Document ID: SEC-2020-0986-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Miami International Securities Exchange, LLC
Posted Date: 2020-06-24T04:00Z

[Federal Register Volume 85, Number 122 (Wednesday, June 24, 2020)]
[Notices]
[Pages 37986-37988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13537]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89093; File No. SR-MIAX-2020-15]

Self-Regulatory Organizations; Miami International Securities 
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Temporarily Extend Filing Deadlines for Certain 
Supervision-Related Reports

June 18, 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 June 4, 2020, Miami International Securities 
Exchange, LLC (``MIAX Options'' or the ``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 1308, 
Supervision of Accounts, to temporarily extend the filing requirements 
for certain supervision-related reports, currently given an extension 
to June 1, 2020, to June 30, 2020.
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings/ at MIAX Options' 
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
    Given current market conditions, the Exchange proposes to provide 
its members temporary relief from filing certain supervision-related 
reports pursuant to Exchange Rule 1308 (Supervision of Accounts).\3\
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    \3\ The Exchange notes that MIAX Rule 1308 is incorporated by 
reference into the rulebooks of MIAX PEARL, LLC (``PEARL'') and MIAX 
Emerald, LLC (``Emerald''). As such, the amendments to MIAX Rule 
1308 proposed herein will also impact PEARL and Emerald Rules 1308. 
The Exchange initially filed the proposal on June 1, 2020 (SR-MIAX-
2020-14). On June 4, 2020, the Exchange withdrew that filing and 
submitted this filing.
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    The Exchange has been closely monitoring the current situation 
regarding the novel coronavirus (``COVID-19'') pandemic. The Exchange 
understands COVID-19 has placed stress on market participants' 
information technology infrastructure and the required deployment of 
significant resources, including to implement and continuously adapt 
business continuity plans. On March 11, 2020, the World Health 
Organization characterized COVID-19 as a pandemic.\4\ To slow the 
spread of the disease, federal and state officials implemented social-
distancing measures, placed significant limitations on large 
gatherings, limited travel, and closed non-essential businesses, all of 
which are largely still in place for the foreseeable future. The 
Exchange also notes that in response to COVID-19, the Financial 
Industry Reporting Authority (``FINRA'') recently reissued temporary 
relief for member firms by, among other things, extending the deadline 
for submitting their supervision-related reports (FINRA Rule 3120 
Report and FINRA Rule 3130 certification) from their initial extension 
deadlines of June 1, 2020 \5\ to June 30, 2020.\6\ The Exchange notes, 
too, that other options exchanges that had previously extended the 
supervisory report deadlines from April 1 to June 1 for their 
members,\7\ also plan to submit similar filings to, again, extend their 
deadlines through June 30, 2020.
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    \4\ See WHO Director-General's Opening Remarks at the Media 
Briefing on COVID-19 (March 11, 2020), available at https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarksat-the-media-briefing-on-covid-19---11-march-2020.
    \5\ See FINRA Regulatory Notice 20-08 (March 9, 2020) available 
at https://www.finra.org/rules-guidance/notices/20-08.
    \6\ See FINRA Regulatory Notice 20-08, FAQs, Supervision (May 
19, 2020) available at https://www.finra.org/rules-guidance/key-topics/covid-19/faq#supe.
    \7\ See SR-CBOE-2020-049 (May 29, 2020). See Securities Exchange 
Act Release Nos. 88524 (March 31, 2020), 85 FR 19198 (April 6, 2020) 
(SR-ISE-2020-14); and 88527 (March 31, 2020), 85 FR 19190 (April 6, 
2020) (SR-Phlx-2020-16).
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    By way of background, Exchange Rule 1308(g) requires each Exchange 
member that conducts a non-member customer business to submit to the 
Exchange a written report on the member's supervision and compliance 
effort during the preceding year and on the adequacy of the member's 
ongoing compliance processes and procedures. Each member that conducts 
a public customer options business is also required to specifically 
include its options compliance program in the report.\8\ The Exchange 
Rule 1308(g) report is due on April 1 of each year. Exchange Rule 
1308(h) requires that each member submit, by April 1 of each year, a 
copy of the Rule 1308(g) report to one or more control persons or, if 
the member has no control person, to the audit committee of its board 
of directors or its equivalent committee or group.\9\
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    \8\ The report shall include, but not be limited to, the 
information set out in Exchange Rule 1308(g)(1)-(6).
    \9\ See Exchange Rule 1308(h) for the meaning of the term 
``control person'' and requirements in the case of a control person 
that is an organization.
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    Rule 1308 currently provides relief to members and their employees 
by extending these deadlines to June 1, 2020.\10\ However, as COVID-19 
remains an ongoing pandemic, to meet the current June 1 deadlines in 
Rule 1308, member personnel would have to divide their efforts and 
resources that are otherwise necessary to address continued disruptions 
and stresses as a result of the ongoing COVID-19 pandemic. Therefore, 
the Exchange proposes to extend the filing deadline through June 30, 
2020, thus allowing

