Federal Register / Vol. 79, No. 207 / Monday, October 27, 2014 / Notices 63979 

62See Tamar Frankel, Regulation and Investors’ 

Trust in the Securities Markets, 68 Brook. L. Rev. 

439 (2002), at 448 (arguing that once investors’ trust 

is lost, they will flee the stock markets and turn to 

other types of investments that ‘‘they can see, 

evaluate and guard for themselves.’’). 

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

2 17 CFR 240.19b–4. 

3MIAX Express Interface is a connection to MIAX 

systems that enables Market Makers to submit 

electronic quotes to MIAX. 

4Where there is an imbalance at the price at 

which the maximum number of contracts can trade 

that is also at or within the highest valid width 

quote bid and lowest valid width quote offer, the 

System will calculate an Expanded Quote Range 

(‘‘EQR’’). The EQR will be recalculated any time a 

Route Timer or Imbalance Timer expires if material 

conditions of the market (imbalance size, ABBO 

price or size, liquidity price or size, etc.) have 

changed during the timer. Once calculated, the EQR 

will represent the limits of the range in which 

transactions may occur during the opening process. 

See Exchange Rule 503(f)(5). 

5After the Exchange has determined to end a 

trading system halt, the System will broadcast to 

subscribers of the Exchange’s data feeds, a Post-Halt 

Notification. See Exchange Rule 504(d). 

6 If a Market Maker quote was all or part of the 

MIAX Best Bid or Offer (‘‘MBBO’’) and the Market 

Maker’s quote was exhausted by the partial 

execution of the initiating order, the System will 

pause the market for a time period not to exceed 

one second to allow additional orders or quotes 

refreshing the liquidity at the MBBO to be received 

(‘‘liquidity refresh pause’’). See Exchange Rule 

515(c)(2). 

7MIAX Express Interface is a connection to MIAX 

systems that enables Market Makers to submit 

electronic quotes to MIAX. 

foundational principle underlying 

section 22(d) and rule 22c–1 under the 

Act that shareholders be treated 

equitably. 

44. Further, any breakdown in the 

pricing or the ability to price the 

proposed ETF may result in damage to 

market confidence in secondary trading 

of ETFs—not just in the proposed 

product, but in ETFs generally. 

Investors may exit the ETF market 

because of a loss of trust, particularly in 

actively managed ETFs, should the 

proposed ETFs fail to function in a 

manner similar to current ETFs.62 For 

this additional reason, the Commission 

preliminarily believes that it is not 

necessary or appropriate, nor in the 

public interest or consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the Act, to grant the 

requested relief. 

* * * * * 

45. In light of the foregoing, the 

Commission remains unconvinced that 

Applicants’ proposed ETFs meet the 

standard for relief under section 6(c) of 

the Act. Accordingly, absent a request 

for a hearing that is granted by the 

Commission, the Commission intends to 

deny Applicants’ request for an 

exemption under section 6(c) of the Act 

as not necessary or appropriate in the 

public interest and as not consistent 

with the protection of investors and the 

purposes fairly intended by the policy 

and provisions of the Act. 

By the Commission. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–25437 Filed 10–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73395; File No. SR–MIAX– 

2014–53] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the MIAX Top of 

Market (‘‘ToM’’) and AIS Data Feeds 

October 21, 2014. 

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 October 6, 2014, Miami International 

Securities Exchange LLC (‘‘MIAX’’ 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 the MIAX Top of Market 

(‘‘ToM’’) and AIS data feeds. 

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 the 

MIAX Top of Market (‘‘ToM’’) market 

data feed, the MIAX Express Interface 

(‘‘MEI’’) connectivity service,3 and 

Administrative Information Subscriber 

(‘‘AIS’’) market data feed. Specifically, 

the Exchange proposes removing 

messages related to administrative 

information and Liquidity Seeking 

Events (‘‘LSE’’) from ToM and the MEI 

Port connection, while also adding the 

information to the AIS data feed to the 

extent that it is not already included 

with AIS. 

