[Federal Register Volume 78, Number 239 (Thursday, December 12, 2013)]
[Notices]
[Pages 75627-75629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-29618]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71014; File No. SR-MIAX-2013-53]
Self-Regulatory Organizations: Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change for the Extension of a Pilot Program for SPY
Position and Exercise Limits
December 6, 2013.
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 November 26, 2013, 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 Rules 307 and
309 to extend the pilot program that eliminates the position and
exercise limits for physically-settled options on the SPDR S&P 500 ETF
Trust (``SPY Pilot Program'').
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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Exchange Rule 307, Commentary .01,
Position Limits, and Exchange Rule 309, Commentary .01, Exercise
limits, to extend the duration of the SPY Pilot Program through
December 15, 2014. There are no substantive changes being proposed to
the SPY Pilot Program.
In proposing to extend the SPY Pilot Program, the Exchange affirms
its consideration of several factors that support the proposal to
establish the SPY Pilot Program, which include: (1) The liquidity of
the option and the underlying security; (2) the market
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capitalization of the underlying security and the securities that make
up the S&P 500 Index; (3) options reporting requirements; and (4)
financial requirements imposed by MIAX and the Commission.
The Pilot Report for the SPY Pilot Program is not due until on or
before January 5, 2014. However, because not all self-regulatory
organizations (``SROs'') have adopted similar rules eliminating
position and exercise limits for SPY options and because market
participants that are members of such SROs are required to comply with
the more restrictive SPY option position and exercise limits, no market
participants have availed themselves of the SPY Pilot Program. As a
result, there is not sufficient data to compile a meaningful Pilot
Report at this time to file with this current extension request.
The Exchange believes that it is appropriate to extend the SPY
Pilot Program for an additional thirteen months to provide time for
other SROs to adopt similar pilot programs that eliminate positions and
exercise limits for SPY options. In that event (and in a year's time),
the Exchange will be able to either extend the SPY Pilot Program, adopt
the SPY Pilot Program on a permanent basis, or terminate the SPY Pilot
Program.
The Exchange represents that the Pilot Report would be submitted
within thirty (30) days of the end of the first twelve months of the
extended SPY Pilot Program time period and would cover the twelve
months that just ended. The Pilot Report will compare the impact of the
pilot program, if any, on the volumes of SPY options and the volatility
in the price of the underlying SPY contract, particularly at
expiration. The Pilot Report also will detail the size and different
types of strategies employed with respect to positions established in
SPY options; note whether any problems, in the underlying SPY ETF or
otherwise, arose as a result of the no-limit approach; and include any
other information that may be useful in evaluating the effectiveness of
the pilot program. In preparing the Pilot Report, the Exchange will
utilize various data elements such as volume and open interest. In
addition the Exchange would make available to Commission staff data
elements relating to the effectiveness of the SPY Pilot Program.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) \3\ of the Act in general, and furthers the
objectives of Section 6(b)(5) \4\ of the Act 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.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that extending the SPY Pilot
Program promotes just and equitable principles of trade by permitting
market participants, including market makers, institutional investors
and retail investors, to establish greater positions when pursuing
their investment goals and needs.
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 designed to address any aspect of competition, whether between the
Exchange and its competitors, or among market participants. Instead,
the proposed rule change is designed to allow the SPY Pilot Program to
continue while other SROs adopt similar provisions.
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 \5\ and Rule 19b-4(f)(6) \6\
thereunder.
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\5\ 15 U.S.C. 78s(b)(3)(A).
\6\ 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 [email protected]. Please include
File Number SR-MIAX-2013-53 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 SR-MIAX-2013-53. 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
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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-2013-53 and should be submitted on
or before January 2, 2014. For the Commission, by the Division of
Trading and Markets, pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
Elizabeth Murphy,
Secretary.
[FR Doc. 2013-29618 Filed 12-11-13; 8:45 am]
BILLING CODE 8011-01-P