[Federal Register Volume 78, Number 131 (Tuesday, July 9, 2013)]
[Notices]
[Pages 41158-41161]
[FR Doc No: 2013-16380]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69916; File No. SR-CBOE-2013-065]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the CBOE Stock Exchange Fees Schedule

July 2, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 24, 2013, Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'') the 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 the
Substance of the Proposed Rule Change

    The Exchange proposes to amend the Fees Schedule of its CBOE Stock
Exchange. The text of the proposed rule change is available on the
Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, 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 the CBSX Fees Schedule. First, CBSX
proposes to establish a separate fees structure for transactions in
AMD, BAC, MU, NOK and SIRI (the ``Select Symbols'') that is different
than the fees for transactions in all other symbols (all fees discussed
in this proposed rule change apply to transactions in securities priced
$1 or greater; CBSX does not propose to amend any fees for transactions
in securities priced less than $1). Currently, transactions in all
securities (including the Select Symbols) are subject to the following
fees structure:

----------------------------------------------------------------------------------------------------------------
                       Execution type                                                Rate
----------------------------------------------------------------------------------------------------------------
Maker (adds less than 0.08% of TCV of liquidity in one day)  $0.0018 per share.
 (1)(5).
Maker (adds at least 0.08% but less than 0.16% of TCV of     $0.0017 per share.
 liquidity in one day) (1)(5).
Maker (adds at least 0.16% but less than 0.24% of TCV of     $0.0016 per share.
 liquidity in one day) (1)(5).
Maker (adds at least 0.24% but less than 0.42% of TCV of     $0.0015 per share.
 liquidity in one day) (1)(5).
Maker (adds 0.42% or more of TCV of liquidity in one day)    $0.0014 per share.
 (1)(5).
Taker (removes 9,999,999 shares or less of liquidity in one  $0.0015 rebate per share.
 day (1) or less than 85% Execution Rate).
Taker (removes 10,000,000 shares or more of liquidity in     $0.0017 rebate per share.
 one day (1) and equal to or greater than 85% Execution
 Rate).
Maker (adds liquidity using a silent order)................  $0.0018 per share.
Taker (removes silent order liquidity).....................  $0.0014 rebate per share.
Maker (adds liquidity using a silent-mid or silent-post-mid  $0.0008 per share.
 order).
Taker (removes silent-mid or silent-post-mid liquidity)....  $0.0004 rebate per share.
----------------------------------------------------------------------------------------------------------------

    CBSX hereby proposes to except the Select Symbols out of this
structure. Instead, CBSX proposes to assess a fee of $0.0050 per share
for Maker transactions in the Select Symbols (including to a Maker who
adds liquidity using a silent, silent-mid or silent-post-mid order) and
provide a rebate of $0.0045 per share for Taker transactions in the
Select Symbols (including to a Taker who removes silent, silent-mid or
silent-post-mid liquidity). CBSX proposes this change due to the
liquidity profiles of the Select Symbols. The NBBO market width in the
Select Symbols is most often $0.01, and the proposed fee and rebate
structure for the Select Symbols is designed to get close to
synthesizing a midpoint between the NBBO. For example, say the market
in a select symbol is 3.15-3.16. In the case of the proposed pricing in
the Select Symbols, a participant would be able to buy the displayed
offer at 3.16 and receive a $0.0045 rebate per share, which is similar
to the economics of a midpoint execution. The ``Select Symbols'' will
be defined in the proposed new Footnote 6 to the Fees Schedule.
    CBSX does not propose to amend fees for all other symbols (all
symbols except for the Select Symbols), with the exception of fees and
rebates related to silent, silent-mid and silent-post-mid orders.
Currently, CBSX provides a rebate of $0.0014 per share for Taker orders
that remove silent order liquidity, and $0.0004 per share for Taker
orders that remove silent-mid or silent-post-mid liquidity. CBSX
proposes to increase these rebates to $0.0015 per share. This
normalizes the Taker rebate for orders that remove silent, silent-mid,
or silent-post-mid liquidity with the regular Taker rebate (for a Taker
who removes 9,999,999 shares of liquidity in one day or less than 85%
Execution Rate). In conjunction with this rebate increase, CBSX
proposes to increase the fee for a Maker that adds liquidity using a
silent-mid or silent-post-mid order to $0.0018 per share in order to
help offset the increases in the rebate for Taker orders that remove
silent, silent-mid, or silent-post-mid liquidity. The fee for a Maker
that adds liquidity using a silent order is already $0.0018 per share.
    The proposed changes are to take effect on July 1, 2013.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\3\ Specifically, the Exchange believes the proposed rule change is
consistent with Section 6(b)(4) of the Act,\4\ which requires that
Exchange rules provide for the equitable allocation of reasonable dues,
fees, and other charges among its Trading Permit Holders and other
persons using its facilities. The Exchange believes that the proposed
fees and rebates for the Select Symbols are reasonable because the
amount of the proposed Maker fee is merely $0.0005 greater than the
amount of the proposed Taker rebate, and because the NBBO market width
in the Select Symbols in the Select Symbols is often $0.01, and the
proposed fee and rebate structure for the Select Symbols is designed to
get close

