Federal Register / Vol. 79, No. 213 / Tuesday, November 4, 2014 / Notices 65445 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange notes that this proposal is only 

intended to be effective until the joint efforts by the 

exchanges to create uniform trade nullification and 

adjustment rules are approved and in effect. Once 

the uniform rule has been approved and is effective, 

the Exchange will amend its rules appropriately. 

4The Exchange notes that, as proposed, Rule 6.19 

[sic] will only apply to trades that were executed 

on the Exchange and, as such, any orders that were 

either fully or partially routed to, or executed, on 

another Exchange will not be subject to the 

Proposed Rule 531. 

5See Securities Exchange Act Release No. 72970 

(September 3, 2014), 79 FR 53498 (September 9, 

2014) (SR–CBOE–2014–066). 

clearance of the Additional WE 

Sovereign Contracts will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments relating to the 

acceptance of the Additional WE 

Sovereign Contracts for clearing have 

not been solicited or received. ICE Clear 

Europe will notify the Commission of 

any written comments received by ICE 

Clear Europe. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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– 

ICEEU–2014–18 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–ICEEU–2014–18. 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 

filings will also be available for 

inspection and copying at the principal 

office of ICE Clear Europe and on ICE 

Clear Europe’s Web site at https://

www.theice.com/notices/

Notices.shtml?regulatoryFilings. 

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–ICEEU–2014–18 and 

should be submitted on or before 

November 25, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26120 Filed 11–3–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73463; File No. SR–MIAX– 

2014–54] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Add Exchange Rule 531, 

Trade Nullification and Price 

Adjustment Procedure 

October 29, 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 20, 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 the Substance 

of the Proposed Rule Change 

The Exchange is filing a proposal to 

add Rule 531, Trade Nullification and 

Price Adjustment Procedure. 

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 add Rule 

531, Trade Nullification and Price 

Adjustment Procedure.3 As proposed, 

Rule 531 will allow for transactions to 

be nullified if both parties to the 

transaction agree to the nullification and 

allow the price of transaction [sic] and 

authorized by the Exchange.4 The 

proposal is based upon a recent filing of 

another options exchange.5

The Exchange proposes to add Rule 

531, ‘‘Trade Nullification and Price 

Adjustment Procedure,’’ which would: 

(a) Allow for any trades on the Exchange 


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65446 Federal Register / Vol. 79, No. 213 / Tuesday, November 4, 2014 / Notices 

6See supra note 4. 

7The Exchange notes that no changes are being 

proposed to the procedures for nullification or 

adjustment of a trade by mutual agreement in the 

Exchange’s obvious error rules. See MIAX Rule 

521(c)(3). MIAX Rule 521(c)(3) provides that the 

‘‘determination as to whether a trade was 

automatically executed at an erroneous price may 

be made by mutual agreement of the affected parties 

to a particular transaction within the time periods 

specified in subparagraphs (e)(1) or (2) [of Rule 531 

[sic]] below. A trade may be nullified or adjusted 

on the terms that all parties to a particular 

transaction agree. In the absence of mutual 

agreement by the parties, a particular trade may 

only be nullified or adjusted when the transaction 

results from an Obvious Error as provided in this 

Rule.’’ With the effectiveness of Proposed Rule 531, 

members will have two options to choose from in 

order to have the their trades nullified or adjusted 

by mutual agreement: (i) request under the 

procedures of MIAX Rule 521(c)(3) including the 

timeframes in Rule 521(e)(1), (2); or (ii) request 

under the procedures of Proposed Rule 531 which 

requires the authorization of the Exchange prior to 

the nullification or adjustment. The Exchange 

believes both provisions are complimentary [sic] in 

that they provide protections in different situations 

under procedures that are correspondingly 

appropriate based on the situation in which a 

nullification or an adjustment is requested. 

8For example, the Exchange would ensure that 

the mutually agreed upon price would not have 

traded through resting interest at the time of the 

initial execution. 

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

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

11 15 U.S.C. 78s(b)(3)(A). 

12 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. 

to be nullified if both parties to the trade 

agree to such nullification, and (b) allow 

for prices of executions to be adjusted 

if the price adjustment is agreed upon 

by both parties of the trade and 

authorized by the Exchange.6

The Exchange is also proposing to add 

a provision to allow Members to 

mutually agree to adjust a price of an 

execution. The Exchange believes this 

provision is necessary given the benefits 

of adjusting a trade price rather than 

nullifying the trade completely. Because 

options trades are used to hedge 

transactions in other markets, including 

securities and futures, many Members, 

and their customers, would rather adjust 

prices of executions rather than nullify 

the transactions and, thus, lose a hedge 

altogether. As such, the Exchange 

believes it is in the best interest of 

investors to allow for price adjustments 

as well as nullifications. In addition, the 

Exchange believes it is in the nature of 

a fair and orderly market to allow for 

price adjustments rather than only 

cancellations because an adjustment 

will result in the least amount of 

disruption to the overall market. The 

Exchange also notes that current 

Exchange Rules allow for prices of 

trades to be adjusted at the consent of 

both parties if such transactions are 

within the current obvious error 

provisions.7 The Exchange is now 

proposing to merely allow this practice 

for any trade. 

