Document ID: SEC-2023-0821-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX Emerald, LLC
Posted Date: 2023-08-03T04:00Z

[Federal Register Volume 88, Number 148 (Thursday, August 3, 2023)]
[Notices]
[Pages 51374-51376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16503]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98018; File No. SR-EMERALD-2023-18]

Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Provide 
an Additional Means of Access to the Member Firm Portal Through an 
Application Programming Interface

July 28, 2023.
    Pursuant to 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 July 21, 2023, MIAX Emerald LLC (``MIAX Emerald'' 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 solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to provide an additional means to 
access its Member Firm Portal (``MFP'').\3\
---------------------------------------------------------------------------

    \3\ See MIAX Exchanges Member Firm Portal User Manual, available 
at https://www.miaxglobal.com/sites/default/files/page-files/MIAX_Exchanges_Member_Firm_Portal_User_Manual_01032023.pdf.
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-options/emerald-options/rule-filings, 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 provides Members access to an internet-facing portal 
which provides self-service functions to Members, known as the MFP. 
Specifically, the MFP allows Members to correct certain trade 
information required by the Options Clearing Corporation (``OCC''), 
such as the trade's account number, sub-account number, Clearing Member 
Trade Assignment (``CMTA''), Clearing Participant Give-Up, or account 
type. The MFP also provides Members the ability to adjust risk settings 
and allows Market Makers \4\ to request options class assignments. 
Members may also perform the following function via the MFP: selecting 
symbol assignments; editing existing symbol assignments; unassigning 
one or more symbol; retrieving symbol assignments; receiving export of 
symbol assignments for a business day; and retrieving assignment 
history for a given symbol assignment. The MFP allows Members to more 
efficiently manage their back office operations and assist them in 
providing accurate clearing information to the OCC. Currently, access 
to the MFP is provided on a per user basis, whereby Members seek to 
have individuals within their organization permissioned to access the 
MFP via a web portal on their behalf (known as the ``MFP User 
Interface'' or ``MFP UI''). The Exchange notes that other options 
exchanges make similar products available to firms for a monthly per 
user fee.\5\ The Exchange provides the MFP UI to Members free of 
charge.
---------------------------------------------------------------------------

    \4\ The term ``Market Makers'' refers to ``Lead Market Makers'', 
``Primary Lead Market Makers'' and ``Registered Market Makers'' 
collectively. See Exchange Rule 100.
    \5\ See BOX Exchange LLC Fee Schedule, Section III. D. The 
Nasdaq Stock Market LLC (``Nasdaq'') charges $200 per month, per 
user. See Nasdaq Rules Options 7 Pricing Schedule, Section 6 Nasdaq 
Options Maintenance Tool. See also Securities Exchange Act Release 
No. 96723 (January 20, 2023), 88 FR 5046 (January 26, 2023) (SR-BOX-
2023-03) (Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change to Establish a New Service and Related Fees for Use of 
the BOX Options Market LLC (``BOX'') Trade Management System).
---------------------------------------------------------------------------

    Members have requested that the Exchange also provide access to the 
MFP via an Application Programming Interface \6\ (``API'' and together 
``MFP API''), in addition to the current MFP UI accessed via the web 
portal. In sum, an API is a way for two or more computer programs to 
talk to each other. It is a software to software interface that defines 
the data and the transactions that can be communicated between systems. 
In providing the MPF API, functions that would otherwise be done 
manually via the MFP UI, can be automated. The MFP API, in essence, 
facilitates and expedites the transaction processing for the supported 
functionality such that the Exchange Members can automate their 
interactions with the MFP. This allows for more efficient processing, 
the potential reduction of operational risk due to issues caused by 
human error, the timeliness of the completion of MFP-related functions, 
etc.\7\ Providing API access to the MFP would allow Members to enable 
their systems and applications to communicate directly with the MFP, 
thereby eliminating or reducing the need for individuals to access the 
MFP UI via the web portal.
---------------------------------------------------------------------------

    \6\ The Exchange intends to submit a separate filing with the 
Commission pursuant to Section 19(b)(1) to propose fees for the 
Service.
    \7\ See, e.g., What is an API?, available at https://www.ibm.com/topics/api (last visited June 22, 2023).
---------------------------------------------------------------------------

