Document ID: SEC-2014-0945-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Miami International Securities Exchange, LLC
Posted Date: 2014-06-09T04:00Z

[Federal Register Volume 79, Number 110 (Monday, June 9, 2014)]
[Notices]
[Pages 33012-33017]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-13312]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72300; File No. SR-MIAX-2014-16]

Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend MIAX Exchange Rules To Harmonize the 
Language With Certain Rules of the Financial Industry Regulatory 
Authority, Inc. (``FINRA'') and Other Exchanges

June 3, 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 June 2, 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.
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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 the 
Substance of the Proposed Rule Change

    The Exchange is filing a proposal to amend its Rules to harmonize 
the language with certain rules of the Financial Industry Regulatory 
Authority, Inc. (``FINRA'') and other exchanges.
    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 amend certain Rules to harmonize the 
language with the rules of FINRA and other exchanges, and to make other 
conforming and technical changes. Specifically, the Exchange proposes: 
(i) To amend Rule 303, Prevention of the Misuse of Nonpublic 
Information, to adopt the language of the corresponding rule of another 
exchange; (ii) to amend Rule 315, Anti-Money Laundering Compliance 
Program, by adding text to paragraphs (c) and (d) which is identical to 
text found in FINRA Rule 3310; (iii) to amend Rule 319, to adopt the 
language of the corresponding rule of another exchange; (iv) to add a 
new Rule 320, Trading Ahead of Research Reports; (v) to amend Rule 610, 
Limitation on Dealings, to adopt the language of the corresponding rule 
of another exchange; (vi) to amend paragraphs (b) and (d) of Rule 800, 
Maintenance, Retention and Furnishing of Books, Records and Other 
Information; (vii) to amend Rule 1321, Transfer of Accounts, to 
incorporate by reference FINRA Rule 11870, Customer Account Transfer 
Contracts; (viii) to amend Rule 1322, Options Communications, to better 
align with FINRA Rule 2220; and (ix) to replace the rule text of Rule 
1325, Telephone Solicitation, with the rule text from FINRA Rule 3230. 
The Exchange anticipates entering into a 17d-2 Agreement with FINRA and 
possibly a Regulatory Service Agreement within the near future. The 
Exchange believes the proposed changes to harmonize the Exchange rules 
with FINRA and other exchanges (which also have such 17d-2 Agreements 
and Regulatory Service Agreement with FINRA) should expedite the 
process.

[[Page 33013]]

