Document ID: SEC-2016-1493-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Miami International Securities Exchange, LLC
Posted Date: 2016-08-24T04:00Z

[Federal Register Volume 81, Number 164 (Wednesday, August 24, 2016)]
[Notices]
[Pages 57984-57985]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20206]

[[Page 57984]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78612; File No. SR-MIAX-2016-29]

Self-Regulatory Organizations; Miami International Securities 
Exchange LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Exchange Rules 803 and 1308

August 18, 2016.
    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 12, 2016, 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 Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend Exchange Rule 803, 
Audits; and Exchange Rule 1308, Supervision of Accounts, to adopt new 
Interpretations and Policies .01 to each existing rule regarding the 
submission of annual reports.
    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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Exchange Rule 803, Audits, to adopt 
new Interpretations and Policies .01 to state that Members must now 
file annual reports electronically with the Exchange by utilizing the 
system or software prescribed by the Exchange which will be announced 
via Regulatory Circular. Additionally, the Exchange proposes to amend 
Exchange Rule 1308, Supervision of Accounts, to adopt new 
Interpretations and Policies .01 to state that Members required to file 
an annual report under paragraph (g) of Rule 1308 must now file such 
report electronically with the Exchange by utilizing the system or 
software prescribed by the Exchange which will be announced via 
Regulatory Circular.
    The Exchange has a Regulatory Services Agreement (``RSA'') with the 
Financial Industry Regulatory Authority, Inc. (``FINRA''). FINRA 
provides its members, and the members of exchanges for which it 
provides regulatory services, access to its Firm Gateway system, which 
is a portal that provides consolidated access to various FINRA 
regulatory systems. As part of the RSA, FINRA will collect reports on 
behalf of the Exchange and provide a report to the Exchange indicating 
which Firms have submitted an annual audit report. Additionally, FINRA 
has a process in place to provide specific annual audit reports to the 
Exchange upon request.
    The FINRA Firm Gateway is available to Members \3\ of the Exchange 
for the submission of various regulatory filings, including certain 
filings such as the Annual Supervision Report and the Annual Audit 
Report. The Exchange intends to require Members that are required to 
submit these reports to the Exchange to submit them to FINRA through 
the Firm Gateway system and announce this to Members via Regulatory 
Circular as stated in the proposed amended rules.
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    \3\ The term ``Member'' means an individual organization 
approved to exercise trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
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    Therefore the Exchange proposes to adopt Interpretations and 
Policies .01 to Rule 803 to state that reports must be filed 
electronically with the Exchange utilizing the system or software 
prescribed by the Exchange. Additionally, the Exchange proposes to 
adopt Interpretations and Policies .01 to Rule 1308 to state that if a 
Member is required to file a report, that such report must be filed 
electronically with the Exchange utilizing the system or software 
prescribed by the Exchange.
    The Exchange believes that requiring Members to submit annual 
reports directly into the system of the Exchange's regulatory services 
provider will provide for a more efficient and effective process for 
the collection, tracking, consolidation, and review of Members' annual 
reports.
2. Statutory Basis
    MIAX believes that its proposed rule change is consistent with 
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 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. Additionally, the Exchange 
believes the proposed rule change is consistent with the Section 
6(b)(5) \6\ requirement that the rules of an exchange not be designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ Id.
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    In particular, the Exchange believes that the proposed rule change 
will create a more efficient and effective process for the Exchange's 
Members to submit annual reports to the Exchange, which fosters 
cooperation and coordination with FINRA in its performance of 
regulatory services with respect to the Exchange and Exchange Members. 
By enhancing the process through which the Exchange (through its 
regulatory services provider) receives annual reports, the Exchange 
believes the proposed rule changes will promote just and equitable 
principles of trade and ultimately protect investors. Additionally, 
upon implementation, all Members that are required to submit annual 
reports will be required to submit them in the same (and thus 
nondiscriminatory) electronic manner.
    Regulation of Members continues to be performed by electronic 
processes, and thus the Exchange believes it is appropriate to require 
electronic submission of these reports so that they may be incorporated 
into these processes. By maintaining the flexibility

[[Page 57985]]

within the rules for the Exchange to prescribe by Regulatory Circular 
which system or software will be used for the submission of annual 
reports, the Exchange believes it will be able to adjust, as necessary, 
the required manner of reporting by Members, particularly to the extent 
that new or enhanced software or systems are developed for this 
purpose.

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 
requires all Members that are required to submit annual reports to 
submit those reports electronically in the same manner.
    The Exchange believes the proposed rule change will not impose any 
burden on intra-market competition because it applies equally to all 
Exchange Members with reporting obligations.
    The Exchange does not believe that the proposed rule changes will 
impose any burden on intermarket competition as the proposed rule 
change is for regulatory purposes to enhance the process for Member's 
submission and the Exchange's collection, tracking, consolidation, and 
review of annual reports.
    The Exchange believes that the proposed change is not controversial 
and does not impose any significant burden on the Exchange's Members. 
All Exchange Members have access to the FINRA Firm Gateway system and 
there is no additional financial cost to file the required reports 
electronically through this system. Additionally, the majority of 
Members of the Exchange are also Members of FINRA and use the FINRA 
Firm Gateway system on a regular basis. Therefore, the Exchange 
believes that any burden that the proposed rule change may impose on 
Members will be minimal. The Exchange believes any burden is outweighed 
by the benefits of electronic filing, which include a more efficient 
and effective process for the Exchange (through its regulatory services 
provider) to collect, track, and consolidate annual reports. The 
Exchange believes that an electronic filing process is in its, and its 
Members', best interest.

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 \7\ and Rule 19b-4(f)(6) \8\ 
thereunder.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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-2016-29 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-2016-29. 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-MIAX-2016-29, and should be 
submitted on or before September 14, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20206 Filed 8-23-16; 8:45 am]
 BILLING CODE 8011-01-P