[Federal Register Volume 84, Number 161 (Tuesday, August 20, 2019)]
[Notices]
[Pages 43212-43216]
[FR Doc No: 2019-17846]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86682; File No. SR-MIAX-2019-37]

Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing of a Proposed Rule Change To Amend
Exchange Rule 518, Complex Orders, To Adopt New Interpretation and
Policy .07

August 14, 2019.
    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 August 9, 2019, Miami International Securities
Exchange, LLC (``MIAX Options'' or the ``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') a 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 is filing a proposal to amend Exchange Rule 518,
Complex Orders, to adopt new Interpretation and Policy .07.
    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/ at MIAX Options'
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 518, Complex Orders,
to adopt new Interpretation and Policy .07, SPIKES Combo Orders, to
further facilitate delta neutral transactions for investors that use
complex orders to trade SPIKES options.
Complex Orders on the Exchange
    Under the Exchange's current rule a ``complex order'' is any order
involving the concurrent purchase and/or sale of two or more different
options in the same underlying security (the ``legs'' or ``components''
of the complex order), for the same account, in a ratio that is equal
to or greater than one-to-three (.333) and less than or equal to three-
to-one (3.00) and for the purposes of executing a particular investment
strategy.\3\ This allows the Exchange to place the complex strategy \4\
on the Exchange's Strategy Book.\5\ All strategies placed on the
Exchange's Strategy Book conform to this allowable ratio (``conforming
strategy'').\6\ The ratio between the size of the smallest sized option
component and the largest sized option component must be equal to or
greater than one-to-three (1:3) or less than or equal to three-to-one
(3:1). (e.g., Buy 30 XYZ May 18 Calls, Sell 10 XYZ April 16 Calls
(30:10 or 3:1))
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    \3\ See Exchange Rule 518(a)(5).
    \4\ The term ``complex strategy'' means a particular combination
of components and their ratios to one another. New Complex
strategies can be created as the result of the receipt of a complex
order or by the Exchange for a complex strategy that is not
currently in the System. The Exchange may limit the number of new
complex strategies that may be in the System at a particular time
and will communicate this limitation to Members via Regulatory
Circular. See Exchange Rule 518(a)(6).
    \5\ The ``Strategy Book'' is the Exchange's electronic book or
complex orders and complex quotes. See Exchange Rule 518(a)(17).
    \6\ The Exchange notes that orders representing non-conforming
strategies are rejected.
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    A complex order can also be a ``stock-option order.'' A stock-
option order is an order to buy or sell a stated number of units of an
underlying security (stock or Exchange Traded Fund Share (``ETF'')) or
a security convertible into the underlying stock (``convertible
security'') coupled with the purchase or sale of options contract(s) on
the opposite side of the market representing either (i) the same number
of units of the underlying security or convertible security, or (ii)
the number of units of the underlying stock necessary to create a delta
neutral position, but in no case in a ratio greater than eight-to-one
(8.00), where the ratio represents the total number of units of the
underlying security or convertible security (i.e., contracts) in the
option leg to the total number of units of the underlying security
(i.e., 100 shares) or convertible security in the stock leg.\7\
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    \7\ See Exchange Rule 518(a)(5).
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    An option's price can be influenced by a number of different
factors. Some of these are known as the ``Greeks'' because they are
commonly abbreviated with Greek letters; Delta, Gamma, Theta, and Vega.
Delta
    The Delta ([Delta]) is a measure of the change in an option's price
(premium of an option) resulting from a change in the underlying
security. The value of Delta ranges from -100 to 0 for puts and 0 to
100 for calls (multiplied by 100 to shift the decimal). Puts generate
negative delta because they have a negative relationship with the
underlying; that is, put premiums fall when the underlying rises and
vice versa.
    Conversely, call options have a positive relationship with the
price of the underlying: If the underlying rises, so does the call
premium provided there are no changes in other variables such as
implied volatility or time remaining until expiration. If the price of
the underlying falls, the call premium will also decline provided all
other things remain constant.\8\
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    \8\ John Summa, Option Greeks: The 4 Factors to Measure Risks,
Investopedia (July 18, 2019), https://www.investopedia.com/trading/getting-to-know-the-greeks/
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    Delta changes as an option becomes more valuable or in-the-money.
In-the-money means that the value of the option increases due to the
option's strike price being more favorable to the underlying's price.
As the option gets further in the money, Delta approaches 100 on a call
and -100 on a put with the extremes eliciting a one-for-one
relationship between changes in the option price and changes in the
price of the underlying. In effect, at Delta values of -100 and 100,
the option behaves like the underlying in terms of price changes.\9\
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    \9\ See id.
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Gamma
    The Gamma ([Gamma]), sometimes referred to as the option's
curvature, is the rate of change in the delta as the underlying price
changes. The gamma is usually expressed in deltas gained or lost per