    The Exchange proposes to replace Rule 303, Prevention of the Misuse 
of Nonpublic Information, in its entirety with the language of the 
corresponding rule of another exchange.\3\ The new Rule will provide 
that each Member must establish, maintain and enforce written 
procedures reasonably designed, taking into consideration the nature of 
such Member's business, to prevent the misuse of material, non-public 
information by such Member or persons associated with such Member. 
Members for whom the Exchange is the Designated Examining Authority 
(``DEA'') that are required to file SEC form X-17A-5 with the Exchange 
on an annual or more frequent basis must file contemporaneously with 
the submission for the calendar year end ITSFEA compliance 
acknowledgements stating that the procedures mandated by this Rule have 
been established, enforced and maintained. In addition, any Member or 
associated person of a Member who becomes aware of a possible misuse of 
material, non-public information must notify the Exchange's Regulatory 
Department.
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    \3\ See Proposed Rule 303. See also BATS Rule 5.5.
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    Interpretations and Policies .01 to proposed Rule 303 provides that 
conduct which will be characterized as the misuse of material, non-
public information includes, but is not limited to, the following:
     Trading in any securities issued by a corporation, or in 
any related securities or related options or other derivative 
securities, while in possession of material, non-public information 
concerning that issuer; or
     Trading in a security or related options or other 
derivative securities, while in possession of material non-public 
information concerning imminent transactions in the security or related 
securities; or
     Disclosing to another person or entity any material, non-
public information involving a corporation whose shares are publicly 
traded or an imminent transaction in an underlying security or related 
securities for the purpose of facilitating the possible misuse of such 
material, non-public information.
    Interpretations and Policies .02 to proposed Rule 303 provides that 
at minimum each Member must establish, maintain, and enforce the 
following policies and procedures:
     All associated persons of the Member must be advised in 
writing of the prohibition against the misuse of material, non-public 
information; and
     All associated persons of the Member must sign 
attestations affirming their awareness of, and agreement to abide by 
the aforementioned prohibitions. These signed attestations must be 
maintained for at least three years, the first two years in an easily 
accessible place; and
     Each Member must receive and retain copies of trade 
confirmations and monthly account statements for each account in which 
an associated person: has a direct or indirect financial interest or 
makes investment decisions. The activity in such brokerage accounts 
should be reviewed at least quarterly by the Member for the purpose of 
detecting the possible misuse of material, non-public information; and
     All associated persons must disclose to the Member whether 
they, or any person in whose account they have a direct or indirect 
financial interest, or make investment decisions, are an officer, 
director or 10% shareholder in a company whose shares are publicly 
traded. Any transaction in the stock (or option thereon) of such 
company shall be reviewed to determine whether the transaction may have 
involved a misuse of material non-public information. Maintenance of 
the foregoing policies and procedures will not, in all cases, satisfy 
the requirements and intent of this Rule; the adequacy of each Member's 
policies and procedures will depend upon the nature of such Member's 
business.
    The Exchange believes that the proposed changes to the Prevention 
of the Misuse of Nonpublic Information Rule clarifies activity which it 
believes to be inconsistent with just and equitable principles of 
trade. Additionally, the Exchange believes the proposed changes will 
assist in the prevention of fraudulent and manipulative acts by 
providing an appropriate mechanism designed to ensure that material, 
non-public information continues to be protected while promoting the 
protecting of investors and the public interest.
    The Exchange proposes to amend Rule 315(c) to provide additional 
clarity and instruction to Members' regarding independent testing for 
compliance and to more closely align the language of the Rule with the 
corresponding FINRA Rule 3310.\4\ The proposed rule change will require 
``annual (on a calendar year basis)'' independent testing for 
compliance of the Member's anti-money laundering program, to be 
conducted by the Member's personnel or by a qualified outside party. 
Further, the proposed rule change will provide that testing be done on 
a periodic basis, ``every two years (on a calendar-year basis),'' if 
the Member does not execute transactions for customers or otherwise 
hold customer accounts or act as an introducing broker with respect to 
customer accounts. Finally, the proposed rule change clarifies that the 
individual responsible for implementing and monitoring the program must 
be an associated person of the Member. The Exchange believes the 
proposed changes to Rule 315(c) will more closely align the Rule with 
the corresponding FINRA Rule 3310, and creates a more concise rule 
which benefits investors and the public by establishing uniform and 
clearly defined time parameters for review. The Exchange proposes to 
amend Rule 315(d) to clarify that implementation and monitoring of a 
Member's Anti-Money Laundering Compliance Program be performed by an 
associated person of the Member. The proposed change to Rule 315(d) 
clarifies a Member's obligation for implementing and maintaining its 
program and more closely aligns to FINRA Rule 3310.
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    \4\ See Proposed Rule 315(c). See also FINRA Rule 3310.
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    The Exchange proposes to replace Rule 319, Proxy Voting, in its 
entirety with the language of the corresponding rule of another 
exchange, Forwarding of Proxy and Other Issuer-Related Materials; Proxy 
Voting.\5\ The new Rule will provide that a Member when so requested by 
an issuer and upon being furnished with: (1) Sufficient copies of proxy 
material, annual reports, information statements or other material 
required by law to be sent to security holders periodically, and (2) 
satisfactory assurance that it will be reimbursed by such issuer for 
all out-of-pocket expenses, including reasonable clerical expenses, 
shall transmit promptly to each beneficial owner of securities (or the 
beneficial owner's designated investment adviser) of such issuer which 
are in its possession and control and registered in a name other than 
the name of the beneficial owner all such material furnished. In the 
event of a proxy solicitation, such material shall include a signed 
proxy indicating the number of shares held for such beneficial owner 
and bearing a symbol identifying the proxy with proxy records 
maintained by the Member, and a letter informing the beneficial owner 
(or the beneficial owner's designated investment adviser) of the time 
limit and necessity for completing the proxy form and forwarding it to 
the person soliciting proxies prior to the expiration of the time limit 
in order for the shares to be represented at the meeting. In

