Document ID: SEC-2019-0277-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX Emerald, LLC
Posted Date: 2019-03-13T04:00Z

[Federal Register Volume 84, Number 49 (Wednesday, March 13, 2019)]
[Notices]
[Pages 9190-9192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04556]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85266; File No. SR-EMERALD-2019-07]

Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Exchange Rule 203, Qualification and Registration of Members and 
Associated Persons

March 7, 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 February 22, 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 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.
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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 203, 
Qualification and Registration of Members and Associated Persons, in 
order to harmonize its rule to the rule of the Exchange's affiliate, 
Miami International Securities Exchange, LLC (``MIAX Options'').
    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
    MIAX Emerald proposes to amend MIAX Emerald Rule 203, Qualification 
and Registration of Members and Associated Persons, in order to 
harmonize its rule to the rule of the Exchange's affiliate, MIAX 
Options.
Background
    MIAX Emerald plans to commence operations as a national securities 
exchange registered under Section 6 of the Act \3\ on March 1, 2019. As 
described more fully in MIAX Emerald's Form 1 application,\4\ the 
Exchange is an affiliate of MIAX Options and MIAX PEARL, LLC (``MIAX 
PEARL''). MIAX Emerald Rules, in their current form, were filed as 
Exhibit B to its Form 1 on August 16, 2018, and at that time, the above 
mentioned MIAX Emerald Rule 203 was substantially similar to the 
corresponding rule of MIAX Options. In the time between when the 
Exchange filed its Form 1 and the time the Exchange received its 
approval order,\5\ MIAX Options made changes to its rules. In order to 
ensure consistent operation of both MIAX Emerald and MIAX Options 
through application of consistent rules, the Exchange proposes to amend 
MIAX Emerald Rule 203, as described below.
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    \3\ 15 U.S.C. 78f.
    \4\ See Securities Exchange Act Release No. 84891(December 20, 
2018), 83 FR 67421 (December 28, 2018) (File No. 10-233) (order 
approving application of MIAX EMERALD, LLC for registration as a 
national securities exchange.)
    \5\ Id.
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Proposal
    The Exchange proposes to amend MIAX Emerald Rule 203, Qualification 
and Registration of Members and Associated Persons, to harmonize its 
rule with recent rule changes adopted by MIAX Options.\6\
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    \6\ See Securities Exchange Act Release No. 84361 (October 4, 
2018), 83 FR 51529 (October 11, 2018) (SR-MIAX-2018-26); see also 
Securities Exchange Act Release No. 81098 (July 7, 2017), 82 FR 
32419 (July 13, 2017) (Order Approving File No. SR-FINRA-2017-007).
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    The Securities and Exchange Commission (the ``SEC'' or the 
``Commission'') approved a rule change to restructure the Financial 
Industry Regulatory Authority (``FINRA'') representative-level 
qualification examination program.\7\ The rule change, which became 
effective on October 1, 2018, restructured the examination program into 
a more efficient format whereby all new representative-level applicants 
are required to take a general knowledge examination (the Securities 
Industry Essentials Examination (``SIE'')) and a tailored, specialized 
knowledge examination (a revised representative-level qualification 
examination) for their particular registered role. Individuals are not 
required to be associated with the Exchange or any other self-
regulatory organization (``SRO'') member to be eligible to take the 
SIE. However, passing the SIE alone will not qualify an individual for 
registration with the Exchange. To be eligible for registration with 
the Exchange, an individual must also be associated with a firm, pass 
an appropriate qualification examination for a representative or 
principal and satisfy the other requirements relating to the 
registration process.
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    \7\ Id.
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    The Exchange also proposes to add Interpretations and Policies .09 
to Rule 203 ``Summary of Qualifications Requirements'' which summarizes 
the qualification requirements for each of the required registration 
categories described in the Exchange Rules.
2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \8\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \9\ 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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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change will improve 
the efficiency of the Exchange's examination requirements, without 
compromising the qualification standards, by eliminating duplicative 
testing of general securities knowledge on examinations. FINRA has 
indicated that the SIE was developed in an effort to adopt an 
examination that would assess basic product knowledge; the structure 
and function of the securities industry markets, regulatory agencies 
and their functions; and regulated and

[[Page 9191]]

prohibited practices. The Exchange also notes that the introduction of 
the SIE and expansion of the pool of individuals who are eligible to 
take the SIE, has the potential of enhancing the pool of prospective 
securities industry professionals by introducing them to securities 
laws, rules and regulations and appropriate conduct before they join 
the industry in a registered capacity. Lastly, the Exchange notes 
adopting the SIE requirement is consistent with the requirement 
recently adopted by MIAX Options.\10\
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    \10\ See supra note 6.
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    Furthermore, the Exchange believes that adding Interpretations and 
Policies .09 to Rule 203 will provide greater clarity regarding the 
Exchange's examination requirements as updated by, and those remaining 
in effect following, the proposed rule change, and consistency with the 
rules of other exchanges.\11\
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    \11\ See e.g. Cboe Exchange, Inc. Rule 3.6A Interpretations and 
Policies .08(b) and MIAX Options Rule 203, Qualification and 
Registration of Members and Associated Persons, Interpretations and 
Policies .09.
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    Additionally, the Exchange believes that although MIAX Emerald 
rules may, in certain instances, intentionally differ from MIAX Options 
rules, the proposed rule change will promote uniformity with MIAX 
Options with respect to rules that are intended to be identical. The 
Exchange believes that it will reduce the potential for confusion by 
its members that are also members of MIAX Options with respect to rules 
that are intended to be identical.

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 Exchange believes that 
the proposed rule change, which harmonizes its rules with similar 
filings by the other national securities exchanges,\12\ will reduce the 
regulatory burden placed on market participants engaged in trading 
activities across different markets. The Exchange believes that the 
harmonization of these registration requirements across the various 
markets will reduce burdens on competition by removing impediments to 
participation in the national market system and promoting competition 
among participants across the multiple national securities exchanges.
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    \12\ 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 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 from the date on which it was filed, or such shorter time as the 
Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice the 
Exchange's 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\16\ 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 proposal 
may become operative immediately upon filing. The Exchange states that 
such waiver will help reduce potential confusion by having consistent 
registration requirement rules across its affiliated exchanges which 
will, among other things, help protect investors. Additionally, the 
Exchange states the proposed rule change will create a more efficient 
examination program which, among other things, is in the public 
interest. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest because it will allow MIAX Emerald to harmonize its 
registration rules with the MIAX Options rules such that members will 
be subject to the same requirements, which are consistent across the 
industry and, therefore, the Commission designates the proposed rule 
change to be operative upon filing.\17\
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ 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).
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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-2019-07 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-2019-07. 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

[[Page 9192]]

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 submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-EMERALD-2019-07 and should be submitted 
on or before April 3, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-04556 Filed 3-12-19; 8:45 am]
 BILLING CODE 8011-01-P