Document ID: SEC-2017-0177-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX PEARL, LLC
Posted Date: 2017-02-07T05:00Z

[Federal Register Volume 82, Number 24 (Tuesday, February 7, 2017)]
[Notices]
[Pages 9617-9619]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-02441]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79913; File No. SR-PEARL-2017-01]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Establish MIAX 
PEARL Top of Market (``ToM'') and MIAX PEARL Liquidity Feed (``PLF'') 
Data Products

February 1, 2017.
    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 January 19, 2017, MIAX PEARL, LLC (``MIAX PEARL'' 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 establish certain market data 
products. The text of the proposed rule change is available on the 
Exchange's Web site at http://www.miaxoptions.com/rule-filings/pearl, 
at MIAX PEARL's principal office, and at the Commission's Public 
Reference Room.

[[Page 9618]]

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 establish the MIAX PEARL Top of Market 
(``ToM'') and MIAX PEARL Liquidity Feed (``PLF'') data products.
    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 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 Reporting Authority 
(``OPRA''). The ToM and OPRA data leave the MIAX PEARL System \3\ 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. ToM will also 
contain a feature that provides the number of Priority Customer \4\ 
contracts that are included in the size associated with the Exchange's 
best bid and offer.
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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.
    \4\ The term ``Priority Customer'' means a person or entity that 
(i) is not a broker or dealer insecurities, and (ii) does not place 
more than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s). See Exchange Rule 
100.
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    PLF is a real-time full order book data feed that provides 
information for orders on the MIAX PEARL order book. PLF will provide 
real-time information to enable users to keep track of the simple order 
book for all symbols listed on MIAX PEARL. PLF will provide the 
following real-time data to its users with respect to each order for 
the entire order book: Origin, limit price, side, size, and time-in-
force (e.g., day, GTC). It is a compilation of data for orders residing 
on the Exchange's order book for options traded on the Exchange that 
the Exchange provides through a real-time multi-cast data feed. The 
Exchange updates the information upon receipt of each order or change 
in status to any order resting on the book (e.g., routing, trading, or 
cancelling of the order).
    PLF will provide subscribers with specific order book data that 
should enhance their ability to analyze market conditions, and to 
create and test trading models and analytical strategies. The Exchange 
believes the PLF is a valuable tool that subscribers can use to gain 
comprehensive insight into the limit order book in a particular option.
    The proposed data products provide valuable information that can 
help subscribers make informed investment decisions, and operate in the 
same manner as similar data products offered by the Miami International 
Securities Exchange, LLC (``MIAX Options''), namely the MIAX Options 
Top of Market data product (``MIAX ToM'') \5\ and the MIAX Options 
Order Feed data product (``MOR'').\6\ Each of these proposed data 
products is available to members and non-members, and to both 
professional and non-professional subscribers.
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    \5\ For a complete description of the MIAX Options ToM data 
product, see Securities Exchange Act Release No. 69007 (February 28, 
2013), 78 FR 14617 (March 6, 2013) (SR-MIAX-2013-05); Securities 
Exchange Act Release No. 69518 (May 6, 2013), 78 FR 27462 (May 10, 
2013) (SR-MIAX-2013-18); Securities Exchange Act Release No. 73395 
(October 21, 2014), 79 FR 63979 (October 27, 2014) (SR-MIAX-2014-
53).
    \6\ For a complete description of the MOR data product, see 
Securities Exchange Act Release No. 74759 (April 17, 2015), 80 FR 
22749 (April 23, 2015) (SR-MIAX-2015-28).
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    The Exchange represents that it will make ToM and PLF equally 
available to any market participant that wishes to subscribe to it. The 
Exchange will establish monthly fees for the ToM data product and the 
PLF data product by way of separate proposed rule changes, which the 
Exchange will submit after the ToM and PLF products are established.
2. Statutory Basis
    MIAX PEARL believes that its proposed rule change is consistent 
with Section 6(b) of the Act \7\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \8\ 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    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 includes the Exchange's best bid and offer, with 
aggregate size, and last sale information, based on order and quoting 
interest on the Exchange that should enable them to make informed 
decisions on trading on MIAX PEARL by using the ToM data to assess 
current market conditions that directly affect such decisions.
    The PLF market data product is designed to promote just and 
equitable principles of trade by providing all subscribers with limit 
order book data that should enable them to make informed decisions on 
trading MIAX PEARL options by using the PLF data to assess current 
market conditions that directly affect such decisions.
    The proposed ToM and PLF market data products facilitate 
transactions in securities, remove impediments to and perfect the 
mechanisms of a free and open market and a national market system by 
enhancing the subscriber's ability to make decisions on trading 
strategy and by providing data which should help bring about such 
decisions in a timely manner to the protection of investors and the 
public interest. The market data provided by both ToM and PLF 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 
PEARL market more transparent and accessible to market participants 
making routing decisions concerning their options orders. The Exchange 
notes that the data provided on each of these data products are similar 
to and provide the same data as provided by data products of MIAX 
Options with respect to options traded on that exchange.\9\ The 
Exchange believes that it is in the public interest to make similar 
information available with respect to options traded on MIAX PEARL.
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    \9\ See supra notes 5 and 6.
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    The proposed ToM and PLF market data products are also designated 
to protect investors and the public interest by providing data to 
subscribers that is already currently available on other

[[Page 9619]]

competing exchanges which are similar to MIAX PEARL \10\ and will 
enable MIAX PEARL 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.
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    \10\ ISE Gemini, LLC (``Gemini'') is a maker-taker pricing model 
exchange similar to MIAX PEARL and has similar data products to ToM 
and PLF available to Gemini's users, including the ISE Gemini TOP 
Quote and ISE Gemini Order Feed. See ISE Gemini Fee Schedule 
Sections V.A (ISE Gemini Order Feed) and V.B (ISE Gemini TOP Quote); 
see Securities Exchange Act Release No. 71087 (December 17, 2013), 
78 FR 77545 (December 23, 2013) (SR-Topaz-2013-17).
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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. On the contrary, the 
Exchange believes that the new market data products will enhance 
competition in the U.S. options markets by providing users of MIAX 
PEARL market data products that are similar to that which are currently 
provided on other competing options exchanges.\11\
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    \11\ Id.
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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.
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    \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.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Exchange has noted that waiving the operative delay would 
enable the Exchange to make the ToM and PLF market data products 
available to subscribers at the time of the launch of trading on the 
Exchange, which is scheduled for February 6, 2017. The Exchange has 
further argued that this would enable the Exchange to better compete 
with other exchanges by offering market participants additional data in 
order to seek the market center with the best prices and the most 
liquidity on which to execute their transactions. The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest, because such waiver 
will enable the Exchange to begin offering these data products at the 
time of the launch of trading on the Exchange. In addition, as noted by 
the Exchange, the proposal is consistent with the rules of other self-
regulatory organizations previously approved by the Commission.\14\ For 
these reasons, the Commission designates the proposed rule change as 
operative upon filing.\15\
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    \14\ See supra notes 5 and 6.
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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-PEARL-2017-01 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-PEARL-2017-01. 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-PEARL-2017-01 and should be 
submitted on or before February 28, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02441 Filed 2-6-17; 8:45 am]
 BILLING CODE 8011-01-P