[[Page 33014]]

addition, a Member shall furnish a copy of the symbols to the person 
soliciting the proxies and shall also retain a copy thereof pursuant to 
the provisions of Exchange Act Rule 17a-4. This paragraph shall not 
apply to beneficial owners residing outside of the United States of 
America though Members may voluntarily comply with the provisions 
hereof in respect of such persons if they so desire. Further, the new 
Rule provides that No Member shall give a proxy to vote stock that is 
registered in its name, unless: (i) Such Member is the beneficial owner 
of such stock; (ii) such proxy is given pursuant to the written 
instructions of the beneficial owner; or (iii) such proxy is given 
pursuant to the rules of any national securities exchange or 
association of which it is a member provided that the records of the 
Member clearly indicate the procedure it is following. In addition, 
notwithstanding the foregoing, a Member that is not the beneficial 
owner of a security registered under Section 12 of the Exchange Act is 
prohibited from granting a proxy to vote the security in connection 
with a shareholder vote on the election of a member of the board of 
directors of an issuer (except for a vote with respect to uncontested 
election of a member of the board of directors of any investment 
company registered under the Investment Company Act of 1940), executive 
compensation, or any other significant matter, as determined by the 
Commission, by rule, unless the beneficial owner of the security has 
instructed the Member to vote the proxy in accordance with the voting 
instructions of the beneficial owner. Notwithstanding the foregoing, a 
Member may give a proxy to vote any stock registered in its name if 
such Member holds such stock as executor, administrator, guardian, 
trustee, or in a similar representative or fiduciary capacity with 
authority to vote. A Member that has in its possession or within its 
control stock registered in the name of another Member and that desires 
to transmit signed proxies pursuant to the provisions of paragraph (a) 
of this proposed Rule 319, shall obtain the requisite number of signed 
proxies from such holder of record. Notwithstanding the foregoing: (1) 
Any Member designated by a named Employee Retirement Income Security 
Act of 1974 (as amended) (``ERISA'') Plan fiduciary as the investment 
manager of stock held as assets of the ERISA Plan may vote the proxies 
in accordance with the ERISA Plan fiduciary responsibilities if the 
ERISA Plan expressly grants discretion to the investment manager to 
manage, acquire, or dispose of any plan asset and has not expressly 
reserved the proxy voting right for the named ERISA Plan fiduciary; and 
(2) any designated investment adviser may vote such proxies.
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    \5\ See Proposed Rule 319. See also BATS Rule 13.3.
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    Interpretations and Policies .01 to proposed Rule 319 provides that 
for purposes of this Rule, the term ``designated investment adviser'' 
is a person registered under the Investment Advisers Act of 1940, or 
registered as an investment adviser under the laws of a state, who 
exercises investment discretion pursuant to an advisory contract for 
the beneficial owner and is designated in writing by the beneficial 
owner to receive proxy and related materials and vote the proxy, and to 
receive annual reports and other material sent to security holders. For 
purposes of this Rule, the term ``state'' shall have the meaning given 
to such term in Section 202(a)(19) of the Investment Advisers Act (as 
the same may be amended from time to time). The written designation 
must be signed by the beneficial owner; be addressed to the Member; and 
include the name of the designated investment adviser. Members that 
receive such a written designation from a beneficial owner must ensure 
that the designated investment adviser is registered with the SEC 
pursuant to the Investment Advisers Act, or with a state as an 
investment adviser under the laws of such state, and that the 
investment adviser is exercising investment discretion over the 
customer's account pursuant to an advisory contract to vote proxies 
and/or to receive proxy soliciting material, annual reports and other 
material. Members must keep records substantiating this information. 
Beneficial owners have an unqualified right at any time to rescind 
designation of the investment adviser to receive materials and to vote 
proxies. The rescission must be in writing and submitted to the Member. 
The Exchange believes that the proposed changes to the proxy voting 
Rule will provide a clearer framework for Members to handle proxy 
related materials in a manner that is designed to prevent fraudulent 
and manipulative acts and practices, and to promote the protection of 
investors and the public interest. The Exchange notes that the proposed 
changes will also bring the Exchange's Rule more closely aligned with 
that of FINRA.\6\
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    \6\ See FINRA Rule 2251.
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    The Exchange proposes to add Rule 320, to incorporate the language 
of FINRA Rule 5280, Trading Ahead of Research Reports.\7\ The proposed 
Rule 320 contains two provisions, paragraph (a) and (b), pertaining to 
trading and research reports. Paragraph (a) stipulates that a Member 
may not change its position in a security based upon non-public advance 
knowledge of information contained in a research report. Specifically, 
no Member shall establish, increase, decrease or liquidate an inventory 
position in a security or a derivative of such security based on non-
public advance knowledge of the content or timing of a research report 
in that security. Paragraph (b) stipulates that a Member must establish 
and enforce policies and procedures which are designed to restrict the 
flow of information between research department personnel and trading 
department personnel. Specifically, Members must establish, maintain 
and enforce policies and procedures reasonably designed to restrict or 
limit the information flow between research department personnel, or 
other persons with knowledge of the content or timing of a research 
report, and trading department personnel, so as to prevent trading 
department personnel from utilizing non-public advance knowledge of the 
issuance or content of a research report for the benefit of the Member 
or any other person. The Exchange believes the addition of Rule 320 
benefits investors and the public by establishing specific parameters 
concerning a Members' trading activity in a security and the timing of 
Research Reports related to that security. The Exchange also believes 
that adopting the language of FINRA helps to ensure that Members have 
the same obligations to comply under the Exchange Rules as they do 
under FINRA rules.\8\
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    \7\ See Proposed Rule 320. See also FINRA Rule 5280.
    \8\ The Exchange intends that MIAX Rule 320 be interpreted and 
applied in the same manner as FINRA interprets and applies FINRA 
Rule 5280, including the application of any associated Notice to 
Members, or rules, that FINRA uses to interpret FINRA Rule 5280. See 
Rule 200(c)(7). MIAX Rule 200(c)(7) provides that, ``[e]very 
Applicant must have and maintain membership in another registered 
options exchange (that is not registered solely under Section 6(g) 
of the Exchange Act). If such other registered options exchange has 
not been designated by the Commission, pursuant to Rule 17d-1 under 
the Exchange Act, to examine Members for compliance with financial 
responsibility rules, then such Applicant must have and maintain a 
membership in FINRA.''
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    The Exchange proposes to replace Rule 610, Limitations on Dealings, 
in its entirety with the language of the corresponding rule of another 
exchange.\9\ The new Rule will provide that no Member, other than a 
Market