one-point change in the underlying, with the delta increasing by the
amount of gamma when the underlying rises and falling by the amount of
the gamma when the underlying falls. If an option has a gamma of 5, for
each point rise (fall) in the price of the underlying, the option will
gain (lose) 5 deltas. If the option initially has a delta of 25 and the
underlying moves up (down) one full point, the new delta will be 30
(20).\10\
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    \10\ Sheldon Natenberg, Option Volatility & Pricing 105 (McGraw
Hill Education., 2nd ed. 2015).
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Theta
    An option's value is made up of intrinsic value \11\ and time
value.\12\ As time passes, the time-value portion gradually disappears
until, at expiration, the option is worth exactly its intrinsic value.
The theta ([Theta]), or time decay, is the rate at which an option
loses value as time passes, assuming that all other market conditions
remain unchanged. It is usually expressed as value lost per one day's
passage of time. An option with a theta of 0.05 will lose 0.05 in value
for each day that passes with no movement in the underlying contract.
If its theoretical value today is 4.00, one day later it will be worth
3.95. Two days later it will be worth 3.90.\13\
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    \11\ The intrinsic value or an option is the difference between
the price of the underlying asset and the strike price.
    \12\ Time value is equal to the option premium minus its
intrinsic value.
    \13\ Sheldon Natenberg, Option Volatility & Pricing 108 (2nd ed.
2015).
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Vega
    Just as option values are sensitive to changes in the underlying
price (delta) and to the passage of time (theta), they are also
sensitive to changes in volatility. Although the terms delta, gamma,
and theta are used by all option traders, there is no one generally
accepted term for the sensitivity of an option's theoretical value to a
change in volatility. The most commonly used term in the trading
community is vega.\14\
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    \14\ Sheldon Natenberg, Option Volatility & Pricing 110 (2nd ed.
2015).
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    The vega of an option is usually expressed as the change in
theoretical value for each one percentage point change in volatility.
Because all options gain value with rising volatility, the vega for
both calls and puts is positive. If an option has a vega of 0.15, for
each percentage point increase (decrease) in volatility, the option
will gain (lose) 0.15 in theoretical value. If the option has a
theoretical value of 3.25 at a volatility of 20 percent, then it will
have a theoretical value of 3.40 at a volatility of 21 percent and a
theoretical value of 3.10 at a volatility of 19 percent.\15\
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    \15\ See id.
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    Options can be traded not only for profits attributable to
movements in the underlying, but also for profits attributable to
changes in other factors such as volatility or the amount of time left
until expiration. An investor may seek exposure to the Greeks (i.e.,
Delta, Gamma, Theta, and Vega) while minimizing exposure to movements
in the price of the underlying by creating a delta neutral position. An
options position could be hedged with options exhibiting a delta that
is opposite to that of the current options holding to maintain a delta
neutral position.
Delta Neutral
    Delta hedging is an options strategy that aims to reduce or hedge,
the risk associated with price movements in the underlying asset.\16\
Strategies that involve creating a delta neutral position are typically
used for one of three main purposes. They can be used to profit from
time decay, or from volatility, or they can be used to hedge an
existing position and protect it against small price movements.\17\
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    \16\ James Chen, Delta Hedging, Investopedia (May 22, 2019),
https://www.investopedia.com/terms/d/deltahedging.asp.
    \17\ Delta Neutral Options Strategies, OptionsTrading.Org,
https://www.optionstrading.org/strategies/other/delta-neutral/.
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    A delta neutral position is one in which the overall delta is
approximately zero, which minimizes the options' price movements in
relation to the underlying asset. For example, assume an investor holds
one call option with a delta of 0.50, which indicates the option is at-
the-money and wishes to maintain a delta neutral position. The investor
could purchase an at-the-money put option with a delta of -0.50 to
offset the positive delta, which would make the position have a delta
of zero, thereby minimizing unwanted exposure to the price of the
underlying and allowing the investor to focus instead on the desired
exposure (i.e., Delta, Gamma, Theta, or Vega).
    An options position could also be delta hedged using shares of the
underlying stock. One share of the underlying stock has a delta of one
as the stock's value changes by $1. For example, assume an investor is
long one call option on a stock with a delta of 0.75--or 75 since
options have a multiplier of 100. In this case, the investor could
delta hedge the call option by selling 75 shares of the underlying
stock.\18\
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    \18\ See supra note 16.
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    Following is an example of a delta neutral stock-option order which
provides the investor volatility exposure.
Example #1
Strategy 1: Buy 8 XYZ May 18 Calls and Sell 100 Shares XYZ
Underlying (25 times)