As proposed, Rule 531 expressly 

states that trades may be subject to 

nullification or price adjustment only if 

such trades are authorized by the 

Exchange. As part of the authorization 

process, in the case of a mutual 

nullification or mutual price 

adjustment, the Exchange will only 

authorize if the Exchange received 

verification from both parties to the 

trade that a mutual agreement has been 

made. In addition, prior to an 

authorization for a mutual price 

adjustment, the Exchange will ensure 

the agreed upon price would have been 

permissible and in compliance with all 

Exchange and Securities and Exchange 

Commission Rules, as amended, at the 

time the original transaction was 

executed.8 Finally, the proposed rule 

will state that the format and 

information required by the Exchange 

for this submission will be released by 

the Exchange via Regulatory Circular. 

As such, prior to Rule 531 becoming 

operative, the Exchange will provide 

Members with specific requirements via 

an Exchange Regulatory Circular. The 

circular will, among other things, state 

specific timeframes required for 

requests and the format in which the 

requests will be accepted by the 

Exchange. 

To conclude, the Exchange believes 

that the proposed changes are in 

furtherance of the Act because the 

proposed Rule 531 will allow Members 

to agree to nullify transactions or adjust 

prices of transactions to maintain a fair 

and orderly market. As stated above, the 

Exchange intends to release a 

Regulatory Circular to announce the 

implementation of the Rule and other 

specifics surrounding the procedures of 

the implementation. In addition, prior 

to implementation, the Exchange will 

ensure it has proper policies and 

procedures in place to correctly 

administer the Rule. 

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. 

More specifically, the Exchange 

believes that the proposed changes are 

consistent with the Act as they are 

designed to promote just and equitable 

principles and protect investors and the 

public interest. Because options trades 

are used to hedge transactions in other 

markets, including securities and 

futures, many market participants 

would rather adjust prices of executions 

rather than nullify the transactions and, 

thus, lose a hedge altogether. As such, 

the Exchange believes it is in the best 

interest of investors to allow for price 

adjustments as well as nullifications. In 

addition, the Exchange believes it is in 

the nature of a fair and orderly market 

to allow for price adjustments rather 

than only cancellations because an 

adjustment will result in the least 

amount of disruption to the overall 

market. Finally, the Exchange does not 

believe that the proposed changes are 

unfairly discriminatory because they 

will be applied to all Members equally. 

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. In fact, the 

Exchange believes that the proposed 

rule change will foster competition as it 

will allow for less overall disruption to 

the market and encourage participation 

on the Exchange. 

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 11 and Rule 19b–4(f)(6) 12

thereunder. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 


rmajette on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 213 / Tuesday, November 4, 2014 / Notices 65447 

13 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3A Member is defined as ‘‘any registered broker 

or dealer that has been admitted to membership in 

the Exchange.’’ See Exchange Rule 1.5(n). 

4See Securities Exchange Act Release No. 73412 

(October 23, 2014) (SR–BATS–2014–052), available 

at http://www.sec.gov/rules/sro/bats.shtml. 

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 rulecomments@sec.gov. Please include File 

Number SR–MIAX–2014–54 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–2014–54. 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– 

2014–54, and should be submitted on or 

before November 25, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26124 Filed 11–3–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73462; File No. SR–BATS– 

2014–053] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Related to Fees for Use 

of BATS Exchange, Inc. 

October 29, 2014. 

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 October 

24, 2014, BATS Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BATS’’) 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 the Substance 

of the Proposed Rule Change 

The Exchange filed a proposal to 

amend the fee schedule applicable to 

Members 3 and non-members of the 

Exchange pursuant to BATS Rules 

15.1(a) and (c). Changes to the fee 

schedule pursuant to this proposal are 

effective upon filing. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.batstrading.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 Exchange proposes to modify its 

fee schedule effective immediately in 

order to adopt pricing charged by the 

Exchange for Supplemental Peg Orders 

and several new routing strategies, as 

described below. 

Supplemental Peg Orders 

The Exchange recently adopted a new 

order type, the Supplemental Peg Order, 

which is a non-displayed limit order 

described in Rule 11.9(c)(19). The 

Exchange proposes to modify its fee 

schedule to make clear that standard 

pricing for all other types of NonDisplayed Liquidity, as defined in the 

fee schedule, applies to Supplemental 

Peg Orders. Thus, the Exchange 

proposes to provide a rebate of $0.0017 

per share for all Supplemental Peg 

Orders executed on the Exchange that 

add liquidity in securities priced $1.00 

and above. As with all orders adding 

liquidity to the Exchange, Supplemental 

Peg Orders in securities priced below 

$1.00 would not receive a liquidity 

rebate. 

Routing Strategies 

The Exchange recently filed a 

proposed rule change to adopt several 

new routing options in connection with 

the Exchange’s technology integration 

with EDGA Exchange, Inc. (‘‘EDGA’’) 

and EDGX Exchange, Inc. (‘‘EDGX’’).4

The Exchange proposes to adopt pricing 

for the new routing options, as set forth 

below, and also proposes various 

structural changes to the fee schedule. 

First, the Exchange adopted two new 

routing strategies that are similar to the 

Exchange’s existing standard best 

execution routing strategies. 

Specifically, the Exchange adopted 

ROUT and ROUX, which are similar to 

Parallel D and Parallel 2D. Accordingly, 

the Exchange proposes to charge the 

same fee for ROUT and ROUX routed 

executions as it does for Parallel D and 


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