Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Notices 14425 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 74131 

(January 26, 2015), 80 FR 5161 (SR–MIAX–2015– 

04) (‘‘Notice’’). 

4See Letter to Brent J. Fields, Secretary, 

Commission, from Elizabeth King, Secretary and 

General Counsel, New York Stock Exchange, dated 

February 6, 2015 (‘‘NYSE Letter’’) (stating that 

‘‘NYSE Group agrees with . . . and is supportive of 

MIAX’s efforts to make options available as a risk 

management tool for those ETFs listed on an 

equities exchange pursuant to generic listing 

standards without the requirement for a CSSA’’). 

5See MIAX Rule 402(i). 

6See MIAX Rule 402(i)(5)(ii)(A) (renumbered as 

402(i)(E)(2)(ii)(A) as part of the proposed rule 

change). 

7See MIAX Rule 402(i)(5)(ii)(B) (renumbered as 

402(i)(E)(2)(ii)(B) as part of the proposed rule 

change). 

8See MIAX Rule 402(i)(5)(ii)(C) (renumbered as 

402(i)(E)(2)(ii)(C) as part of the proposed rule 

change). 

9See, e.g., NYSE MKT Rule 1000, Commentary 

.03(a)(B); NYSE MKT Rule 1000A, Commentary 

.02(a)(B); NYSE Arca Equities Rule 5.2(j)(3), 

Commentary .01(a)(B); NYSE Arca Equities Rule 

8.100, Commentary .01(a)(B); NASDAQ Rule 

5705(a)(3)(A)(ii); NASDAQ Rule 5705(b)(3)(A)(ii); 

BATS Rule 14.11(b)(3)(A)(ii); and BATS Rule 

14.11(c)(3)(A)(ii). See also Securities Exchange Act 

Release Nos. 54739 (November 9, 2006), 71 FR 

66993 (November 17, 2006) (SR-Amex-2006–78); 

55621 (April 12, 2007), 72 FR 19571 (April 18, 

2007) (SR–NYSEArca-2006–86); and 55269 

(February 9, 2007), 72 FR 7490 (February 15, 2007) 

(SR–NASDAQ–2006–050). 

10See Proposed MIAX Rule 402(i)(E)(2)(i). See 

also NYSE MKT Rule 1000, Commentary .03(a)(B); 

NYSE MKT Rule 1000A, Commentary .02(a)(B); 

NYSE Arca Equities Rule 5.2(j)(3), Commentary 

.01(a)(B); NYSE Arca Equities Rule 8.100, 

Commentary .01(a)(B); NASDAQ Rule 

5705(a)(3)(A)(ii); NASDAQ Rule 5705(b)(3)(A)(ii); 

BATS Rule 14.11(b)(3)(A)(ii); and BATS Rule 

14.11(c)(3)(A)(ii). 

11 Id. 

12See Proposed MIAX Rules 402(i)(E)(2)(ii)(A)– 

(C). 

13See Notice, supra note 3. 

14 15 U.S.C. 78f. 

15Additionally, in approving the proposed rule 

change, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503 

or by sending an email to: Shagufta_

Ahmed@omb.eop.gov; and (ii) Pamela 

Dyson, Director/Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

100 F Street NE., Washington, DC 

20549, or send an email to: PRA_

Mailbox@sec.gov. Comments must be 

submitted to OMB within 30 days of 

this notice. 

Dated: March 13, 2015. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–06315 Filed 3–18–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74509; File No. SR–MIAX– 

2015–04] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Order Approving a Proposed Rule 

Change To Amend MIAX Rule 402 

March 13, 2015. 

I. Introduction 

On January 16, 2015, 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 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend its listing standards under 

Exchange Rule 402 to eliminate a 

requirement that the Exchange obtain a 

comprehensive surveillance sharing 

agreement (‘‘CSSA’’) before listing and 

trading options that overlie certain 

exchange-traded fund shares (‘‘ETFs’’), 

provided such ETFs are listed pursuant 

to generic listing standards on an 

equities exchange for portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes under which a CSSA with a 

foreign market is not required. The 

proposed rule change was published for 

comment in the Federal Register on 

January 30, 2015.3 The Commission 

received one comment letter supporting 

the proposed rule change.4 This order 

approves the proposed rule change. 