ToM provides market participants 

with a direct data feed that includes the 

Exchange’s best bid and offer, with 

aggregate size, and last sale information, 

based on displayable order and quoting 

interest on the Exchange. The ToM data 

feed includes data that is identical to 

the data sent to the processor for the 

Options Price Regulatory Authority 

(‘‘OPRA’’). The ToM and OPRA data 

leave the MIAX system at the same time, 

as required under Section 5.2(c)(iii)(B) 

of the Limited Liability Company 

Agreement of the Options Price 

Reporting Authority LLC (the ‘‘OPRA 

Plan’’), which prohibits the 

dissemination of proprietary 

information on any more timely basis 

than the same information is furnished 

to the OPRA System for inclusion in 

OPRA’s consolidated dissemination of 

options information. In addition to 

MIAX’s best bid and offer, with 

aggregate size and last sale information, 

subscribers that currently subscribe to 

ToM also receive: opening imbalance 

condition information; opening routing 

information; Expanded 

Quote Range 4 information, as 

provided in MIAX Rule 503(f)(5); PostHalt Notification,5 as provided in MIAX 

Rule 504(d), and Liquidity Refresh,6

condition information, as provided in 

MIAX Rule 515(c)(2). This additional 

information (the ‘‘administrative 

information’’) is included in the ToM 

feed as secondary information. The 

administrative information is also 

currently available to non-Market 

Makers through the AIS data feed and 

MIAX Market Makers via connectivity 

with the MIAX Express Interface 

(‘‘MEI’’),7 for which they are assessed 

connectivity fees. 

The Exchange proposes to remove all 

the secondary administrative 

information including LSE related 

information from the ToM data feed and 

from the MEI Port connectivity service, 

with the exception of the Post-Halt 

Notification. The secondary 

administrative information and 


tkelley on DSK3SPTVN1PROD with NOTICES
63980 Federal Register / Vol. 79, No. 207 / Monday, October 27, 2014 / Notices 

8See SR–MIAX–2014–51. 

9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 

11The Exchange notes that the ToM market data 

product competes with similar products offered by 

other markets such as NASDAQ OMX PHLX, LLC 

(‘‘PHLX’’) and the International Stock Exchange 

LLC (‘‘ISE’’). For example, PHLX and ISE offer 

market data products that are similar to ToM: data 

feeds that show the top of the market entitled Top 

of PHLX Options (‘‘TOPO’’) and the ISE TOP Quote 

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

60459 (August 7, 2009), 74 FR 41466 (August 17, 

2009) (SR–Phlx–2009–54) (Order Approving a 

Proposed Rule Change to Establish Fees for the Top 

of PHLX Options Direct Data Feed Product). 

12 15 U.S.C. 78s(b)(3)(A). 

13 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. 

