Document ID: SEC-2020-1831-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX Emerald, LLC
Posted Date: 2020-11-17T05:00Z

[Federal Register Volume 85, Number 222 (Tuesday, November 17, 2020)]
[Notices]
[Pages 73315-73317]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25266]

[[Page 73315]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90393; File No. SR-EMERALD-2020-14]

Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Exchange's Certificate of Formation, Amended and Restated Limited 
Liability Company Agreement, and the By-Laws

November 10, 2020.
    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 October 28, 2020, 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 proposes to amend the Exchange's Certificate of 
Formation (the ``Certificate of Formation''), Amended and Restated 
Limited Liability Company Agreement (the ``LLC Agreement''), and the 
By-Laws (the ``By-Laws'').
    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
Changes to the Certificate of Formation
    The Exchange proposes to amend the Certificate of Formation to make 
several non-substantive, administrative and clarifying changes. The 
Exchange first proposes to amend the title of the document in order to 
accurately reflect the amended document title as the ``Amended and 
Restated Certificate of Formation of MIAX Emerald, LLC,'' in accordance 
with the proposed amendments described below.
    On January 30, 2018, the Exchange executed the original Certificate 
of Formation. The Exchange proposes delete the entire sentence in the 
first paragraph and insert a sentence to clarify that the Certificate 
of Formation has been executed in accordance with Section 18-208 of the 
Limited Liability Company Act, and that this document is being amended 
to restate the original Certificate of Formation. With the proposed 
changes, the first paragraph of the Certificate of Formation will be as 
follows:

    This filing has been executed and filed in accordance with 
Section 18-208 of the Limited Liability Company Act. This document 
is being executed for the purpose of amending and restating the 
original Certificate of Formation, filed on January 30, 2018, under 
file number: 6528291.

    The Exchange also proposes to amend the signature line for the 
Certificate of Formation by deleting the current signature line and 
inserting, as the signatory, ``Barbara J. Comly, EVP, General Counsel & 
Corporate Secretary.''
    The purpose of the proposed changes to the Certificate of Formation 
are to ensure that the Exchange's Certificate of Formation accurately 
reflects correct, current information, including the name of the 
amended document, in order to reduce potential investor or market 
participant confusion.
Changes to the LLC Agreement
    The Exchange proposes to amend the LLC Agreement to make several 
non-substantive, administrative and clarifying changes. On February 1, 
2018, the Exchange executed the original Limited Liability Company 
Agreement (the ``original LLC Agreement''). On December 21, 2018, the 
Exchange executed the Amended and Restated Limited Liability Company 
Agreement (the ``Amended LLC Agreement''), which restated the original 
LLC Agreement. The first paragraph of the LLC Agreement also refers to 
the document as the ``Operating Agreement.'' \3\ The Exchange now 
proposes to amend the first paragraph of the LLC Agreement to reflect 
the current amended document, which will be the ``Second Amended and 
Restated Limited Liability Company Agreement'' (the ``Second LLC 
Agreement''). Accordingly, the Exchange proposes to update the text in 
the first paragraph of the LLC Agreement to reflect this change, 
thereby deleting reference to the name and date of the original LLC 
Agreement, and inserting the name and date of the Amended LLC Agreement 
as being amended and restated by the Second LLC Agreement. The Exchange 
also proposes to delete the reference to the ``Operating Agreement,'' 
for purposes of clarity and uniformity.\4\ With the proposed changes, 
the first paragraph of the LLC Agreement will be as follows:
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    \3\ See LLC Agreement.
    \4\ See id.

    Miami International Holdings, Inc., a Delaware corporation, the 
sole member (the ``LLC Member'') of MIAX Emerald, LLC, a Delaware 
limited liability company (the ``Company''), pursuant to and in 
accordance with the Delaware Limited Liability Company Act, 6 Del.C. 
Sec.  18-101, et seq. (the ``LLC Act''), hereby declares the 
following to be the Second Amended and Restated Limited Liability 
Company Agreement (the ``LLC Agreement'') of the Company which 
amends and restates in its entirety the Amended and Restated Limited 
Liability Company Agreement dated December 21, 2018 of the Company. 
Capitalized terms not otherwise defined herein shall have the 
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meanings set forth on Schedule A to this LLC Agreement.

