Document ID: SEC-2019-1289-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX Emerald, LLC
Posted Date: 2019-09-10T04:00Z

[Federal Register Volume 84, Number 175 (Tuesday, September 10, 2019)]
[Notices]
[Pages 47608-47610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19466]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86864; File No. SR-EMERALD-2019-32]

Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Exchange Rule 519, MIAX Emerald Order Monitor

September 4, 2019.
    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 August 30, 2019, MIAX Emerald, LLC (``MIAX 
Emerald'' 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend Exchange Rule 519, MIAX 
Emerald Order Monitor.
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings/emerald at MIAX 
Emerald'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 Exchange Rule 519, MIAX Emerald 
Order Monitor, to remove a term in the Exchange's rule which creates an 
ambiguity concerning the application of the rule. Specifically, 
subsection (4) of paragraph (a), Limit Orders to Sell, provides that 
``[f]or options with a National Best Bid (``NBB'') equal to or greater 
than $0.25 the System \3\ will reject an incoming limit order that has 
a limit price equal to or less than the NBB by the lesser of (i) $2.50, 
or (ii) 50% of the NBB price.'' The second provision of the rule 
provides that, ``[f]or options with an NBB of $0.25 or less the System 
will accept any incoming limit order.''
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    \3\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
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    The statements an NBB ``equal to or greater than $0.25'' and ``an 
NBB of $0.25 or less'' both contemplate the NBB being equal to $0.25. 
The operation of the rule requires a bifurcation at $0.25 and only one 
action (accepting or rejecting an incoming order) can occur when the 
NBB is equal to $0.25. The desired behavior by the Exchange, for limit 
orders to sell, is to accept an order at any price when the NBB is 
equal to $0.25 or less. Therefore the Exchange proposes to remove the 
phrase ``equal to or'' from the first sentence in the rule.
    The new proposed rule text will provide that, ``[f]or options with 
a National Best Bid (``NBB'') greater than $0.25 the System will reject 
an incoming limit order that has a limit price equal to or less than 
the NBB by the lesser of (i) $2.50, or (ii) 50% of the NBB price. For 
options with an NBB of $0.25 or less the System will accept any 
incoming limit order.
    The Exchange believes its proposed change provides additional 
detail and clarity to the Exchange's rule and eliminates any 
inadvertent ambiguity in the rule text concerning order protections for 
incoming limit orders to sell.
2. Statutory Basis
    MIAX Emerald believes that its proposed rule change is consistent 
with

[[Page 47609]]

Section 6(b) of the Act \4\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act \5\ 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 regulating, clearing, settling, 
processing information with respect to, and 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.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes its proposal promotes just and equitable 
principles of trade, removes impediments to and perfects the mechanisms 
of a free and open market and a national market system, and in general, 
protects investors and the public interest by providing clarity and 
precision in the Exchange's rule text.
    The Exchange believes that the proposed change to the rule text 
provides further clarification to Members,\6\ investors, and the 
public, regarding the Exchange's handling of limit orders to sell. The 
Exchange believes it is in the interest of investors and the public to 
accurately describe the behavior of the Exchange's System in its rules 
as this information may be used by investors to make decisions 
concerning the submission of their orders. Transparency and clarity are 
consistent with the Act because it removes impediments to and helps 
perfect the mechanism of a free and open market and a national market 
system, and, in general, protects investors and the public interest by 
accurately describing the behavior of the Exchange's System.
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    \6\ The term ``Member'' means an individual or organization 
approved to exercise the trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
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    The Exchange believes that the proposed change promotes just and 
equitable principles of trade and removes impediments to and perfects 
the mechanism of a free and open market and a national market system 
and, in general, protects investors and the public interest by 
providing additional detail and clarity in the Exchange's rules. 
Further, the Exchange's proposal provides transparency and clarity in 
the rule and is consistent with the Act because it removes impediments 
to and helps perfect the mechanism of a free and open market and a 
national market system, and, in general, protects investors and the 
public interest by accurately describing the behavior of the Exchange's 
System. In particular, the Exchange believes that the proposed rule 
change will provide greater clarity to Members and the public regarding 
the Exchange's Rules, and it is in the public interest for rules to be 
accurate and concise so as to eliminate the potential for confusion.

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 rule change is 
designed to remove an unintentional ambiguity introduced in a recent 
rule change.\7\
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    \7\ See Securities Exchange Release No. 85164 (February 19, 
2019), 84 FR 6036 (February 25, 2019) (SR-EMERALD-2019-03).
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    The Exchange does not believe that the proposed rule change will 
impose any burden on inter-market competition as the Rules apply 
equally to all Exchange Members. The proposed rule change is not a 
competitive filing and is intended to improve the clarity and precision 
of the Exchange's rule text.

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 \8\ and Rule 19b-4(f)(6) \9\ 
thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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.
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    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- EMERALD-2019-32 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-2019-32. 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 website (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 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 10:00 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-EMERALD-2019-32 and

[[Page 47610]]

should be submitted on or before October 1, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-19466 Filed 9-9-19; 8:45 am]
 BILLING CODE 8011-01-P