    Buy 8(25x) XYZ May18 Calls
    Sell 100(25x) Shares XYZ Underlying

    Buy 8 XYZ May 18 Calls (12.5 delta)
    Sell 100 XYZ Shares (100 delta) (where 100 shares of the
underlying = 1 option contract)
    (8 * 12.5 delta) + (-1 * 100 delta)
    +100 delta - 100 delta = 0 delta

    Strategy 1 Position = +200 XYZ May 18 Calls--2500 shares of XYZ
Creation of a Synthetic Underlying Position
    Buying a call on an equity stock and selling a put on an equity
stock, (or selling a call on an equity stock and buying a put on an
equity stock), with the same expiration date and strike price results
in the creation of a synthetic stock position. For example, assume a
call and put for XYZ have a strike price of $15. Buying a call gives
the buyer the right, but not the obligation, to purchase the stock
(XYZ) at the strike price ($15). Selling a put imposes upon the seller
the obligation, (and not just the right), to purchase the stock (XYZ)
at the strike price ($15), should the put be exercised.
    If the stock price of XYZ is greater than the strike price of the
call option ($15) at expiration, the call option may be exercised and
the holder of the call option has the right to purchase XYZ at $15
resulting in a long position of 100 shares of XYZ. If the stock price
of XYZ is greater than the strike price of the put option ($15), the
put expires worthless as the holder of the put can sell shares on the
open market at a price greater than the option's strike price.
    If the stock price of XYZ is less than the strike price of the call
option ($15), the call option expires worthless as it is cheaper to
purchase the stock on the open market. If the stock price of XYZ is
less than the strike price of the put option at expiration, the put
will be exercised and the seller of the put will be obligated to
purchase 100 shares of XYZ.
    The net result is that the combination of buying a call and selling
a put with the same expiration date and strike price results in an
effective (or synthetic) long position of 100 shares of XYZ stock,
regardless of whether the stock price is above or below the strike
price of the call or put option. Similarly, selling the call and buying
the put for the same expiration date and strike price would result in
an effective (or

synthetic) short position of 100 shares of XYZ stock (-100).
    Example #2 below provides an example of a synthetic underlying.
Example #2 (Reversal or Conversion)
Strategy 2: Sell 1 XYZ May 15 Call, Buy 1 XYZ May 15 Put and Buy 100
XYZ Stock (25 times)

    Combination:
    Sell 1(25x) XYZ May 15 Calls
    Buy 1(25x) XYZ May 15 Puts

    Stock:
    Buy 100(25x) shares XYZ Stock

    Sell 1 XYZ May 15 Call (55 delta)
    Buy 1 XYZ May 15 Put (45 delta)
    Buy 100 XYZ shares (100 delta) (where 100 shares of stock = 1
option)
    (-1 * 55 delta) + (1 * -45 delta) + (1 * 100 delta)
    -55 + (-45) + 100 = 0