[[Page 37987]]

member personnel that are tasked with organizing, compiling and filing 
such reports, but are also tasked with maintaining critical operations 
and sustainable business continuity plans, and otherwise adjusting the 
member's trading operations in line with evolving market conditions and 
initiatives to address such conditions to focus their attention on 
those immediate needs.
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    \10\ See Securities Exchange Act Release No. 88543 (April 2, 
2020), 85 FR 19788 (April 8, 2020) (SR-MIAX-2020-06).
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2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \11\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \12\ 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 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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    In particular, the Exchange believes that the proposed rule will 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities. The proposed rule change will 
allow the Exchange to extend temporary relief to its members by issuing 
another extension of certain supervisory reporting deadlines from June 
1, 2020 to June 30, 2020 in light of the ongoing COVID-19 crisis. The 
Exchange understands this pandemic has caused, and continues to cause, 
stress on market participants' information technology infrastructure 
and the deployment of significant resources to address ongoing 
disruptions and continued stresses. By allowing the Exchange to re-
extend the deadlines for filing certain supervision related reports in 
Rule 1308, the Exchange believes the proposed rule will allow member 
personnel, who would normally be tasked with organizing and compiling 
such reports, to focus their attention on maintaining critical 
operations and sustainable business continuity plans, and otherwise 
adjusting their trading operations in line with evolving market 
conditions and initiatives in response to the ongoing COVID-19 
pandemic. The Exchange also believes the proposed rule change removes 
impediments to and perfects the mechanism of a free and open market and 
a national market system because, as noted above, FINRA has also re-
extended the time for their members to file supervision-related reports 
from June 1, 2020 to June 30, 2020.\14\ Additionally, as indicated 
above, other options exchanges that had previously extended the 
supervisory report deadlines from April 1 to June 1 for their 
members,\15\ plan to submit similar filings to re-extend their 
deadlines through June 30, 2020.
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    \14\ See supra note 6.
    \15\ See supra note 7.
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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. The proposed rule change is 
not intended to address competitive issues. The Exchange does not 
believe the proposed rule would impose any burden on intramarket 
competition that is not necessary or appropriate in furtherance of the 
Act, because the additional June 30, 2020 extension for supervision-
related reports in Rule 1308 will apply equally to all members. The 
Exchange does not believe that the proposed rule change would impose 
any burden on intermarket competition because it relates only to the 
extension of the filing deadline for supervision-related reports. 
Additionally, and as stated above, FINRA has recently notified its 
members that the filing deadline for their supervision-related reports 
has again been extended from June 1, 2020 to June 30, 2020,\16\ and 
other options exchanges plan to file for the same relief through June 
30, 2020, as well.
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    \16\ See supra note 6.
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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 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 \17\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 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 Commission has waived this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \19\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \20\ 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 so 
that the proposed rule change may become operative upon filing. The 
Commission notes that the proposed rule change would allow the 
Exchange, in light of the COVID-19 pandemic, to provide temporary 
relief for members by extending the deadlines in paragraphs (g) and (h) 
of Exchange Rule 1308 (Supervision of Accounts) from June 1, 2020 to 
June 30, 2020. This is consistent with the extension FINRA has provided 
its members for supervision-related reports and certifications required 
pursuant to FINRA Rule 3120 and FINRA Rule 3130 \21\ and the extension 
for certain supervision-related reports Cboe Exchange, Inc. has 
provided its trading permit holders.\22\ 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.\23\
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    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ 17 CFR 240.19b-4(f)(6)(iii).
    \21\ See supra note 6.
    \22\ See Securities Exchange Act Release No. 88978 (June 1, 
2020), 85 FR 34688 (June 5, 2020) (SR-CBOE-2020-049).
    \23\ 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

[[Page 37988]]

action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.

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-2020-15 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-2020-15. 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-MIAX-2020-15 and should be submitted on 
or before July 15, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-13537 Filed 6-23-20; 8:45 am]
BILLING CODE 8011-01-P