[[Page 33015]]

Maker acting pursuant to Rule 603, limited partner, officer, employee, 
approved person(s) approved [sic], who is affiliated with a Market 
Maker or Member, shall, during the period of such affiliation, purchase 
or sell any option in which such Market Maker is appointed for any 
account in which such person(s) has a direct or indirect interest. Any 
such person(s) may, however, reduce or liquidate an existing position 
in an option in which such Market Maker is appointed provided that such 
orders are (i) identified as being for an account in which such 
person(s) has a direct or indirect interest; (ii) approved for 
execution by an Exchange Official; and (iii) executed by the Market 
Maker in a manner reasonably calculated to contribute to the 
maintenance of price continuity with reasonable depth. No order entered 
pursuant to Rule 610(a) shall be given priority over, or parity with, 
any order represented in the market at the same price. Notwithstanding 
the provisions of Rule 603, an approved person or Member that is 
affiliated with a Market Maker shall not be subject to Rule 610(a), 
provided it has obtained Exchange approval of procedures restricting 
the flow of material non-public corporate or market information between 
itself and the Market Maker and any Member, officer, or employee 
associated therewith. For such Member that controls, is controlled by, 
or is under common control with another organization, the exemption 
provided in Subsection (b) of Rule 610 shall be available to it only 
where the Exchange has determined that the relationship between the 
Market Maker, each person associated therewith, and such other 
organization satisfies all the conditions specified in the Exemption 
Guidelines. In addition, the following restrictions apply to a Member 
that is affiliated with a Market Maker. The Member may not: Purchase or 
sell for any account in which it has a direct or indirect interest in 
any security in which its affiliate is a Market Maker; engage in any 
business transaction with the issuer of a security or its insiders in 
which its affiliate is a Market Maker; or accept orders directly from 
the issuer, its insiders or certain designated parties in securities in 
which its affiliate is a Market Maker.
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    \9\ See Proposed Rule 610. See also NYSE Arca Rule 6.83; NYSE 
MKT Rule 927.3NY.
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    Further, the Exchange proposes Exemption Guidelines which provides 
a means by which an affiliated firm doing business with the public as 
defined in Rule 203 (hereafter ``Member'') may obtain an exemption from 
the restrictions discussed in Rule 610 above. This exemption is only 
available to a Member that obtains prior Exchange approval for 
procedures restricting the flow of material non-public information 
between it and its affiliated Market Maker, (i.e., so-called ``Chinese 
Wall'' procedures). The Exemption Guideline subsection sets forth the 
steps a Member must undertake, at a minimum, to seek to qualify for 
exemptive relief. Any firm that does not obtain Exchange approval for 
its procedures in accordance with these Guidelines shall remain subject 
to the restrictions set forth in Rule 610 described above.
    The Exchange believes that the proposed changes to the information 
barrier rule clarify activity which it believes to be inconsistent with 
just and equitable principles of trade. The Exchange believes that the 
proposed information barrier rule is more precise and prescriptive than 
the current rule regarding which activities are prohibitive and what 
constitutes an adequate information barrier between Market Makers and 
affiliated order flow providers. The proposed rule also contains a 
detailed exemptive relief section that is absent from the current rule. 
The Exchange notes that under the proposal the Exchange will still 
require the maintaining of information barriers between Members and any 
affiliated Market Makers to the same extent as the current rule. The 