    Strategy 2 Position = -25 May 15 Calls +25 May 15 Puts + 2500
XYZ Stock
Example #3 (Combining the Positions of Strategy 1 and 2)
Strategy 1 Position: +200 XYZ May 18 Calls - 2500 XYZ Stock
Strategy 2 Position: -25 XYZ May 15 Calls +25 XYZ May 15 Put + 2500
XYZ Stock

    Net Position:
    + 200 XYZ May 18 Calls -25 XYZ May 15 Calls +25 XYZ May 15 Puts

+2500 deltas (200 x 12.5)
-2500 deltas (-25 x 55) + (25 x -45)
------------------------------------------------------------------------
0 net deltas

Combined the equation may be expressed as: (200 x 12.5) + (-25 x 55)
+ (25 x -45) = 0

    The net position that results from combining Strategy 1 from
Example #1 above and Strategy 2 from Example #2 above is a long
position of 200 May 18 Calls--the May 15 Combination 25x (a short
synthetic stock position of 2,500 shares as a result of selling a call
and buying a put with the same expiration date and strike price.) \19\
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    \19\ Strategy 1 and Strategy 2 may currently be entered and
executed on the Exchange under the Exchange's current rules.
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Proposal
    The Exchange now proposes to adopt Interpretation and Policy .07 to
Rule 518, to codify and further facilitate delta neutral hedging for
SPIKES options. Members \20\ on the Exchange that transact in SPIKES
options currently have the ability to submit complex orders which are
delta neutral, so long as the component ratio conforms to the current
rule for complex orders of 1:3/3:1.\21\
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    \20\ 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.
    \21\ See Exchange Rule 518(a)(5).
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    The Exchange now proposes to adopt a definition of a ``SPIKES
Combination'' as a purchase (sale) of a SPIKES call option and the sale
(purchase) of a SPIKES put option having the same expiration date and
strike price. The Exchange also proposes to adopt a definition for
``delta'' as the positive (negative) number of SPIKES Combinations that
must be sold (purchased) to establish a market neutral hedge with one
or more SPIKES option series. Additionally, the Exchange proposes to
adopt a definition for a ``SPIKES Combo Order'' as an order to purchase
or sell one or more SPIKES option series and the offsetting number of
SPIKES Combinations defined by the delta.
    The Exchange proposes to adopt a provision that states for the
purposes of this Rule a SPIKES Combo Order may not have a ratio greater
than eight options to one SPIKES Combination (8:1). The Exchange
proposes to use this ratio as it is already a defined conforming ratio
in the Exchange's System \22\ used for stock-option orders and it will
allow the Exchange to implement the trading of SPIKES Combo Orders in a
fashion similar to stock-option orders. Currently, stock-options may be
traded in a ratio of eight-to-one, where the ratio represents contracts
to the underlying security. Similarly, the Exchange proposes to use the
same ratio for SPIKES Combo Orders where the ratio would represent
contracts to SPIKES Combination Orders. Lastly, the Exchange proposes
to add an internal cross reference to state that SPIKES Combo Orders
will be subject to the same provisions of Rule 518 that complex orders
on the Exchange are subject to, with the exception of the 1:3/3:1 ratio
requirement as described in Rule 518.
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    \22\ 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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    SPIKES options do not have an underlying that can serve as a hedge,
as the option is based on an Index. However, a synthetic underlying
position may be created by purchasing a call and selling a put (or
selling a call and purchasing a put), as discussed above. A SPIKES
Combination Order creates a synthetic underlying position that is the
functional equivalent of the stock leg in stock-option orders.
Therefore, the Exchange proposes to amend the ratio from 1:3/3:1 to 8:1
for SPIKES Combo Orders to align the treatment of these orders to that
of stock-option orders. This will allow for more transactions with
better hedging opportunities.
    Below is an example of a SPIKES delta neutral strategy that
provides the investor exposure to the Greeks that may be created under
the Exchange's proposal to allow SPIKES Combo Orders to leverage the
8:1 ratio afforded stock-option orders.
Example #4
Strategy A: Buy 8 SPIKES May 18 Calls, Sell 1 SPIKES May 15 Call,
and Buy 1 SPIKES May 15 Put (25 times)

