Document ID: SEC-2023-0813-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: MIAX Emerald, LLC
Posted Date: 2023-08-02T04:00Z

[Federal Register Volume 88, Number 147 (Wednesday, August 2, 2023)]
[Notices]
[Pages 50937-50939]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16390]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98010; File No. SR-EMERALD-2023-16]

Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Make 
Minor, Non-Substantive Edits to Rules 100, 515A, and 521

July 27, 2023.
    Pursuant to 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 July 17, 2023, MIAX Emerald, LLC (``MIAX Emerald'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
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 make a number of minor, non-substantive 
edits to Interpretations and Policies .01(b) of Exchange Rule 100, 
Definitions, Exchange Rule 515A, MIAX Emerald Price Improvement 
Mechanism (``PRIME'') and PRIME Solicitation Mechanism, and 
Interpretations and Policies .03 of Exchange Rule 521, Nullification 
and Adjustment of Options Transactions Including Obvious Errors.
    The text of the proposed rule change is available on the Exchange's 
website at https://www.miaxglobal.com/markets/us-options/emerald-options/rule-filings, 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
Amendment to Exchange Rule 515A
    The Exchange proposes to amend Exchange Rule 515A to make minor, 
non-substantive edits and clarifying changes to provide accuracy and 
precision within the rule text.
    Specifically, the Exchange proposes to amend current subparagraphs 
(a)(1)(ii) and (a)(1)(iii) to remove the periods at the end of the 
sentences and replace them with semicolons for grammatical correctness 
and clarity in the Rule text. Additionally, the Exchange proposes to 
remove the word ``and'' at the end of subparagraph (a)(1)(i) and add 
the word ``and'' at the end of subparagraph (a)(1)(iii). Furthermore, 
the Exchange proposes to amend current subparagraph (a)(1)(iii) by 
changing the first word ``With'' to lowercase at the beginning of the 
sentence. Accordingly, with the proposed changes, subparagraphs 
(a)(1)(i) through (a)(1)(iv) will read as follows:

    (i) the Agency Order is in a class designated as eligible for 
PRIME as determined by the Exchange and within the designated 
Auction order eligibility size parameters as such size parameters 
are determined by the Exchange;
    (ii) the Initiating Member must stop the entire Agency Order as 
principal or with a solicited order at the better of the NBBO or the 
Agency Order's limit price (if the order is a limit order);
    (iii) with respect to Agency Orders that have a size of less 
than 50 contracts, if at the time of receipt of the Agency Order, 
the NBBO has a bid/ask differential of $0.01, the System will reject 
the Agency Order; and
    (iv) Post-only OQs may not participate in PRIME as an Agency 
Order, principal interest or solicited interest.
Amendment to the Interpretations and Policies of Exchange Rules 100 and 
521
    The Exchange proposes to amend the Interpretations and Policies of 
Exchange Rules 100 and 521 to make minor, non-substantive edits and 
clarifying changes to provide accuracy and precision within the 
Interpretations and Policies of the Rule text.
    Specifically, the Exchange proposes to amend current subparagraph 
.01(b) of the Interpretations and Policies of Exchange Rule 100 to 
replace the capitalized word ``Complex'' with the lowercase word 
``complex'' at the beginning of the second sentence. Accordingly, with 
the proposed changes, subparagraph .01(b) will provide as follows:

    (b) Complex orders comprised of eight (8) options legs or fewer 
shall be counted as a single order. For complex orders comprised of 
nine (9) options legs or more, each leg shall count as its own 
separate order.

