

4See Securities Exchange Act Release No. 72835, 

79 FR 49140 (August 19, 2014). 

5See Securities Exchange Act Release No. 73211, 

79 FR 59338 (October 1, 2014). 

6See Letter to Elizabeth M. Murphy, Secretary, 

Commission, from Brian O’Neill, Vice President 

and Senior Counsel, MIAX, dated October 22, 2014 

(providing comment on SR–MIAX–2014–30 and 

SR–MIAX–2014–39) (‘‘MIAX Letter’’). 

7See Securities Exchange Act Release No. 73856, 

79 FR 77075 (December 23, 2014). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the proposed rule change 

does not (i) significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 6 and Rule 19b–4(f)(6)(iii) 

thereunder.7

The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest, as it 

will allow the obvious error pilot 

program to continue uninterrupted 

while the industry gains further 

experience operating under the Plan to 

Address Extraordinary Market 

Volatility, and avoid any investor 

confusion that could result from a 

temporary interruption in the pilot 

program. For this reason, the 

Commission designates the proposed 

rule change to be operative upon filing.8

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– 

CBOE–2015–18 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–CBOE–2015–18. 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 Web site (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 Web site 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 such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–CBOE– 

2015–18, and should be submitted on or 

before March 18, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03820 Filed 2–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74304; File Nos. SR–MIAX– 

2014–30 and SR–MIAX–2014–39] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Order Disapproving Proposed Rule 

Changes To List and Trade Options on 

Shares of the iShares ETFs and Market 

Vectors ETFs 

February 19, 2015. 

I. Introduction 

On June 17, 2014, Miami International 

Securities Exchange LLC (‘‘MIAX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to list and trade options on 

shares of the iShares MSCI Brazil 

Capped ETF, iShares MSCI Chile 

Capped ETF, iShares MSCI Peru Capped 

ETF, and iShares MSCI Spain Capped 

ETF (collectively ‘‘iShares ETFs’’). The 

proposed rule change was published for 

comment in the Federal Register on July 

3, 2014.3 On August 13, 2014, the 

Commission extended the time period 

in which to either approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to approve or 

disapprove the proposed rule change, to 

October 1, 2014.4 On September 25, 

2014, the Commission instituted 

proceedings to determine whether to 

approve or disapprove the proposed 

rule change.5 The Commission received 

a letter from MIAX on the proposal.6 On 

December 17, 2014, the Commission 

issued a notice of designation of a 

longer period for Commission action on 

proceedings to determine whether to 

approve or disapprove the proposed 

rule change.7

In addition, on July 28, 2014, the 

Exchange filed with the Commission a 

proposed rule change to list and trade 

options on shares of the Market Vectors 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 10195 

8See Securities Exchange Act Release No. 72777 

(August 6, 2014), 79 FR 47165 (SR–MIAX–2014–39) 

(‘‘Market Vectors ETFs Proposal’’). 9See Securities Exchange Act Release No. 73212, 

79 FR 59332 (October 1, 2014). 

10See MIAX Letter, supra note 6. 

11See Securities Exchange Act Release No. 74150, 

80 FR 5597 (February 2, 2015). 

12See iShares ETFs Proposal, supra note 3. 

Morgan Stanley Capital International Inc. (‘‘MSCI’’) 

created and maintains the Brazil Index, Chile Index, 

Peru Index, and Spain Index. 

13See Market Vectors ETFs Proposal, supra note 

8. Market Vectors Index Solutions created and 

maintains the Brazil Small-Cap Index, Indonesia 

Index, Poland Index, and Russia Index. 

14MIAX Rule 402(i) provides the listing standards 

for options on shares or other securities 

(‘‘Exchange-Traded Fund Shares’’) that are traded 

on a national securities exchange and are defined 

as an ‘‘NMS stock’’ under Rule 600 of Regulation 

NMS. If an option on Exchange-Traded Fund Shares 

meets these listing standards, it can be listed 

without the filing of a proposed rule change with 

the Commission, but the Exchange must comply 

with the requirements of Rule 19b–4(e). See 17 CFR 

240.19b–4(e). 

15See MIAX Rule 402(i)(5)(ii)(B). The Exchange 

represents that each of the iShares ETFs and Market 

Vectors ETFs are comprised of component 

securities for which the primary market is a single 

foreign market, and that, for each ETF, MIAX does 

not have a CSSA with its foreign counterpart in the 

applicable foreign market. 

16See supra note 14. 