    Next, the Exchange proposes to amend Section 3 of the LLC Agreement 
to amend the address referenced therein for the Exchange's principal 
place of business. The Exchange has increased its office space at its 
current address of 7 Roszel Road, Princeton, New Jersey 08540.\5\ The 
new mailing and principal address for the Princeton, New Jersey office 
is now 7 Roszel Road, Suite 1A, Princeton, New Jersey 08540. 
Accordingly, the Exchange proposes to amend Section 3 of the LLC 
Agreement to reflect the change in mailing address from ``5th Floor'' 
to ``Suite 1A.''
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    \5\ See id., Section 3.
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    The Exchange proposes to amend Section 4 of the LLC Agreement to 
update the address of the Exchange's registered office in the State of 
Delaware, as well as the Exchange's registered agent. In particular, 
the Exchange proposes to delete the address and company name of the 
registered office and registered agent, respectively,

[[Page 73316]]

as contained in the current LLC Agreement. The Exchange proposes to 
insert in Section 4 of the LLC Agreement the updated address of its 
registered office and the name of the Exchange's registered agent. With 
the proposed changes, Section 4 of the LLC Agreement will be as 
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follows:

    The registered office of the Company required by the LLC Act to 
be maintained in the State of Delaware shall be 1209 Orange Street 
in the City of Wilmington, County of New Castle, ZIP Code 19801 or 
such other office as the Board of Directors may designate from time 
to time. The registered agent for the Company shall be The 
Corporation Trust Company, or such other registered agent as the 
Board of Directors may designate from time to time.

    Next, the Exchange proposes to amend Section 6 of the LLC Agreement 
to clarify that Miami International Holdings, Inc. (``MIH'') is the 
sole LLC Member \6\ of the Exchange and to update the address for MIH, 
as described above. The Exchange also proposes to delete the reference 
to ``Schedule B'' and the following sentence: ``The LLC Member was 
admitted to the Company as an LLC Member of the Company upon its 
execution of a counterpart signature page to the Operating Agreement at 
which time it acquired 100% of the limited liability company interests 
of the Company.'' The purpose of these changes is for administrative 
ease and to provide uniformity throughout the LLC Agreement. The 
Exchange also proposes to delete ``Schedule B'' from the LLC Agreement, 
which simply states that the LLC Member is MIH. This is duplicative 
information as the term ``LLC Member'' is defined in Schedule A to the 
LLC Agreement.\7\ Accordingly, the Exchange proposes to delete Schedule 
B and move the information regarding the LLC Member into Section 6.
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    \6\ ``LLC Member'' means Miami International Holdings, Inc., as 
the sole member of the Company. See LLC Agreement, Schedule A, 
Definitions.
    \7\ See id.
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    Next, the Exchange proposes to amend Section 9 of the LLC Agreement 
to delete the last sentence of Section 9(a), which states, ``The 
Directors as of the date of this LLC Agreement are set forth on 
Schedule C attached hereto.'' Schedule C of the LLC Agreement provides 
the names and classifications of the Board of Directors of the Exchange 
as of December 21, 2018. The Exchange proposes to delete Schedule C, 
and all references to Schedule C, as further described below, from the 
LLC Agreement. The names and classifications of the Board of Directors 
of the Exchange are publicly available information through the 
Commission's Electronic Data Gathering, Analysis, and Retrieval 
(``EDGAR'') website.\8\ The purpose of these changes is for 
administrative ease and to provide uniformity throughout the LLC 
Agreement.
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    \8\ See https://www.sec.gov/edgar/searchedgar/companysearch.html 
and https://www.sec.gov/oiea/Article/edgarguide.html for EDGAR 
filing information.
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    The Exchange also proposes to amend the first sentence of Section 
9(c) to clarify that the By-Laws \9\ of the Exchange have been adopted, 
thereby deleting the phrase ``hereby adopt the,'' in order to clarify 
that this has already occurred. Further, the Exchange proposes to 
delete the reference to ``Exhibit A'' in Section 9(c). Exhibit A 
currently provides that the By-Laws of MIAX Emerald are a separate 
document from the LLC Agreement. The Exchange provides the By-Laws as 
publicly available information on its website. Accordingly, additional 
reference to the By-Laws in Exhibit A is duplicative.
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    \9\ ``By-Laws'' has the meaning set forth in Section 9(c). See 
LLC Agreement, Schedule A, Definitions.
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    Next, the Exchange proposes to amend Section 29 of the LLC 
Agreement to delete the reference to ``Schedule B'' and provide a 
cross-reference to Section 6 for the address of the LLC Member, as 
described above. These proposed changes will provide clarity and 
uniformity throughout the LLC Agreement.
    The Exchange next proposes to amend ``Schedule A, Definitions'' to 
the LLC Agreement to delete the definition for ``Operating Agreement.'' 
As described above, the Exchange is amending and restating the LLC 
Agreement for the second time and as such, is removing the reference in 
the first paragraph of the LLC Agreement to the ``Operating 
Agreement.''
Changes to the By-Laws
    The Exchange proposes to amend the By-Laws to make several non-
substantive, administrative and clarifying changes. First, the Exchange 
proposes to amend the title of the By-Laws to insert the phrase 
``Amended and Restated.'' The Exchange proposes to amend the first 
paragraph of the By-Laws to insert the phrase ``Amended and Restated'' 
in front of the first time the word ``By-Laws'' appears and to delete 
the phrases ``Amended and Restated'' and ``dated as of December 21, 
2018,'' both of which refer to the LLC Agreement.\10\ The purpose of 
these changes is for administrative ease and to provide uniformity 
among the titles of each of the Exchange's corporate documents. With 
the proposed changes, the first paragraph of the By-Laws will be as 
follows:
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    \10\ See By-Laws.