Liquidity Seeking Event data being 

removed from ToM and the MEI Port 

includes: (i) Opening imbalance 

condition information; (ii) opening 

routing information; (iii) Expanded 

Quote Range information, as provided 

in MIAX Rule 503(f)(5); (iv) Liquidity 

Refresh messages, as provided in MIAX 

Rule 514(c)(2); (v) Route Timer 

information, as provided in MIAX Rule 

529; (vi) PRIME related auction 

messages, as provided in MIAX Rule 

515A; and (vii) any other similar timer 

or auction related messages. ToM 

subscribers will continue to receive the 

direct data that includes the Exchange’s 

best bid and offer, with aggregate size, 

and last sale information based on 

displayable order and quoting interest 

on the Exchange, and the Post-Halt 

Notification. The ToM data feed 

includes data that is identical to the 

data sent to the processor for the 

Options Price Regulatory Authority 

(‘‘OPRA’’). Both Full Service and 

Limited Service MEI Ports will continue 

to provide Market Makers with the 

ability to send quotes and purge 

messages in the same manner as they do 

currently. The Exchange also proposes 

to amend the AIS data feed to 

specifically include all the secondary 

administrative information and LSE 

related information that is being 

removed from ToM and the MEI Port 

connection. The Exchange notes that 

most of this administrative information 

is already included in the AIS data feed, 

as described above. In order to receive 

the secondary administrative 

information and LSE related messages, 

the ToM subscribers and users of the 

MEI Port connectivity service will have 

to connect to the Exchange with an AIS 

data feed. The Exchange notes that ToM 

subscribers may receive the AIS data 

feed at no additional cost.8

Because of the technology changes 

associated with this rule proposal, the 

Exchange will announce the 

implementation date of the proposal in 

a Regulatory Circular to be published no 

later than 90 days after the publication 

of the approval order in the Federal 

Register. The implementation date will 

be no later than 90 days following 

publication of the Regulatory Circular 

announcing publication of the approval 

order in the Federal Register. 

2. Statutory Basis 

The Exchange believes that its 

proposed rule change is consistent with 

Section 6(b) 9 of the Act in general, and 

furthers the objectives of Section 

6(b)(5) 10 of the Act 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 proposed changes to the market 

data products are designed to increase 

the efficient use of connectivity 

bandwidth between market participants 

and the Exchange in a manner that 

promotes just and equitable principles 

of trade, fosters cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, 

removes impediments to and perfect the 

mechanisms of a free and open market 

and a national market system. The 

Exchange believes that the changes will 

enhance the quality and usefulness of 

ToM, the MEI Ports, and AIS market 

data product to the benefit of all market 

participants that subscribe to such 

products. 

The ToM market data product is 

designed to promote just and equitable 

principles of trade by providing all 

subscribers with top of market data that 

should enable them to make informed 

decisions on trading in MIAX options 

by using the ToM data to assess current 

market conditions that directly affect 

such decisions. The market data 

provided by ToM and AIS, and the 

connectivity of MEI, removes 

impediments to, and is designed to 

further perfect, the mechanisms of a free 

and open market and a national market 

system by making the MIAX market 

more transparent and accessible to 

market participants making routing 

decisions concerning their options 

orders. The ToM market data product is 

also designed to protect investors and 

the public interest by providing data to 

subscribers that is already currently 

available on other exchanges and will 

enable MIAX to compete with such 

other exchanges, thereby offering market 

participants with additional data in 

order to seek the market center with the 

best price and the most liquidity on 

which to execute their transactions, all 

to the benefit of investors and the public 

interest, and to the marketplace as a 

whole. 

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. On the 

contrary, the Exchange believes that the 

changes to the market data products will 

enhance competition in the U.S. options 

markets by enhancing the quality and 

usefulness of a market data product that 

is similar to that which is currently 

provided on other options exchanges.11

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 12 and Rule 19b–4(f)(6) 13

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, 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 207 / Monday, October 27, 2014 / Notices 63981 

14 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. 72961 

(September 3, 2014), 79 FR 53500 (‘‘Notice’’). 

4See id. 

5See Securities Exchange Act Release No. 69897 

(July 1, 2013), 78 FR 40782, 40783 (July 8, 2013). 

6See Notice, supra note 3, at 53501. 

7See id. 

8See id. According to the Exchange, under the 

current rule, an ‘‘order imbalance’’ in an IPO 

security exists if: (1) The Current Reference Price 

disseminated immediately prior to commencing the 

release of the IPO for trading during the Pre-Launch 

Period and any of the three preceding Current 

Reference Prices differ by more than the greater of 

5 percent or 50 cents; (2) upon completion of the 

Cross calculation, the calculated price at which the 

security would be released for trading and any of 

the three preceding Current Reference Prices 

disseminated immediately prior to the initiation of 

the Cross calculation differ by more than the greater 

of 5 percent or 50 cents; or (3) all market orders will 

not be executed in the Cross. See id.; and NASDAQ 

Rule 4120(c)(7)(C). 