    The Exchange does not propose to alter the current MFP or MFP UI. 
The Exchange simply proposes to provide an additional and optional 
means to access the MFP, in the form of an API, and Members would be 
able to perform the same functions they do today when they access the 
MFP UI via the web portal. API access to the MFP would allow a Member's 
applications to communicate directly with the MFP. Therefore, by its 
nature, the MFP API does not lend itself to access on a per user basis, 
as is the case today with the MFP UI via the web portal. API access 
would allow Members to automate functions they perform today on the 
MFP, such as adjusting risk settings or managing options assignments. 
Members who do not prefer to access the MFP API would be able to 
perform the same functions when accessing the MFP UI via the current 
web portal.
    The Exchange notes that use of accessing the MFP API would be 
completely voluntary and would simply be second optional means to 
access the MFP. Members who wish to continue to access the MFP UI via 
the web portal may continue to do so for no fee.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the requirements of Section 6(b) of the Act,\8\ in general, and Section 
6(b)(5),\9\ in particular, because it is designed to

[[Page 51375]]

prevent fraudulent and manipulative acts and practices, 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, and to remove impediments to and perfect the mechanism 
of a free and open market and a national market system.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange notes that providing the MFP API to Members is 
consistent with the Act in that the use of MFP API is completely 
voluntary and simply provides Members with an additional means to 
access the Exchange's MFP. The MFP is a useful tool for Members to 
manage their trading on the Exchange, including back office operations, 
risk controls settings, and Market Maker options assignments.
    As noted above, accessing the MFP via an API would be an optional 
alternative to web access. Those not electing to access the MFP via an 
API may continue to use the MFP UI via the web portal free of charge. 
The MFP, whether accessed via an API or web portal, allow Members to 
more efficiently manage their back office operations, assist them in 
providing accurate clearing information to the OCC and in selecting 
Market Maker options assignments. The Exchange notes that trade 
information in the MFP is specific to each Member and their trades, 
allowing them to conveniently verify, update, and/or correct 
transaction information as needed.
    Providing API access to the MFP would be provided purely for 
convenience, in response to Member demand, and would be entirely 
optional. As stated above, API access to the MFP would enable Members 
to connect their applications to the MFP allowing their application to 
communicate directly with the MFP. This enables Members to automate 
functions that would normally be performed by individual users access 
the MFP via the current web portal, such as adjusting risk settings and 
managing options assignements. Members who do not prefer to access the 
MFP API would be able to perform the same functions by accessing the 
MFP UI via the existing web portal.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. API access to 
the MFP would simply be an optional additional means to access the MFP. 
The Exchange does not believe there would be any competitive advantage 
for Members who access the MFP via an API over those who access it via 
the current web portal because Members would be able to perform the 
same functions via both modes of access. API access would simply be a 
convenience and would enable Members to automate those functions. The 
Exchange does not believe a Member's ability to automate this 
functionality provides any competitive advantage when trading on the 
Exchange. As such, the Exchange does not believe that the proposed rule 
change will impose any burden on intermarket or intramarket 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 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 if consistent with the 
protection of investors and the public interest, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) \11\ thereunder.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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, along 
with a brief description and 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. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative upon filing. The Exchange requested 
the waiver because it would allow the Exchange to expand the means of 
access to the MFP sooner and meet the demands of Members who have 
requested API access to meet their own back office needs. The Exchange 
stated that Members requested the ability to access the API so that 
they may automate certain functions and that they would be able to 
perform the same functions in the MFP regardless of whether they access 
the MFP via the web portal or an API. For these reasons, and because 
the proposed rule change does not raise any novel legal or regulatory 
issues, the Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the 30-day operative delay and 
designates the proposal operative upon filing.\14\
---------------------------------------------------------------------------

    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For 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).
---------------------------------------------------------------------------

    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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-EMERALD-2023-18 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-EMERALD-2023-18. 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

[[Page 51376]]

post all comments on the Commission's internet website (https://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 website 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 a.m. and 3 p.m. Copies of the 
filing also will be available for inspection and copying at the 
principal office of the Exchange. Do not include personal identifiable 
information in submissions; you should submit only information that you 
wish to make available publicly. We may redact in part or withhold 
entirely from publication submitted material that is obscene or subject 
to copyright protection. All submissions should refer to file number 
SR-EMERALD-2023-18 and should be submitted on or before August 24, 
2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-16503 Filed 8-2-23; 8:45 am]
BILLING CODE 8011-01-P