    Calls:
    Buy 8(25) SPIKES May 18 Calls

    Combination:
    Sell 1(25) SPIKES May 15 Call
    Buy 1(25) SPIKES May 15 Puts
    Buy 8 SPIKES May 18 Calls (12.5 delta)
    Sell 1 SPIKES May 15 Call (55 delta)
    Buy 1 SPIKES May 15 Put (45 delta)
    (8 * 12.5) + (-1 * 55) + (1 * -45)
    100 - 55 - 45 = 0

    Net Position: + 200 SPIKES May 18 Calls -25 SPIKES May 15 Calls
+25 SPIKES May 15 Puts

+2500 deltas (200 x 12.5)
-2500 deltas (-25 x 55) + (25 x -45)
------------------------------------------------------------------------
0 net delta

Combined the equation may be expressed as: (200 x 12.5) + (-25 x 55)
+ (25 x -45) = 0

    Example #4 illustrates a delta neutral position in SPIKES which is
identical to the net delta neutral position demonstrated in Example #1
for a stock-option order. This position may be accomplished in a single
transaction by using the proposed SPIKES Combo Order which includes a
SPIKES Combination order. The SPIKES Combination order (sell call, buy
put with the same expiration date and strike price) creates the
synthetic underlying position for the SPIKES option, similar to the way
selling the XYZ call and buying the XYZ put creates the synthetic stock
position demonstrated in Example #3.
    Under the Exchange's proposal, SPIKES Combination orders would be
treated similar to the stock-leg component of a stock-option order. As
demonstrated in Example #3 above, the stock leg component of a stock-
option order can be created synthetically by selling a call and buying
a put option with the same expiration date and strike price. The
Exchange proposes to define this transaction as a SPIKES Combination
order and allow SPIKES Combo Orders to be treated similarly to stock-
option orders by permitting these orders to leverage the 8-1 ratio
defined for stock-option orders. The Exchange believes that a ratio
greater than three-

to-one, but not greater than eight-to-one, would allow investors the
opportunity to create additional delta neutral transactions with SPIKES
Index options. Therefore, the Exchange proposes to adopt new rule text
to state that for the purposes of Rule 518 a SPIKES Combo Order may not
have a ratio greater than eight-to-one, in order to facilitate hedging
SPIKES options with SPIKES Combo Orders.
    The Exchange represents that it has the System capacity and
capability to handle the potential increase in transaction rates.
Further, the Exchange represents that it has surveillances in place to
surveil for conduct that violates the Exchange's rules, specifically as
it pertains to delta neutral transactions as described herein.
2. Statutory Basis
    MIAX Options believes that its proposed rule change is consistent
with Section 6(b) of the Act \23\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \24\ 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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    \23\ 15 U.S.C. 78f(b).
    \24\ 15 U.S.C. 78f(b)(5).
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    The Exchange's proposal promotes just and equitable principles of
trade and removes impediments to and perfects the mechanisms of a free
and open market and a national market system and, in general, protects
investors and the public interest, by further facilitating the creation
of delta neutral transactions in SPIKES options. Delta neutral
strategies protect investors and the public interest by providing a
means to gain exposure to other elements related to the price of an
option while reducing the risk associated with changes in the price of
the underlying. Permitting additional delta neutral transactions will
improve liquidity in the marketplace which will benefit all investors.
Additionally, the Exchange's proposal protects investors and the public
interest as all the rules applicable to complex orders on the Exchange
will apply equally to SPIKES Combo Orders, with the exception of the
3:1/1:3 ratio limitation.
    The proposed 8:1 ratio for SPIKES Combo Orders is already a
conforming ratio on the Exchange for stock-option orders. The
Exchange's proposal promotes just and equitable principles of trade and
removes impediments to and perfects the mechanisms of a free and open
market and a national market system and, in general, protects investors
and the public interest, by providing similar hedging capabilities as
afforded stock-option orders.
    Additionally, other exchanges that offer options on index products
provide for the creation of delta neutral strategies.\25\ Providing
investors the ability to create delta neutral transactions similar to
those created on other exchanges reduces investor confusion and in turn
strengthens investor confidence in the marketplace by providing
consistency among exchanges.
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    \25\ See NYSE American Rule 965NY and Cboe Exchange Rule 24.20.
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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. The Exchange's proposal will
not impose any burden on inter-market competition as the Exchange's
proposal is specifically for SPIKES Index options which are a
Proprietary Product \26\ of the Exchange, and are not listed or traded
on any other venue.
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    \26\ The term ``Proprietary Product'' means a class of options
that is listed exclusively on the Exchange and any of its
affiliates. See Exchange Rule 100.
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    The Exchange does not believe the proposed rule change will impose
any burden on intra-market competition as the rules of the Exchange are
applicable to all Members equally. Any Member of the Exchange may trade
SPIKES options and all Members can benefit from the creation of delta
neutral transactions as described in this proposal.
    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.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be 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_ADDRESS>Please include
File Number SR-MIAX-2019-37 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-MIAX-2019-37. 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 (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 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 10:00 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish

to make available publicly. All submissions should refer to File Number
SR-MIAX-2019-37, and should be submitted on or before September 10,
2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-17846 Filed 8-19-19; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: April 28, 2008 (Volume 73, Number 82)]
[Notices]
[Page 22987-22988]
[DOCID:fr28ap08-93]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57696; File No. SR-NASDAQ-2008-034]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Trading Two-Characters Ticker Symbols

April 22, 2008.
    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 April 16, 2008, The NASDAQ Stock Market LLC (``Nasdaq'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I, II, and III below, which Items
have been substantially prepared by Nasdaq. Nasdaq has filed this
proposal pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(5) thereunder,\4\ which renders the proposal effective upon filing
with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(5).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Nasdaq proposes to trade the common stock of CA, Inc. on Nasdaq
using the two-character symbol ``CA.''

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq 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. Nasdaq 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
    Historically, securities listed on Nasdaq have traded using four or
five character symbols.\5\ In 2005, however, Nasdaq announced its
intent to allow companies listed on Nasdaq to also use one, two or
three character symbols beginning on January 31, 2007.\6\ This
announcement was designed to provide market participants and vendors
the time needed to make required changes to their own systems that may
be affected by the change. Since February 20, 2007, Nasdaq has had the
ability to accept and distribute Nasdaq-listed securities with one, two
or three character symbols. Nasdaq reminded market participants about
this change again on March 1, 2007, stressing that ``[a]ll customers
should have completed their coding and testing efforts to ensure their
readiness to support 1-, 2- and 3-character NASDAQ-listed issues'' \7\
and on March 22, 2007, Delta Financial Corporation transferred to
Nasdaq from the American Stock Exchange and maintained its three-
character symbol, DFC.\8\ Subsequently, the Commission approved a rule
change to permit any company to transfer from another exchange to
Nasdaq and maintain its three-character symbols.\9\ In total, 25
companies have done so and there have been no trading problems reported
to Nasdaq as a result of trading securities on Nasdaq with three-
character symbols.
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    \5\ This includes securities listed on Nasdaq's predecessor
market, operated as a facility of the NASD.
    \6\ See Head Trader Alert 2005-133 (November 14, 2005),
available at: http://www.nasdaqtrader.com/
TraderNews.aspx?id=hta2005-133 and Vendor Alert 2005-070 (November
14, 2005), available at: http://www.nasdaqtrader.com/
TraderNews.aspx?id=nva2005-070. See also Head Trader Alert 2006-144
(September 29, 2006), available at: http://www.nasdaqtrader.com/
TraderNews.aspx?id=hta2006-144, Head Trader Alert 2006-193 (November
16, 2006), available at: http://www.nasdaqtrader.com/
TraderNews.aspx?id=hta2006-193 and Vendor Alert 2006-065 (October 4,
2006), available at: http://www.nasdaqtrader.com/
TraderNews.aspx?id=nva2006-065.
    \7\ Head Trader Alert 2007-050 (March 1, 2007), available at:
http://www.nasdaqtrader.com/TraderNews.aspx?id=hta2007-050.
    \8\ See Securities Exchange Act Release No. 55519 (March 26,
2007) 72 FR 15737 (April 2, 2007) (SR-NASDAQ-2007-025).
    \9\ See Securities Exchange Act Release No. 56028 (July 9,
2007), 72 FR 38639 (July 13, 2007) (approving SR-NASDAQ-2007-031).
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    Nasdaq now proposes to allow CA, Inc., which currently trades with
the two-character symbol ``CA'' to transfer its common stock to Nasdaq
from another domestic market and continue using that two-character
symbol. Nasdaq believes that allowing this company to maintain its
symbol will reduce investor confusion and promote competition among
exchanges. Specifically, allowing CA to maintain its trading symbol