9The ‘‘Expected Price,’’ according to the 

Exchange, is the Current Reference Price displayed 

to the underwriter after the Exchange receives 

notice from the underwriter that the security is 

ready to trade. See Notice, supra note 3, at 53501, 

and Proposed NASDAQ Rule 4120(c)(8)(A)(i). 

10See Notice, supra note 3, at 53501. The 

Exchange is also proposing to reorganize certain 

provisions of NASDAQ Rule 4120 relating to the 

process for ending a trading halt of securities other 

than IPO securities, but is not making substantive 

modifications to these rules. See id. 

11See id. 

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 rulecomments@sec.gov. Please include File 

Number SR–MIAX–2014–53 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–2014–53. 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 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; 

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– 

2014–53 and should be submitted on or 

before November 17, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–25431 Filed 10–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73399; File No. SR– 

NASDAQ–2014–081] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Approving a Proposed Rule Change 

Related to Proposed Changes to 

NASDAQ Rule 4120(c) To Modify the 

Parameters for Releasing Securities 

for Trading Upon the Termination of a 

Trading Halt in a Security That Is the 

Subject of an Initial Public Offering 

October 21, 2014. 

I. Introduction 

On August 20, 2014, The NASDAQ 

Stock Market LLC (‘‘NASDAQ’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘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 

relating to its initial public offering 

(‘‘IPO’’) process. The proposed rule 

change was published for comment in 

the Federal Register on September 9, 

2014.3 The Commission received no 

comments on the proposal. This order 

approves the proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to amend 

NASDAQ Rule 4120(c) to modify the 

parameters for releasing securities for 

trading upon the termination of a 

trading halt in a security that is the 

subject of an IPO (the ‘‘IPO Halt Cross’’ 

or the ‘‘Cross’’).4 Currently, NASDAQ 

Rule 4120(c)(7)(B) governs the launch of 

trading of IPO securities approved for 

listing on the Exchange.5 NASDAQ Rule 

4120(c)(7)(B) provides a two-phase 

process in which there is a 15 minute 

Display Only Period in which market 

participants may enter quotes and 

orders in that IPO security in the 

NASDAQ systems, which is then 

followed by a ‘‘Pre-Launch Period’’ that 

is not of a fixed duration.6 According to 

the Exchange, the Pre-Launch Period 

continues until: (1) NASDAQ receives 

notice from the underwriter of the IPO 

that the security is ready to trade and 

there is no ‘‘order imbalance’’ 7 in the 

security, in which case the security is 

released for trading; or (2) the 

underwriter, with concurrence of 

NASDAQ, determines to postpone and 

reschedule the IPO. The Exchange states 

that it disseminates the ‘‘Current 

Reference Price,’’ which is an indication 

of the price at which the IPO Halt Cross 

would execute if it occurred at that 

time, every five seconds during the 

Display Only Period and the Pre-Launch 

Period.8

The Exchange proposes to replace its 

current process with a procedure under 

which the ‘‘Expected Price’’ 9 of the IPO 

Halt Cross will be displayed to the 

underwriter, who will then select price 

bands to ensure that the actual 

calculated price at which the IPO Halt 

Cross would occur does not deviate 

from the Expected Price by more than 

the selected amounts.10 According to 

the Exchange, price deviations between 

the Expected Price and the actual 

calculated price of the Cross can occur 

because market participants may 

continue to enter and cancel orders 

during the period between the display 

of the Expected Price to the underwriter 

and the commencement of the Cross 

calculation, a period of up to five 

seconds in duration.11

Under the proposal, the process for 

determining the end of the Pre-Launch 

Period and when the IPO security will 

be released for trading will be as 

follows: (1) NASDAQ receives notice 

from the underwriter of the IPO that the 

security is ready to trade; (2) the 

NASDAQ system will then calculate the 

Current Reference Price and display it to 

the underwriter (i.e., the Expected 

Price); (3) the underwriter agrees to go 

forward; (4) the NASDAQ system 

determines that all market orders will be 

executed in the cross; and (5) the 


tkelley on DSK3SPTVN1PROD with NOTICES