II. Description of the Proposal 

The Exchange allows for the listing 

and trading of options on ETFs that 

satisfy certain listing standards.5 These 

rules require, in part, that (i) any nonU.S. component securities of an index 

or portfolio of securities on which the 

ETFs are based that are not subject to 

CSSAs do not in the aggregate represent 

more than 50% of the weight of the 

index or portfolio; 6 (ii) component 

securities of an index or portfolio of 

securities on which the ETFs are based 

for which the primary market is in any 

one country that is not subject to a 

CSSA do not represent 20% or more of 

the weight of the index; 7 and (iii) 

component securities of an index or 

portfolio of securities on which the 

ETFs are based for which the primary 

market is in any two countries that are 

not subject to CSSAs do not represent 

33% or more of the weight of the index.8

The generic listing standards on equities 

exchanges for the listing of portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes do not, however, contain a 

parallel requirement regarding CSSAs.9

The Exchange proposes to amend its 

listing standards to enable the Exchange 

to list and trade options on certain ETFs 

without a CSSA provided that such 

ETFs that underlie options are listed on 

an equities exchange pursuant to the 

generic listing standards for portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes under which a CSSA is not 

required.10 Accordingly, the proposed 

rule change would provide a limited 

exception to the requirement regarding 

CSSAs under the Exchange’s listing 

standards only in circumstances where 

the underlying ETF was listed on an 

equities exchange pursuant to generic 

listing standards for international or 

global indexes that do not require such 

exchange to enter into a CSSA with a 

foreign market.11 The requirement for 

the Exchange to enter into a CSSA with 

a foreign market would continue to 

apply with respect to products that do 

not fit under the proposed exception.12

In addition, options on ETFs that may 

be listed and traded without a CSSA 

under this proposal would be subject to, 

in all other respects, the Exchange’s 

existing listing and trading rules that 

apply to options on ETFs and would be 

captured under the Exchange’s 

surveillance program for options on 

ETFs.13

Finally, the Exchange proposes 

several technical and non-substantive 

changes to the formatting of Rule 402(i), 

including relocating current Rule 

402(i)(5)(ii)(E) to proposed Rule 

402(i)(E)(1)(iii) and the re-numbering of 

current Rule 402(i)(5)(ii) to proposed 

Rule 402(i)(E)(2)(ii). In addition, the 

Exchange proposes making corrections 

to inaccurate citations located in Rule 

403(g)(1) and (2), so that Rule 403(g)(1) 

properly cites to Rule 402(i)(E)(1)(i) 

regarding closed-end ETFs and Rule 

403(g)(2) properly cites to Rule 

402(i)(E)(1)(ii) regarding open-end ETFs. 

III. Discussion and Commission’s 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of 

section 6 of the Act 14 and the rules and 

regulations thereunder applicable to a 

national securities exchange.15

Specifically, the Commission finds that 

the proposed rule change is consistent 


Rmajette on DSK2VPTVN1PROD with NOTICES
14426 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Notices 

16 15 U.S.C. 78f(b)(5). 17See Proposed MIAX Rule 402(i)(E)(2)(i). See 

also NYSE MKT Rule 1000, Commentary .03(a)(B); 

NYSE MKT Rule 1000A, Commentary .02(a)(B); 

NYSE Arca Equities Rule 5.2(j)(3), Commentary 

.01(a)(B); NYSE Arca Equities Rule 8.100, 

Commentary .01(a)(B); NASDAQ Rule 

5705(a)(3)(A)(ii); NASDAQ Rule 5705(b)(3)(A)(ii); 

BATS Rule 14.11(b)(3)(A)(ii); and BATS Rule 

14.11(c)(3)(A)(ii). 

18See Securities Exchange Act Release No. 40761 

(December 8, 1998), 63 FR 70952, 70959 (December 

22, 1998). 

19See Notice, supra note 3. 

20 Id. 

21See NYSE Letter, supra note 4. 

22See Securities Exchange Act Release No. 54739, 

supra note 9 (SR-Amex-2006–78). Subsequently, 

other exchanges filed similar proposals that were 

approved by the Commission. See, e.g., Securities 

Exchange Act Release Nos. 55621, supra note 9 

(approving SR–NYSEArca-2006–86); and 55269, 

supra note 9 (approving SR–NASDAQ–2006–050). 

23See id. 

24For example, with respect to ETFs for portfolio 

depositary receipts based on international or global 

indexes, the generic listing standards generally 

contain the following requirements with respect to 

the underlying index: (1) Component stocks that in 

the aggregate account for at least 90% of the weight 

of the index or portfolio each shall have a minimum 

market value of at least $100 million; (2) component 

stocks that in the aggregate account for at least 90% 

of the weight of the index or portfolio each shall 

have a minimum worldwide monthly trading 

volume over the most recent six-month period of at 

least 250,000 shares; (3) that the index observe 

certain concentration limits (e.g., that no 

component may exceed 25% of the weight of the 

index and that the five most heavily weighted 

components may not exceed 60% of the weight of 

the index); (4) that there be a minimum number of 

20 component stocks in the index; and (5) that each 

component either be an exchange-listed NMS stock 

or, if a non-U.S. stock, be listed and traded on an 

exchange that has last-sale reporting. See, e.g., 

NYSE MKT Rule 1000, Commentary .03; NYSE 

Arca Equities Rule 8.100, Commentary .01; 

NASDAQ Rule 5705(a); and BATS Rule 14.11(b). 