will reduce investor confusion associated with its transfer to Nasdaq
because investors will continue to be able to obtain quotations and
execute trades using the same familiar symbol and will allow the issuer
to maintain a symbol that has become a part of its identity to
investors.\10\ Nasdaq also notes that the potential for confusion from
a symbol change could be magnified in this case, given that the
company's name and current trading symbol are identical. Further,
Nasdaq believes that permitting CA to maintain its symbol will enhance
competition among exchanges by removing concerns about investor
confusion surrounding its symbol from the factors a company must
consider when choosing where to list its equities. This proposal is
also consistent with the historical practice of allowing companies to
maintain their symbols when they switch among national securities
exchanges.\11\
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    \10\ A market transfer will still be transparent to investors
because, under the Commission's rules, a company must announce the
transfer of its listing on a Form 8-K. See Form 8-K, item 3.01(d).
In addition, the issuer must publish notice of its intent to
withdraw a class of securities from listing and/or registration,
along with its reasons for such withdrawal, via a press release and,
if it has a publicly accessible Web site, on that Web site. See Rule
12d2-2(c)(2)(iii), 17 CFR 240.12d2-2(c)(2)(iii).
    \11\ See, e.g., Darwin Professional Underwriters, Inc. (from
NYSE Arca to NYSE keeping the symbol DR), Chile Fund, Inc. (from
NYSE to Amex keeping the symbol CH), and iShares NYSE 100 (from NYSE
to NYSE Arca keeping the symbol NY).
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    Given the foregoing, Nasdaq believes that market participants were
provided adequate notice of this change and are prepared to accommodate
the trading of this company on Nasdaq using the symbol CA. Further,
Nasdaq believes that any change to the symbol will cause confusion
among investors and market participants. As such, Nasdaq proposes to
begin trading the common stock of CA, Inc. on Nasdaq using the symbol
CA on April 28, 2008. While this filing relates to the transfer of this
issuer, Nasdaq remains committed to working with the Commission and
other markets to establish an equitable and transparent symbol
assignment plan.\12\
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    \12\ See Securities Exchange Act Release No. 56037 (July 10,
2007) 72 FR 39096 (July 17, 2007).

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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act, in general and with Section
6(b)(5) 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, remove impediments to a free and open
market and a national market system, and, in general, to protect
investors and the public interest. As described above, the proposed
rule change will reduce investor confusion and encourage competition
between national securities exchanges.

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.

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 foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(5) thereunder \14\ in
that it effects a change to an order-entry or trading system that: (i)
Does not significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) does not have the effect of limiting the access to or
availability of the system. As such, this proposed rule change is
effective upon filing with the Commission.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(5).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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.

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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2008-034 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2008-034. This
file number should be included on the subject line if e-mail 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 inspection
and copying 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 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-NASDAQ-2008-034 and should
be submitted on or before May 19, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-9188 Filed 4-25-08; 8:45 am]

BILLING CODE 8010-01-P