Exchange believes the proposed changes will assist in the prevention of 
fraudulent and manipulative acts by providing an appropriate mechanism 
designed to ensure that there are sufficient information barriers 
between Market Makers and affiliated order flow providers while 
promoting the protecting of investors and the public interest. The 
Exchange believes that the proposed rule will provide detailed 
guidelines and protections in a manner that is easily understood and 
enforced by not only Members, but also FINRA, with whom the Exchange 
anticipates entering in a17d-2 Agreement and possibly a Regulatory 
Service Agreement with in the near future.
    The Exchange proposes to amend Rule 800, Maintenance, Retention and 
Furnishing of Books, Records and Other Information, to include rule 
text from the related FINRA Rule 4511, General Requirements.\10\ The 
Exchange proposes to add paragraph (b) to its rule, specifying that 
each Member shall preserve for a period of at least six years those 
books and records for which there is no specified period under Exchange 
Rules or applicable Exchange Act rules. The Exchange also proposes to 
add paragraph (d) to its rule, specifying that all books and records 
required to be made pursuant to the Exchange Rules shall be preserved 
in a format and media that complies with Exchange Act Rule 17a-4. The 
Exchange believes that adding additional detail to its Rule is 
appropriate as it will harmonize the Exchange's Rule with the related 
FINRA rule, which is designed to protect investors and the public 
interest.
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    \10\ See Proposed Rule 800. See also FINRA Rule 4511.
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    The Exchange proposes to amend Rule 1321, Transfer of Accounts, to 
incorporate FINRA Rule 11870 by reference into its rules so that 
Members have the same obligations to comply as if such rules and 
interpretations were part of the Exchange's rules.\11\ FINRA Rule 11870 
provides a comprehensive articulation of procedures to be followed when 
transferring a customer account. The FINRA Rule establishes the 
protocol and procedures for initiating a transfer, validating the 
transfer instructions, and handling fails. Incorporating by reference 
the FINRA rule ensures that Members have the same obligations to comply 
as if such rules and interpretations were part of the Exchange's Rules.
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    \11\ See Proposed Rule 1321. See also FINRA Rule 11870. In the 
event FINRA updates its Rule 11870, Customer Account Transfer 
Contracts, MIAX will file a 19b-4 Rule filing to adopt any 
corresponding changes to its Rule 1321 to ensure it remains 
consistent with FINRA Rule 11870.
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    The Exchange proposes to amend Rule 1322, Options Communications, 
to conform with the corresponding FINRA Rule 2220, Options 
Communications.\12\ The current rule requires each Member to establish 
appropriate written procedures for review by a Registered Options 
Principal of institutional communications used by the Member. The 
Exchange proposes to add a paragraph to section (a) Definitions, to 
conform the Exchange Rule text to FINRA by including the definition of 
an institutional investor in paragraph (a)(4) and an Institutional 
Investor in paragraph (a)(5). The Exchange proposes to update the text 
of paragraph (b)(3) Institutional Communications, to clarify that 
procedures for Institutional Communications be designed to ensure that 
those communications comply with applicable standards. Further, when 
procedures do not require review, the procedures must include a 
provision for the duration and training of associated persons as to the 
firm's procedures concerning institutional communications. In addition, 
evidence that these supervisory procedures have been implemented and 
carried out must be maintained and made available to the Exchange upon 
request. The Exchange

