[Federal Register Volume 79, Number 207 (Monday, October 27, 2014)]
[Notices]
[Pages 63979-63981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-25431]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73395; File No. SR-MIAX-2014-53]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the MIAX Top of Market (``ToM'') and AIS
Data Feeds
October 21, 2014.
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 6, 2014, 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 the MIAX Top of Market
(``ToM'') and AIS data feeds.
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 the MIAX Top of Market (``ToM'')
market data feed, the MIAX Express Interface (``MEI'') connectivity
service,\3\ and Administrative Information Subscriber (``AIS'') market
data feed. Specifically, the Exchange proposes removing messages
related to administrative information and Liquidity Seeking Events
(``LSE'') from ToM and the MEI Port connection, while also adding the
information to the AIS data feed to the extent that it is not already
included with AIS.
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\3\ MIAX Express Interface is a connection to MIAX systems that
enables Market Makers to submit electronic quotes to MIAX.
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ToM provides market participants with a direct data feed that
includes the Exchange's best bid and offer, with aggregate size, and
last sale information, based on displayable order and quoting interest
on the Exchange. The ToM data feed includes data that is identical to
the data sent to the processor for the Options Price Regulatory
Authority (``OPRA''). The ToM and OPRA data leave the MIAX system at
the same time, as required under Section 5.2(c)(iii)(B) of the Limited
Liability Company Agreement of the Options Price Reporting Authority
LLC (the ``OPRA Plan''), which prohibits the dissemination of
proprietary information on any more timely basis than the same
information is furnished to the OPRA System for inclusion in OPRA's
consolidated dissemination of options information. In addition to
MIAX's best bid and offer, with aggregate size and last sale
information, subscribers that currently subscribe to ToM also receive:
opening imbalance condition information; opening routing information;
Expanded
Quote Range \4\ information, as provided in MIAX Rule 503(f)(5);
Post-Halt Notification,\5\ as provided in MIAX Rule 504(d), and
Liquidity Refresh,\6\ condition information, as provided in MIAX Rule
515(c)(2). This additional information (the ``administrative
information'') is included in the ToM feed as secondary information.
The administrative information is also currently available to non-
Market Makers through the AIS data feed and MIAX Market Makers via
connectivity with the MIAX Express Interface (``MEI''),\7\ for which
they are assessed connectivity fees.
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\4\ Where there is an imbalance at the price at which the
maximum number of contracts can trade that is also at or within the
highest valid width quote bid and lowest valid width quote offer,
the System will calculate an Expanded Quote Range (``EQR''). The EQR
will be recalculated any time a Route Timer or Imbalance Timer
expires if material conditions of the market (imbalance size, ABBO
price or size, liquidity price or size, etc.) have changed during
the timer. Once calculated, the EQR will represent the limits of the
range in which transactions may occur during the opening process.
See Exchange Rule 503(f)(5).
\5\ After the Exchange has determined to end a trading system
halt, the System will broadcast to subscribers of the Exchange's
data feeds, a Post-Halt Notification. See Exchange Rule 504(d).
\6\ If a Market Maker quote was all or part of the MIAX Best Bid
or Offer (``MBBO'') and the Market Maker's quote was exhausted by
the partial execution of the initiating order, the System will pause
the market for a time period not to exceed one second to allow
additional orders or quotes refreshing the liquidity at the MBBO to
be received (``liquidity refresh pause''). See Exchange Rule
515(c)(2).
\7\ MIAX Express Interface is a connection to MIAX systems that
enables Market Makers to submit electronic quotes to MIAX.
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The Exchange proposes to remove all the secondary administrative
information including LSE related information from the ToM data feed
and from the MEI Port connectivity service, with the exception of the
Post-Halt Notification. The secondary administrative information and
[[Page 63980]]
Liquidity Seeking Event data being removed from ToM and the MEI Port
includes: (i) Opening imbalance condition information; (ii) opening
routing information; (iii) Expanded Quote Range information, as
provided in MIAX Rule 503(f)(5); (iv) Liquidity Refresh messages, as
provided in MIAX Rule 514(c)(2); (v) Route Timer information, as
provided in MIAX Rule 529; (vi) PRIME related auction messages, as
provided in MIAX Rule 515A; and (vii) any other similar timer or
auction related messages. ToM subscribers will continue to receive the
direct data that includes the Exchange's best bid and offer, with
aggregate size, and last sale information based on displayable order
and quoting interest on the Exchange, and the Post-Halt Notification.