17See iShares ETFs Proposal, supra note 3, and 

Market Vectors ETFs Proposal, supra note 8 (citing 

to Memorandum of Understanding with the CVM 

dated as of July 24, 2012). 

18See iShares ETFs Proposal, supra note 3 (citing 

to Memorandum of Understanding with the SVS 

dated as of June 3, 1993). 

19See iShares ETFs Proposal, supra note 3 (citing 

to Memorandum of Understanding with the CNMV 

dated as of July 22, 2013). 

20See Market Vectors ETFs Proposal, supra note 

8 (citing to the Memorandum of Understanding 

with the FCSCM dated December 6, 1995). 

21See iShares ETFs Proposal, supra note 3, and 

Market Vectors ETFs Proposal, supra note 8. 

22The following agreements were at issue in the 

orders cited by MIAX: Memorandum of 

Understanding with the CVM, see Securities 

Exchange Act Release No. 40298 (August 3, 1998), 

63 FR 43435 (August 13, 1998) (SR–Amex–98–28; 

SR–CBOE–98–32; and SR–Phlx–98–33) (citing a 

separate agreement with the CVM than the 

agreement relied upon by MIAX in the iShares ETFs 

and Market Vectors ETFs Proposals); and 

Memorandum of Understanding with the Mexican 

Continued 

Brazil Small-Cap ETF, Market Vectors 

Indonesia Index ETF, Market Vectors 

Poland ETF, and Market Vectors Russia 

ETF (collectively ‘‘Market Vectors 

ETFs’’). The proposed rule change was 

published for comment in the Federal 

Register on August 12, 2014.8 On 

September 25, 2014, the Commission 

instituted proceedings to determine 

whether to approve or disapprove the 

proposed rule change.9 The Commission 

received a letter from MIAX on the 

proposal.10 On January 27, 2015, the 

Commission issued a notice of 

designation of a longer period for 

Commission action on proceedings to 

determine whether to approve or 

disapprove the proposed rule change.11

This order disapproves the iShares ETFs 

Proposal and the Market Vectors ETFs 

Proposal. 

II. Description of the Proposal 

The Exchange proposes to list for 

trading on the Exchange options on 

shares of the iShares and Market Vectors 

ETFs. According to the Exchange, the 

iShares ETFs are registered pursuant to 

the Investment Company Act of 1940 as 

management investment companies 

designed to hold a portfolio of securities 

that track the MSCI Brazil 25/50 Index 

(‘‘Brazil Index’’), which consists of 

stocks traded primarily on 

BM&FBOVESPA; MSCI Chile Investable 

Market Index (IMI) 25/50 (‘‘Chile 

Index’’), which consists of stocks traded 

primarily on the Santiago Stock 

Exchange; MSCI All Peru Capped Index 

(‘‘Peru Index’’), which consists of stocks 

traded primarily on Bolsa de Valores de 

Lima; and MSCI Spain 25/50 Index 

(‘‘Spain Index’’), which consists of 

stocks traded primarily on Bolsa de 

Madrid.12

Similarly, according to the Exchange, 

the Market Vectors ETFs are registered 

pursuant to the Investment Company 

Act of 1940 as management investment 

companies designed to hold a portfolio 

of securities that track the Market 

Vectors Brazil Small-Cap Index (‘‘Brazil 

Small-Cap Index’’), which consists of 

stocks traded primarily on 

BM&FBOVESPA; the Market Vectors 

Indonesia Index (‘‘Indonesia Index’’), 

which consists of stocks traded 

primarily on the Indonesia Stock 

Exchange; the Market Vectors Poland 

Index (‘‘Poland Index’’), which consists 

of stocks traded primarily on the 

Warsaw Stock Exchange; and the Market 

Vectors Russia Index (‘‘Russia Index’’), 

which consists of stocks traded 

primarily on the Moscow Exchange.13

MIAX Rule 402 establishes the 

Exchange’s initial listing standards for 

equity options (the ‘‘Listing Standards’’) 

pursuant to which the Exchange can list 

and trade options on the shares of openend investment companies, such as the 

iShares ETFs and Market Vectors 

ETFs.14 According to the Exchange, 

options on the iShares ETFs and Market 

Vectors ETFs do not meet the Listing 

Standards. In particular, options on the 

iShares ETFs and Market Vectors ETFs 

do not meet the requirement that the 

component securities of an index or 

portfolio of securities on which the 

Exchange Traded Fund Shares are 

based, for which the primary market is 

in any one country that is not subject to 

a comprehensive surveillance sharing 

agreement (‘‘CSSA’’), not represent 20% 

or more of the weight of the index.15

Accordingly, the Exchange may not list 

and trade options on the iShares ETFs 

or Market Vectors ETFs without a 

separate proposed rule change filed 

with and approved by the 

Commission.16

According to the Exchange, it has 

attempted, but not entered into, CSSAs 

with the applicable foreign markets. In 

its proposals, the Exchange requested 

that the Commission allow it to rely on 

agreements between the Commission 

and the applicable foreign regulators, in 

place of the requirement to have a 

CSSA, with respect to the listing and 

trading of options on shares of the 

iShares ETFs and Market Vectors ETFs. 