[[Page 33016]]

proposes to make conforming and technical changes to Exchange Rule 1322 
to align to FINRA Rule 2220.
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    \12\ See Proposed Rule 1322. See also FINRA Rule 2220.
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    The Exchange proposes to amend Rule 1325, Telephone Solicitation, 
to adopt the language of the corresponding FINRA Rule 3230, 
Telemarketing.\13\ The FINRA rule text provides detailed guidance 
concerning telemarketing activities. The Exchange believes that the 
proposed changes are appropriate as they will harmonize the Exchange's 
Rules with FINRA rules with respect to account transfers and Exchange 
Members' communication with the public. The Exchange's proposed changes 
are designed to further cooperation and coordination with persons 
engaged in regulating, clearing, settling, processing information with 
respect to, and facilitating transactions in securities. Additionally, 
the Exchange believes that the proposed changes serve to further 
protect investors and the public interest by providing detailed 
guidance concerning telemarking [sic].
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    \13\ See Proposed Rule 1325. See also FINRA Rule 3230.
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2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) \14\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) \15\ 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.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes the proposed rule changes will 
provide greater clarity to Members and the public regarding the 
Exchange's Rules. The Exchange believes that the new nonpublic 
information rule should assist in the prevention of fraudulent and 
manipulative acts by providing an appropriate mechanism designed to 
ensure that material, non-public information continues to be protected 
while promoting the protecting of investors and the public interest. In 
addition, the Exchange believes that the proposed rule changes will 
help ensure that investors are protected from potentially false or 
misleading communications with the public distributed by Exchange 
Members. The Exchange believes that the new proxy voting Rule will 
provide a clearer framework for Members to handle proxy related 
materials in a manner that is designed to prevent fraudulent and 
manipulative acts and practices, and to promote the protection of 
investors and the public interest. The Exchange believes that the new 
information barrier rule should assist in the prevention of fraudulent 
and manipulative acts by providing an appropriate mechanism designed to 
ensure that there are sufficient information barriers between Market 
Makers and affiliated order flow providers while promoting the 
protecting of investors and the public interest. Further, the proposed 
rule changes provide greater harmonization between Exchange Rules and 
FINRA Rules of similar substance and purpose, resulting in less 
burdensome and more efficient regulatory compliance for dual members. 
As previously noted, the proposed rule text is substantially similar to 
FINRA's current rule text, which has already been approved by the 
Commission. As such, the proposed rule change will foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities and will remove impediments to and perfect the mechanism of 
a free and open market and a national market system.

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. The proposed rule change is not 
designed to address any competitive issues but rather is designed to 
provide greater harmonization between Exchange and FINRA rules of 
similar purpose, resulting in less burdensome and more efficient 
regulatory compliance for dual members.

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 \16\ and Rule 19b-4(f)(6) \17\ 
thereunder.
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 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-MIAX-2014-16 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-MIAX-2014-16. 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

[[Page 33017]]

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-2014-16, and should be 
submitted on or before June 30, 2014.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13312 Filed 6-6-14; 8:45 am]
BILLING CODE 8011-01-P