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
Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 10197 

3See Exchange Rule 503(j). See also Securities 

Exchange Act Release Nos. 69210 (March 22, 2013), 

78 FR 18637 (March 27, 2013) (SR–MIAX–2013– 

12); 69342 (April 8, 2013), 78 FR 22017 (April 12, 

2013) (SR–MIAX–2013–12); 69234 (March 25, 

2013), 78 FR 19344 (March 29, 2013) (SR–MIAX– 

2013–15); 69354 (April 9, 2013), 78 FR 22357 (April 

15, 2013) (SR–MIAX–2013–15). 

4See Securities Exchange Act Release No. 71881 

(April 4, 2014), 79 FR 19956 (April 10, 2014) (SR– 

MIAX–2014–14). 

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

6 15 U.S.C. 78f(b)(5). 

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 a proposal to 

amend Exchange Rule 530 to extend the 

pilot period for the treatment of 

erroneous transactions during a Limit or 

Straddle State. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.miaxoptions.com/filter/

wotitle/rule_filing, 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 

Rule 530 (Limit Up-Limit Down) in 

order to extend the pilot period for the 

treatment of erroneous transactions that 

occur in a Limit or Straddle State until 

October 23, 2015. 

Exchange Rule 530(j) provides for the 

treatment of erroneous transactions 

occurring during Limit and Straddle 

States. Specifically, once an NMS Stock 

has entered a Limit or Straddle State, 

the Exchange will nullify a transaction 

in an option overlying such an NMS 

Stock as provided in the Rule 530(j). 

This provision was adopted for a one 

year pilot period beginning on the date 

of the implementation of the Plan to 

Address Extraordinary Market Volatility 

Pursuant to Rule 608 of Regulation 

NMS, April 8, 2013.3 The Exchange 

previously extended the pilot period for 

Rule 530(j) until February 20, 2015.4

The Exchange now proposes to extend 

the pilot period for Rule 530(j) until 

October 23, 2015 in order to allow the 

Exchange and the Commission 

additional time to collect and analyze 

data regarding the impact of Rule 530(j) 

on liquidity and market quality in the 

options markets. 

To assist the Commission in its 

analysis, the Exchange will provide the 

Commission and the public with data 

and analysis during the duration of the 

pilot in order to evaluate the impact of 

Limit and Straddle States on liquidity 

and market quality in the options 

markets. Specifically, by May 29, 2015, 

the Exchange represents that it shall 

provide the Commission and the public 

assessments relating to the impact of the 

obvious error Rules during Limit and 

Straddle States that (i) evaluate the 

statistical and economic impact of Limit 

and Straddle States on liquidity and 

market quality in the options markets; 

and (ii) assess whether the lack of 

obvious error rules in effect during the 

Straddle and Limit States are 

problematic. Additionally, each month 

during the pilot period the Exchange 

shall provide to the Commission and the 

public a dataset containing the data for 

each Straddle and Limit State in 

optionable stocks. For each stock that 

reaches a Straddle or Limit State, the 

number of options included in the 

dataset can be reduced by selecting 

options in which at least one (1) trade 

occurred on the Exchange during the 

Straddle or Limit State. For each of 

those options affected, each data record 

should contain the following 

information: (i) Stock symbol, option 

symbol, time at the start of the straddle 

or limit state, an indicator for whether 

it is a straddle or limit state; and (ii) for 

activity on the exchange—(A) executed 

volume, time-weighted quoted bid-ask 

spread, time-weighted average quoted 

depth at the bid, time-weighted average 

quoted depth at the offer, (B) high 

execution price, low execution price, (C) 

number of trades for which a request for 

review for error was received during 

Straddle and Limit States, (D) an 

indicator variable for whether those 

options outlined above have a price 

change exceeding 30% during the 

underlying stock’s Limit or Straddle 

state compared to the last available 

option price as reported by OPRA before 

the start of the Limit or Straddle state (1 

if observe 30% and 0 otherwise) and 

another indicator variable for whether 

the option price within five minutes of 

the underlying stock leaving the Limit 

or Straddle state (or halt if applicable) 

is 30% away from the price before the 

start of the Limit or Straddle state. 

2. Statutory Basis 

MIAX believes that its proposed rule 

change is consistent with Section 6(b) of 

the Act 5 in general, and furthers the 

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

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. Specifically, the 

proposal supports the objectives of 

perfecting the mechanism of a free and 

open market and the national market 

system because it promotes uniformity 

across markets concerning when and 

how to halt trading in all stock options 

as a result of extraordinary market 

volatility. In addition, the Exchange 

believes that the extension of the pilot 

will help ensure that market 

participants continue to benefit from the 

protections of the Limit Up-Limit Down 

Rules which will protect investors and 

the public interest while allowing the 

Exchange and the Commission 

additional time to collect and analyze 

data regarding the impact of Rules on 

liquidity and market quality in the 

options markets. 

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 

proposed changes are being made to 

extend the pilot program that provides 

for how the Exchange shall treat orders 

and quotes in options overlying NMS 

stocks when the Limit Up-Limit Down 

Plan is in effect and will not impose any 

burden on competition while providing 

certainty of treatment and execution of 

options orders during periods of 

extraordinary volatility in the 

underlying NMS stock, and facilitating 

appropriate liquidity during a Limit 

State or Straddle State. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
10198 Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 

7 15 U.S.C. 78s(b)(3)(A). 

8 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. 

9For 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). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 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 7 and Rule 19b–4(f)(6)(iii) 

thereunder.8

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.9

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–2015–11 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–2015–11. 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–MIAX– 

2015–11, and should be submitted on or 

before March 18, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03815 Filed 2–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74309; File No. SR– 

NYSEMKT–2015–10] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Extending the Pilot 

Period Applicable to Rule 953.1NY(c), 

Obvious and Catastrophic Errors, Until 

October 23, 2015 

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, NYSE MKT LLC (the 

‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 self-regulatory 

organization. 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 proposes to extend the 

pilot period applicable to Rule 

953.1NY(c), which addresses how the 

Exchange treats Obvious and 

Catastrophic Errors during periods of 

extreme market volatility, until October 

23, 2015. The pilot period is currently 

set to expire on February 20, 2015. The 

text of the proposed rule change is 

available on the Exchange’s Web site at 

www.nyse.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 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 


asabaliauskas on DSK5VPTVN1PROD with NOTICES