to synthesizing a midpoint between the NBBO. The Exchange notes that
the proposed fees for the Select Symbols do not violate the limitation
on access fees described in Rule 610 of Regulation NMS as the $0.0050
per share proposed fee is a Maker fee, and Rule 610(c)(1)'s prohibition
of fees greater than $0.0030 applies to orders that execute against a
quotation (Taker orders).\5\
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4).
    \5\ 17 CFR 242.610. The relevant section of Rule 610(c) states:
``(c) Fees for access to quotations. A trading center shall not
impose, nor permit to be imposed, any fee or fees for the execution
of an order against a protected quotation of the trading center or
against any other quotation of the trading center that is the best
bid or best offer of a national securities exchange, the best bid or
best offer of The Nasdaq Stock Market, Inc., or the best bid or best
offer of a national securities association other than the best bid
or best offer of The Nasdaq Stock Market, Inc. in an NMS stock that
exceed or accumulate to more than the following limits: (1) If the
price of a protected quotation or other quotation is $1.00 or more,
the fee or fees cannot exceed or accumulate to more than $0.003 per
share;''
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    The Exchange believes that offering a different fee and rebate
structure for the Select Symbols is equitable and not unfairly
discriminatory because the liquidity profiles of the Select Symbols are
different from those for other symbols. The NBBO market width in the
Select Symbols in the Select Symbols is often $0.01, and the proposed
fee and rebate structure for the Select Symbols is designed to get
close to synthesizing a midpoint between the NBBO. Further, the
proposed fee and rebate structure for the Select Symbols is intended to
incentivize the trading on the Select Symbols. Finally, the proposed
fees and rebates for the Select Symbols will apply equally to all
market participants.
    The Exchange believes that it is reasonable to increase, for all
other symbols, the rebate for a Taker who removes silent order
liquidity from $0.0014 per share to $0.0015 per share and for a Taker
who removes silent-mid or silent-post-mid liquidity from $0.0004 per
share to $0.0015 per share because this will allow such Takers to
receive a greater rebate for such activity. The Exchange believes this
is equitable and not unfairly discriminatory because it will set the
rebate for a Taker who removes silent order liquidity and silent-mid or
silent-post-mid liquidity at the same amount, as well as the same
amount as the regular Taker rebate (for a Taker who removes 9,999,999
shares of liquidity in one day or less than 85% Execution Rate).
Further, this rebate will apply equally for all market participants.
    The Exchange believes that it is reasonable to increase, for all
other symbols, the fee for a Maker who adds liquidity using a silent-
mid or silent-post-mid order to $0.0018 per share because this amount
is within the range of other Maker fees assessed by CBSX. Further, this
increase is necessary in order to offset the above-mentioned increase
in the rebate for a Taker who removes silent-mid or silent-post-mid
liquidity. CBSX believes that this increase is equitable and not
unfairly discriminatory because it will make the amount of the fee for
a Maker who adds liquidity using a silent-mid or silent-post-mid order
the same as the amount of the fee for a Maker who adds liquidity using
a silent order. Further, this fee will apply equally for all market
participants.