The ToM data feed includes data that is identical to the data sent to
the processor for the Options Price Regulatory Authority (``OPRA'').
Both Full Service and Limited Service MEI Ports will continue to
provide Market Makers with the ability to send quotes and purge
messages in the same manner as they do currently. The Exchange also
proposes to amend the AIS data feed to specifically include all the
secondary administrative information and LSE related information that
is being removed from ToM and the MEI Port connection. The Exchange
notes that most of this administrative information is already included
in the AIS data feed, as described above. In order to receive the
secondary administrative information and LSE related messages, the ToM
subscribers and users of the MEI Port connectivity service will have to
connect to the Exchange with an AIS data feed. The Exchange notes that
ToM subscribers may receive the AIS data feed at no additional cost.\8\
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\8\ See SR-MIAX-2014-51.
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Because of the technology changes associated with this rule
proposal, the Exchange will announce the implementation date of the
proposal in a Regulatory Circular to be published no later than 90 days
after the publication of the approval order in the Federal Register.
The implementation date will be no later than 90 days following
publication of the Regulatory Circular announcing publication of the
approval order in the Federal Register.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) \9\ of the Act in general, and furthers the
objectives of Section 6(b)(5) \10\ 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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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The proposed changes to the market data products are designed to
increase the efficient use of connectivity bandwidth between market
participants and the Exchange in a manner that promotes just and
equitable principles of trade, fosters cooperation and coordination
with persons engaged in facilitating transactions in securities,
removes impediments to and perfect the mechanisms of a free and open
market and a national market system. The Exchange believes that the
changes will enhance the quality and usefulness of ToM, the MEI Ports,
and AIS market data product to the benefit of all market participants
that subscribe to such products.
The ToM market data product is designed to promote just and
equitable principles of trade by providing all subscribers with top of
market data that should enable them to make informed decisions on
trading in MIAX options by using the ToM data to assess current market
conditions that directly affect such decisions. The market data
provided by ToM and AIS, and the connectivity of MEI, removes
impediments to, and is designed to further perfect, the mechanisms of a
free and open market and a national market system by making the MIAX
market more transparent and accessible to market participants making
routing decisions concerning their options orders. The ToM market data
product is also designed to protect investors and the public interest
by providing data to subscribers that is already currently available on
other exchanges and will enable MIAX to compete with such other
exchanges, thereby offering market participants with additional data in
order to seek the market center with the best price and the most
liquidity on which to execute their transactions, all to the benefit of
investors and the public interest, and to the marketplace as a whole.
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 not necessary or appropriate in
furtherance of the purposes of the Act. On the contrary, the Exchange
believes that the changes to the market data products will enhance
competition in the U.S. options markets by enhancing the quality and
usefulness of a market data product that is similar to that which is
currently provided on other options exchanges.\11\
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\11\ The Exchange notes that the ToM market data product
competes with similar products offered by other markets such as
NASDAQ OMX PHLX, LLC (``PHLX'') and the International Stock Exchange
LLC (``ISE''). For example, PHLX and ISE offer market data products
that are similar to ToM: data feeds that show the top of the market
entitled Top of PHLX Options (``TOPO'') and the ISE TOP Quote Feed.
See e.g., Securities Exchange Act Release No. 60459 (August 7,
2009), 74 FR 41466 (August 17, 2009) (SR-Phlx-2009-54) (Order
Approving a Proposed Rule Change to Establish Fees for the Top of
PHLX Options Direct Data Feed Product).
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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 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 \12\ and Rule 19b-4(f)(6) \13\
thereunder.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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,
[[Page 63981]]
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-2014-53 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-MIAX-2014-53. 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 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-2014-53 and should be
submitted on or before November 17, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-25431 Filed 10-24-14; 8:45 am]
BILLING CODE 8011-01-P