[Federal Register Volume 77, Number 161 (Monday, August 20, 2012)]
[Notices]
[Pages 50184-50185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-20409]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67660; File No. 10-207]
Miami International Securities Exchange, LLC; Notice of Filing of
Application for Registration as a National Securities Exchange Under
Section 6 of the Securities Exchange Act of 1934
August 15, 2012.
On April 26, 2012, Miami International Securities Exchange, LLC
(``MIAX'') submitted to the Securities and Exchange Commission
(``Commission'') a Form 1 application under the Securities Exchange Act
of 1934 (``Exchange Act''), seeking registration as a national
securities exchange under Section 6 of the Exchange Act. MIAX's Form 1
application provides detailed information on how it proposes to satisfy
the requirements of the Exchange Act.
The Commission is publishing this notice to solicit comments on
MIAX's Form 1 application. The Commission will take any comments it
receives into consideration in making its determination about whether
to grant MIAX's request to be registered as a national securities
exchange. The Commission will grant the registration if it finds that
the requirements of the Exchange Act and the rules and regulations
thereunder with respect to MIAX are satisfied.\1\
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\1\ 15 U.S.C. 78s(a).
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MIAX would be wholly owned by its parent company, Miami
International Holdings, Inc. (``Miami Holdings''). If approved, MIAX
would commence operation of a fully automated electronic trading
platform for the trading of standardized options with a continuous,
automated matching function. MIAX would not have a physical trading
floor. Liquidity would be derived from orders to buy and orders to sell
submitted to MIAX electronically by its registered broker-dealer
members, as well as from quotes submitted electronically by market
makers.
A description of the manner of operation of MIAX's proposed system
can be found in Exhibit E to MIAX's Form 1 application. The proposed
rulebook for the proposed MIAX exchange can be found in Exhibit B to
MIAX's Form 1 application, and the governing documents for both MIAX
and Miami Holdings can be found in Exhibit A. A listing of the officers
and directors of MIAX can be found in Exhibit J to MIAX's Form 1
application. MIAX's Form 1 application, including all of the Exhibits
referenced above, is available online at www.sec.gov/rules/other.shtml
as well as at the Commission's Public Reference Room.
With respect to MIAX's proposed trading rules, some of the notable
features proposed by MIAX are highlighted below. For example, in
certain circumstances where MIAX could not fully execute an incoming
Priority Customer order,\2\ it has proposed to use mechanisms and route
timers that would expose the incoming order to the MIAX market for up
to one second before routing the order to away markets or otherwise
handling the order in accordance with its proposed trading rules.\3\ In
addition, in limited circumstances, certain orders that are eligible
for routing could be routed immediately, at least in part, without
being subject to a one second route timer, if they meet a number of
criteria.\4\
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\2\ See proposed MIAX Rule 100 (defining ``Priority Customer''
as a person or entity that is not a broker or dealer in securities
and does not place more than 390 orders in listed options per day on
average during a calendar month for its own beneficial accounts).
\3\ See proposed MIAX Rules 515 and 529. See also Exhibit E to
MIAX's Form 1 submission, at 5-7.
\4\ See proposed MIAX Rule 529. In short, an order would be
eligible for immediate routing if (1) it is a customer order
significantly greater in size than the size of the NBBO posted at
away markets, and (2) it arrives at a time when MIAX has significant
interest posted at one minimum price variation inferior to the NBBO
at away markets.
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MIAX has proposed three different classes of market makers that
would operate on MIAX: Primary Lead Market Makers; Lead Market Makers;
and Registered Market Makers. The different classes of market makers
would be subject to varying levels of affirmative and negative market
making obligations.
Notably, MIAX would allow market makers to use a variety of quote
types, some of which would have a specific time in force and would be
analogous to orders (MIAX refers to such order types as ``eQuotes,''
and market makers would be able to enter these orders through their
quotation infrastructure).\5\ Specifically, MIAX has proposed rules to
allow market makers to submit any of the following ``quote'' types:
Standard quote; Day eQuote; Immediate or Cancel eQuote; Fill or Kill
eQuote; Intermarket Sweep eQuote; Auction or Cancel eQuote; and Opening
Only eQuote.\6\ While market makers could only have one Standard quote
active at any one time, they would be permitted to have multiple types
of eQuotes active in a single series.\7\
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\5\ See Exhibit E to MIAX's Form 1 submission, at 3.
\6\ See proposed MIAX Rule 517.
\7\ If its application ultimately is approved by the Commission,
MIAX does not expect to make Day eQuotes available for use upon
first commencing operations. See Exhibit E to MIAX's Form 1
submission.
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MIAX's proposed rules also provide for the categorization of
certain market maker quotes as ``priority'' quotes and ``non-priority''
quotes.\8\ Use of priority quotes, which need to meet certain bid/ask
differential requirements, would entitle market makers to precedence
over all other professional interest (i.e., non-Priority Customer
orders and market maker orders and non-priority quotes) on MIAX at the
same price.\9\
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\8\ See proposed MIAX Rule 517.
\9\ See id.
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Interested persons are invited to submit written data, views, and
arguments concerning MIAX's Form 1, including whether the application
is consistent with the Exchange 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 [email protected]. Please include
File Number 10-207 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number 10-207. 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/other.shtml).
Copies of the
[[Page 50185]]
submission, all subsequent amendments, all written statements with
respect to MIAX's Form 1 filed with the Commission, and all written
communications relating to the application 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 a.m. and 3 p.m. 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 publicly available. All submissions
should refer to File Number 10-207 and should be submitted on or before
October 4, 2012.
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\10\ 17 CFR 200.30-3(a)(71)(i).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012-20409 Filed 8-17-12; 8:45 am]
BILLING CODE 8011-01-P