Specifically, the Exchange cited to the 

agreements between the Commission 

and the Comissao de Valores 

Mobiliarios (‘‘CVM’’),17 which has 

responsibility for the Brazilian 

exchanges and over-the-counter 

markets; the Superintendencia de 

Valores y Seguros de Chile (‘‘SVS’’),18

which has the responsibility for the 

Chilean securities markets; the 

Comision Nacional del Mercado de 

Valores (‘‘CNMV’’),19 which has the 

responsibility for the Spanish stock 

exchanges; and the Federal Commission 

on Securities and the Capital Market of 

the Government of the Russian 

Federation (‘‘FCSCM’’), a forerunner of 

the Federal Commission on Securities 

Market of Russia, which has 

responsibility for the Russian stock 

exchanges.20 In addition, the Exchange 

noted that the Indonesia Financial 

Services Authority, which has 

responsibility for the Indonesian stock 

exchanges; the Polish Financial 

Supervision Authority, which has 

responsibility for the Polish stock 

exchanges; the Superintendencia del 

Mercado de Valores, which has 

responsibility for the Peruvian stock 

exchanges, and the Commission are 

signatories to the International 

Organization of Securities Commissions 

Multilateral Memorandum of 

Understanding.21

In its letter, MIAX stated its belief that 

the proposals were consistent with the 

requirements of the Act and that the 

Commission should approve the filings. 

In addition, MIAX believes that its 

proposals are consistent with the 

approach previously allowed by the 

Commission. Specifically, MIAX noted 

that the Commission has, in the past, 

allowed exchanges to rely on 

agreements between the Commission 

and foreign regulators in lieu of a CSSA 

between an exchange and the applicable 

foreign market.22 The Exchange believes 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
10196 Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 

National Commission for Banking and Securities 

dated as of October 18, 1990, see Securities 

Exchange Act Release Nos. 53824 (May 17, 2006), 

71 FR 30003 (May 24, 2006) (SR–Amex–2006–43), 

56324 (August 27, 2007), 72 FR 50426 (August 31, 

2007) (SR–ISE–2007–72), 56778 (November 9, 

2007), 72 FR 65113 (November 19, 2007) (SR– 

Amex–2007–100), 57013 (December 20, 2007), 72 

FR 73923 (December 28, 2007) (SR–CBOE–2007– 

140), and 57014 (December 20, 2007), 72 FR 73934 

(December 28, 2007) (SR–ISE–2007–111). See MIAX 

Letter, supra note 6, at 3 nn.7–9 and accompanying 

text. The Commission notes that these agreements 

are not at issue in the present proposed rule 

changes. MIAX also noted that it had previously 

filed another proposed rule change that was 

immediately effective using a similar approach to 

list options on shares of the iShares MSCI Mexico 

Index Fund. See Securities Exchange Act Release 

No. 72213 (May 21, 2014), 79 FR 30669 (May 28, 

2014) (SR–MIAX–2014–19). In that instance, the 

Exchange relied on an agreement between The 

National Commission for Banking and Securities 

and the Commission dated as of October 18, 1990. 

The Commission notes that the Commission had 

previously determined that this agreement could be 

used for surveillance purposes. See Securities 

Exchange Act Release No. 36415 (October 25, 1995), 

60 FR 55620 (November 1, 1995) (SR–CBOE–95– 

45). 23See MIAX Letter, supra note 6 at 4. 

24See 15 U.S.C. 78s(b)(2)(C)(i). 

