[Federal Register Volume 80, Number 11 (Friday, January 16, 2015)]
[Notices]
[Pages 2465-2466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-00577]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74034; File No. SR-MIAX-2014-71]
Self-Regulatory Organizations: The Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Exchange Rule 807
January 12, 2015.
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 December 30, 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 Rule 807 to correspond
with Section 17(f)(2) of the Act.\3\
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\3\ 15 U.S.C. 78q(f)(2).
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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 Rule 807 (Fingerprint-Based
Background Checks of Exchange Employees and Independent Contractors) in
order to mirror the language of Section 17(f)(2) of the Act.\4\ Section
17(f)(2) of the Act explicitly directs the Attorney General of the
United States (i.e., the Federal Bureau of Investigation) to provide
SROs designated by the Commission with access to criminal history
record information. Access to the Federal Bureau of Investigation's
(``FBI'') (the fingerprint processing arm of the Office of the Attorney
General of the United States) database of fingerprint-based records is
permitted only when authorized by law. The Exchange recently changed
its procedure with regard to Rule 807, replacing manual fingerprinting
via fingerprinting cards with a Live-Scan electronic fingerprinting
system.\5\ As part of this transition and at the specific request of
the FBI, the Exchange now seeks to amend the language of Rule 807 to
mirror Section 17(f)(2) of the Act.\6\
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\4\ 15 U.S.C. 78q(f)(2).
\5\ See Securities Exchange Act Release No. 72600 (July 11,
2014) 79 FR 41717 (July 17, 2014) (SR-MIAX-2014-38).
\6\ 15 U.S.C. 78q(f)(2).
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The Exchange proposes to amend Rule 807 to apply to all partners,
directors, officers, and employees of the Exchange in order to more
closely align with the requirements for national securities exchanges
as provided in Section 17(f)(2) of the Act.\7\ Currently, Rule 807(a)
applies to (1) all prospective and current Exchange employees, (2) all
prospective and current independent contractors who have or are
anticipated to have access to the facilities of the Exchange for ten
(10) business days or longer, and (3) all prospective and current
temporary employees who have or are anticipated to have access to
facilities of the Exchange for ten (10) business days or longer.\8\
Section 17(f)(2) of the Act does not specifically apply to independent
contractors nor temporary employees, but instead references ``partners,
directors, officers, and employees'' of the Exchange. Thus, the
Exchange proposes to amend Rule 807 to delete references to independent
contractors and temporary employees in order to mirror the requirements
of Section 17(f)(2) of the Act.\9\ In addition, in order to enhance the
physical security of the facilities, systems, data, and information of
the Exchange, it shall be the policy of the Exchange, outside of Rule
807, to conduct a non-fingerprint-based background check of all
prospective and current independent contractors and all prospective and
current temporary employees who have or are anticipated to have access
to the facilities of the Exchange for ten (10) business days or longer.
The Exchange further proposes related technical changes to Rule 807(c)
and 807(d).
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\7\ 15 U.S.C. 78q(f)(2).
\8\ See Rule 807(a).
\9\ See 15 U.S.C. 78q(f)(2).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with the
Securities Exchange Act of 1934 (the ``Act'') \10\ and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act. Specifically, the Exchange
believes the proposed change to Rule 807 is consistent with the Section
6(b)(5) \11\ requirements that the rules of an exchange be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, 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.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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In particular, the Exchange believes the proposed change to Rule
807 is consistent with the foregoing requirements of Section 6(b)(5) in
that it will allow MIAX to remain compliant with applicable federal
law--specifically, Section 17(f)(2) of the
[[Page 2466]]
Act.\12\ Running fingerprint-based background checks is imperative for
the Exchange as they help MIAX identify and exclude persons with felony
or misdemeanor conviction records that may pose a threat to the safety
of Exchange personnel or the security of facilities and records,
thereby enhancing business continuity, workplace safety and the
security of the Exchange's operations and helping to protect investors
and the public interest.
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\12\ 15 U.S.C. 78q(f)(2).
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B. Self-Regulatory Organization's Statement on Burden on Competition
MIAX does not believe that the proposed change to Rule 807 will
impose any burden on competition that is not necessary or appropriate
in the furtherance of the purposes of the Act. The proposed change
under the rule would maintain the security of the Exchange's facilities
and records without adding any burden on market participants and allow
the Exchange continued compliance with its fingerprinting rules and
with Section 17(f)(2) of the Act as amended by the Dodd-Frank Act.\13\
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\13\ See Section 929S of the Dodd-Frank Act.
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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 \14\ and Rule 19b-4(f)(6) \15\
thereunder.
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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-2014-71 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.
All submissions should refer to File Number SR-MIAX-2014-71. 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 such 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-2014-71 and should be
submitted on or before February 6, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-00577 Filed 1-15-15; 8:45 am]
BILLING CODE 8011-01-P