    Similarly, the Exchange proposes to amend current paragraph ``.03 
Complex Orders'' of the Interpretations and Policies of Exchange Rule 
521 to replace all the capitalized occurrences of the word ``Complex'' 
with the lowercase word ``complex''. Accordingly, with the proposed 
changes, paragraph ``.03 Complex Orders'' will provide as follows:

    .03 Complex Orders.
    (a) If a complex order executes against individual legs and at 
least one of the legs qualifies as an Obvious Error under paragraph 
(c)(1) or a Catastrophic Error under paragraph (d)(1), then the 
leg(s) that is an Obvious or Catastrophic Error will be adjusted in 
accordance with paragraphs (c)(4)(A) or (d)(3), respectively, 
regardless of whether one of the parties is a Customer. However, any 
Customer order subject to this paragraph (a) will be nullified if 
the adjustment would result in an execution price higher (for buy 
transactions) or lower (for sell transactions) than the Customer's 
limit price on the complex order or individual leg(s). If any leg of 
a complex order is nullified, the entire transaction is nullified.

[[Page 50938]]

    (b) If a complex order executes against another complex order 
and at least one of the legs qualifies as an Obvious Error under 
paragraph (c)(1) or a Catastrophic Error under paragraph (d)(1), 
then the leg(s) that is an Obvious or Catastrophic Error will be 
adjusted or busted in accordance with paragraph (c)(4) or (d)(3), 
respectively, so long as either: (i) the width of the National 
Spread Market for the complex order strategy just prior to the 
erroneous transaction was equal to or greater than the amount set 
forth in the wide quote table of paragraph (b)(3), or
    (ii) the net execution price of the complex order is higher 
(lower) than the offer (bid) of the National Spread Market for the 
complex order strategy just prior to the erroneous transaction by an 
amount equal to at least the amount shown in the table in paragraph 
(c)(1). If any leg of a complex order is nullified, the entire 
transaction is nullified. For purposes of this Rule 521, the 
National Spread Market for a complex order strategy is determined by 
the National Best Bid/Offer of the individual legs of the strategy.

    The purpose of all these proposed changes is to provide consistency 
and uniformity within the Exchange's Rulebook.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with Section 6(b) of the Act \3\ in general, and furthers the 
objectives of Section 6(b)(1) of the Act \4\ in particular, in that 
they are designed to enforce compliance by its Members \5\ and persons 
associated with its Members, with the provisions of the rules of the 
Exchange. In particular, the Exchange believes that the proposed rule 
changes will provide greater clarity to Members and the public 
regarding the Exchange's Rules by correcting grammatical errors and 
providing consistency within the Exchange's Rulebook. The proposed 
changes will also make it easier for Members to interpret the 
Exchange's Rulebook.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(1).
    \5\ The term ``Member'' means an individual or organization 
approved to exercise the trading rights associated with a Trading 
Permit. Members are deemed ``members'' under the Exchange Act. See 
Exchange Rule 100.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. Specifically, the Exchange 
believes the proposed changes will not impose any burden on intra-
market competition as there is no functional change to the Exchange's 
System \6\ and because the rules of the Exchange apply to all MIAX 
Emerald participants equally. The Exchange believes the proposed rule 
changes will not impose any burden on intra-market competition as the 
proposed changes are not designed to address any competitive issue but 
rather are designed to remedy minor non-substantive issues and provide 
added precision and accuracy to the rule text of Exchange Rule 515A and 
the Interpretations and Policies of Exchange Rules 100 and 521. In 
addition, the Exchange does not believe the proposal will impose any 
burden on inter-market competition as the proposal does not address any 
competitive issues and is intended to protect investors by providing 
further transparency and precision for referencing the Exchange's 
Rules.
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    \6\ The term ``System'' means the automated trading system used 
by the Exchange for the trading of securities. See Exchange Rule 
100.
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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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
Because the proposed rule change does not: (i) significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6)(iii) thereunder.\10\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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, 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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    At any time within 60 days of the filing of such 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 under 
Section 19(b)(2)(B) \11\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 15 U.S.C. 78s(b)(2)(B).
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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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-EMERALD-2023-16 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-EMERALD-2023-16. 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 website (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or

[[Page 50939]]

withhold entirely from publication submitted material that is obscene 
or subject to copyright protection. All submissions should refer to 
file number SR-EMERALD-2023-16 and should be submitted on or before 
August 23, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-16390 Filed 8-1-23; 8:45 am]
BILLING CODE 8011-01-P