The requirements with respect to the underlying 

index under the generic listing standards for index 

fund shares based on international or global indexes 

are substantially similar. See, e.g., NYSE MKT Rule 

1000A, Commentary .02; NYSE Arca Equities Rule 

5.2(j)(3), Commentary .01; NASDAQ Rule 5705(b); 

and BATS Rule 14.11(c). 

25See, e.g., Securities Exchange Act Release No. 

54739, supra note 9. 

26 Id. at 71 FR 66995 n.18. See also supra note 

24 and accompanying text. 

27See Securities Exchange Act Release No. 54739, 

supra note 9, at 71 FR 66997. 

28See supra note 24 and accompanying text. 

29 15 U.S.C. 78s(b)(2). 

30 17 CFR 200.30–3(a)(12). 

with section 6(b)(5) of the Act,16 which 

requires, among other things, that the 

Exchange’s rules be designed to promote 

just and equitable principles of trade, 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. 

MIAX proposes to eliminate the 

requirement that it obtain a CSSA with 

the applicable foreign market before 

trading options on certain ETFs that 

track broad-based indexes of 

securities.17 CSSAs help to ensure that 

the listing exchange has the ability to 

obtain the information necessary to 

detect and deter potential trading 

abuses.18 According to the Exchange, it 

believes that this proposed listing 

standard for options on ETFs is 

reasonable for international and global 

indexes, and, when applied in 

conjunction with the other listing 

requirements, would result in options 

overlying ETFs that are sufficiently 

broad-based in scope and therefore not 

readily susceptible to manipulation.19

Moreover, the Exchange believes that 

the proposed rule change would benefit 

investors by providing valuable risk 

management tools.20 The NYSE Group 

agrees with these statements by the 

Exchange and supports the proposal.21

The Commission approved generic 

listing standards for ETFs based on 

international or global indexes in 

2006.22 At that time, the Commission 

determined that for certain ETFs based 

on broad-based indexes of securities, the 

generic listing standards for equities 

exchanges need not require the 

exchange to obtain a CSSA to list and 

trade such ETFs.23 These generic ETF 

listing standards contain quantitative 

criteria with respect to components 

included in the ETF’s underlying index 

that provide minimum thresholds 

regarding trading volume, market 

capitalization, number of index 

components, and index concentration 

limits.24 They do not, however, require 

the listing exchange to obtain a CSSA 

with the home country market for the 

underlying index components.25 The 

Commission stated that a CSSA with the 

home country market was not required, 

because the listing standards provided 

for minimum levels of liquidity, 

concentration, and pricing transparency 

for index components.26 In addition, the 

Commission noted that the generic 

listing standards for ETFs based on 

global or international indexes applied 

in conjunction with the other applicable 

listing requirements would ‘‘permit the 

listing only of ETFs that are sufficiently 

broad-based in scope to minimize 

potential manipulation . . . [and] are 

designed to preclude ETFs from 

becoming surrogates for trading in 

unregistered securities.’’ 27

MIAX now seeks to establish parallel 

listing standards for options. The 

Commission believes that it is 

consistent with the Act for the Exchange 

to list and trade options that overlie 

ETFs, provided such ETFs are listed 

pursuant to generic listing standards on 

equities exchanges for portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes under which a CSSA with a 

foreign market is not required.28 All of 

the other listing criteria under MIAX’s 

rules would continue to apply to any 

such options. In addition, the 

Commission notes that the requirement 

for MIAX to obtain a CSSA will 

continue to apply to other products that 

do not fit this limited exception. The 

Commission believes that the proposed 

rule change should facilitate listing and 

trading of additional investment options 

for market participants seeking efficient 

trading and hedging vehicles and 

thereby, benefit investors by providing 

them with valuable risk management 

tools. 

IV. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,29 that the 

proposed rule change (File No. SR– 

MIAX–2015–04) be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–06285 Filed 3–18–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

Washington, DC 20549–2736. 

Extension: Rule 15g–4. 

SEC File No. 270–347, OMB Control No. 

3235–0393. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(Commission) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for extension of the 

existing collection of information 

provided for in Rule 15g–4—Disclosure 

of compensation to brokers or dealers 

(17 CRF 240.15g–4) under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.). 

Rule 15g–4 requires brokers and 

dealers effecting transactions in penny 

stocks for or with customers to disclose 

the amount of compensation received by 

the broker-dealer in connection with the 

transaction. The purpose of the rule is 

to increase the level of disclosure to 

investors concerning penny stocks 


Rmajette on DSK2VPTVN1PROD with NOTICES