25See 15 U.S.C. 78s(b)(2)(C)(ii); see also 17 CFR 

201.700(b)(3) (‘‘The burden to demonstrate that a 

proposed rule change is consistent with the 

Exchange Act and the rules and regulations issued 

thereunder . . . is on the self-regulatory 

organization that proposed the rule change. . . . A 

mere assertion that the proposed rule change is 

consistent with those requirements . . . is not 

sufficient.’’). The description of a proposed rule 

change, its purpose and operation, its effect, and a 

legal analysis of its consistency with applicable 

requirements must all be sufficiently detailed and 

specific to support an affirmative Commission 

finding. See 17 CFR 201.700(b)(3). Any failure of a 

SRO to provide the information elicited by Form 

19b–4 may result in the Commission not having a 

sufficient basis to make an affirmative finding that 

a proposed rule change is consistent with the 

Exchange Act and the rules and regulations issued 

thereunder that are applicable to the SRO. Id. 

26 In disapproving the proposed rule changes, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

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

28See Securities Exchange Act Release No. 40761 

(December 8, 1998), 63 FR 70952, 70959 n.101 

(December 22, 1998). 

29The Commission also notes that the particular 

agreements referenced in MIAX’s letter, which the 

Commission has previously allowed exchanges to 

rely on in lieu of a CSSA between an exchange and 

the applicable foreign market, are not at issue in the 

present proposed rule changes. See supra note 22. 

30See iShares ETFs Proposal, supra note 3, and 

Market Vectors ETFs Proposal, supra note 8. 

31 Id. 

32 17 CFR 201.700(b)(3). 

33 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

the proposed rule changes are consistent 

with Section 6 of the Act ‘‘by avoiding 

the regulatory compliance issue of 

improperly listing the ETFs without 

CSSAs, or without Commission 

approval, while providing a clear 

mechanism to acquire surveillance and 

trading information when necessary 

from a foreign regulator via the 

Commission.’’ 23

III. Discussion 

Under section 19(b)(2)(C) of the Act, 

the Commission shall approve a 

proposed rule change of a selfregulatory organization (‘‘SRO’’) if it 

finds that such proposed rule change is 

consistent with the requirements of the 

Act, and the rules and regulations 

thereunder that are applicable to such 

organization.24 The Commission shall 

disapprove a proposed rule change if it 

does not make such a finding.25

After careful consideration, the 

Commission does not find that the 

proposed rule changes are consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.26 In particular, the 

Commission does not find that the 

proposed rule changes are consistent 

with Section 6(b)(5) of the Act, which 

requires that the rules of a national 

securities exchange be designed, among 

other things, ‘‘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 mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest.’’ 27

As noted by MIAX, the Commission 

has permitted an SRO to rely on an 

agreement between the Commission and 

the applicable foreign regulator in the 

absence of a CSSA only if the SRO 

receives an assurance from the 

Commission that such an agreement can 

be relied on for surveillance purposes 

and provides, at a minimum, for the 

exchange of transaction, clearing and 

customer information necessary to 

conduct an investigation.28 This 

assurance is necessary, because the 

Commission may enter into a variety of 

agreements with foreign regulators some 

of which may be unrelated to the 

sharing of surveillance information. 

After carefully and thoroughly 

reviewing the agreements cited by the 

Exchange in its proposals, the 

Commission is unable to provide the 

necessary assurance that such 

agreements can be relied on for 

surveillance purposes.29 Accordingly, 

the Commission cannot approve MIAX’s 

request to allow the listing and trading 

of options on iShares ETFs and Market 

Vectors ETFs, upon reliance on 

agreements entered into between the 

Commission and the applicable foreign 

regulators in place of a CSSA, in 

satisfaction of the Exchange’s Listing 

Standards.30 According to MIAX, such 

approval would be necessary to make 

the ETFs compliant with all of the 

applicable Listing Standards.31

The Commission notes that Rule 

700(b)(3) of its Rules of Practice 

reiterates that ‘‘[t]he burden to 

demonstrate that a proposed rule change 

is consistent with the Exchange Act . . . 

is on the self-regulatory organization 

that proposed the rule change.’’ 32 For 

the reasons articulated above, the 

Commission does not believe that MIAX 

has met that burden in this case. 

IV. Conclusion 

For the foregoing reasons, the 

Commission does not find that the 

proposed rule changes are consistent 

with the Act and the rules and 

regulations thereunder applicable to a 

national securities exchange, and, in 

particular, with Section 6(b)(5) of the 

Act. 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act, that the 

proposed rule changes (SR–MIAX– 

2014–30 and SR–MIAX–2014–39) be, 

and hereby are, disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03813 Filed 2–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74307; File No. SR–MIAX– 

2015–11] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Extend the Pilot Period 

Applicable to Rule 530 Relating To 

Limit Up/Limit Down 

February 19, 2015. 

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 February 

18, 2015, Miami International Securities 

Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

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 


asabaliauskas on DSK5VPTVN1PROD with NOTICES