    These Amended and Restated By-Laws have been established as the 
By-Laws of MIAX Emerald, LLC, a Delaware limited liability company 
(the ``Company''), pursuant to the Limited Liability Company 
Agreement of the Company (as amended from time to time, the ``LLC 
Agreement''), and, together with the LLC Agreement, constitute the 
limited liability company agreement of the Company within the 
meaning of the LLC Act (as defined in the LLC Agreement). In the 
event of any inconsistency between the LLC Agreement and these By-
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Laws, the provision of the LLC Agreement shall control.

    Finally, the Exchange proposes to make technical and conforming 
changes to the time and date of effectiveness on the signature pages of 
each of the Certificate of Formation, LLC Agreement and By-Laws. The 
Exchange also proposes to amend the signature line of the LLC Agreement 
to insert the full title of the signatory as ``Thomas P. Gallagher, 
Chairman and Chief Executive Officer.''
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\11\ Specifically, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \12\ requirements that the rules 
of an exchange be 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 mechanism 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) \13\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ Id.
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    The Exchange believes that the proposed changes to the Certificate 
of Formation, LLC Agreement and By-Laws are designed to prevent 
fraudulent and manipulative acts and practices, promote just and 
equitable principles of trade, foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing

[[Page 73317]]

information with respect to, and facilitating transactions in 
securities, remove impediments to and perfect the mechanism of a free 
and open market and a national market system, and, in general, protect 
investors and the public interest. The Exchange believes that the 
proposed changes are non-substantive, administrative changes and will 
reduce potential investor or market participant confusion regarding the 
Exchange's corporate documents. Further, the Exchange believes the 
proposed changes are not material and will have no impact on the 
governance, ownership, or operations of the Exchange.
    The Exchange believes its proposal to amend the Certificate of 
Formation, LLC Agreement and By-Laws are consistent with the Act as the 
changes are to maintain accurate information regarding, among other 
things, the Exchange's address, registered agent and registered office.

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 does not 
believe the proposed rule change will impose any burden on intra-market 
and inter-market competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the proposed changes are 
not intended to address competitive issues but rather are 
administrative, non-substantive changes that are concerned solely with 
updating the Certificate of Formation, LLC Agreement and By-Laws to 
reflect current, accurate information.

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 from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its 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 pursuant to Rule 19b-4(f)(6) under the 
Act \16\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay. As 
the proposed rule change raises no novel issues and promotes accuracy 
and consistency within the Exchange's Certificate of Formation, LLC 
Agreement, and By-Laws, the Commission believes that waiver of the 30-
day operative delay is consistent with the protection of investors and 
the public interest. Accordingly, the Commission hereby waives the 
operative delay and designates the proposed rule change operative upon 
filing.\18\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission also 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 change 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-2020-14 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-2020-14. 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-2020-14, and should be submitted 
on or before December 8, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-25266 Filed 11-16-20; 8:45 am]
BILLING CODE 8011-01-P