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

    CBSX does not believe that the proposed rule change will impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act because the proposed changes
apply to all CBSX market participants. CBSX does not believe that the
proposed rule change will impose any burden on intermarket competition
because these changes apply solely to trading on CBSX. To the extent
that the proposed new fees structure for the Select Symbols or the
changes to fees and rebates for orders involving silent, silent-mid and
silent-post-mid liquidity may make CBSX a more attractive trading venue
for market participants on other exchanges, such market participants
may elect to become CBSX market participants. Indeed, these changes may
enhance competition by encouraging other exchanges to amend their fees
to provide more attractive fees and rebate structures for their market
participants.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the
proposed rule change.

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 \6\ and paragraph (f) of Rule 19b-4 \7\
thereunder. 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 will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f).
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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-CBOE-2013-065 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-CBOE-2013-065. 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 20549-1090, 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-
CBOE-2013-065, and should be submitted on or before July 30, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-16380 Filed 7-8-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 10 (Tuesday, January 16, 2018)]
[Rules and Regulations]
[Pages 2060-2062]
[FR Doc No: 2018-00611]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2017-0868]
RIN 1625-AA09

Drawbridge Operation Regulation; Isthmus Slough, Coos Bay, OR

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is temporarily modifying the operating
schedule that governs the Oregon State secondary highway bridge
(Isthmus Slough Bridge), across Isthmus Slough, mile 1.0, at Coos Bay,
OR. To accommodate Oregon Department of Transportation's (ODOT)
preservation, painting and replacement of the bridge equipment, ODOT
will operate half the double bascule span (single leaf). Additionally,
during the period of this work, the non-functioning leaf of the span's
vertical clearance will be reduced.

DATES: This temporary final rule is effective from 6 a.m. on February
26, 2018 to 6 p.m. on July 31, 2019.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov. Type USCG-
2017-0868 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rulemaking.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Steven M. Fischer, Bridge Administrator, Thirteenth Coast
Guard District Bridge Program Office, telephone<PHONE_NUMBER>; email
[email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
Pub. L. Public Law
ODOT Oregon Department of Transportation
Sec.  Section
U.S.C. United States Code

II. Background, Purpose and Legal Basis

    On October 24, 2017, we published a notice of proposed rulemaking
(NPRM) entitled Drawbridge Operation Regulation; Isthmus Slough, Coos
Bay, OR, in the Federal Register (82 FR 49153). We received no comments
on this rule. ODOT owns and operates the double bascule Isthmus Slough
Bridge, across Isthmus Slough, mile 1.0, at Coos Bay, OR. The operating
regulation has been temporarily modified to accommodate ODOT's
painting, preservation, and upgrading of the bridge electrical systems.
Isthmus Slough provides no alternate routes to pass around the Isthmus
Slough Bridge. To facilitate this event, ODOT will operate the double
bascule bridge in single leaf mode (half of the span), and reduce the
vertical clearance of the non-functioning leaf. Up to ten feet of
containment will be installed under the non-functioning leaf only, and
will reduce the vertical clearance to 18 feet. Vessels that do not
require an opening may transit under the bridge at any time. We
approved a temporary deviation on August 4, 2017 (82 FR 36332), with
the same change in bridge operations as this rule change. We have not
received any reports of problems or complaints with the subject bridge
operating under the temporary deviation.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority 33 U.S.C. 499.
Isthmus Slough Bridge, across Isthmus Slough, mile 1.0, at Coos Bay,
OR, is a double bascule drawbridge, and provides a vertical clearance
of 28 feet in the closed-to-navigation position referenced to the
vertical clearance above mean high water tide level. ODOT cannot
complete scheduled maintenance and equipment upgrades unless the
operating schedule for the subject bridge is changed.

    We approved a temporary deviation for this event, but later learned
180 days will not be enough time to complete the work. This temporary
rule change to 33 CFR 117.879 will allow ODOT time to complete their
scheduled maintenance and equipment upgrades. This temporary rule
suspends the current paragraph regarding the Isthmus Slough Bridge, and
adds a temporary new paragraph which amends the operating schedule of
the Isthmus Slough Bridge by authorizing one half of the draw to open
on signal, and reduces the horizontal clearance and vertical clearance
of the bridge. The temporary rule is necessary to accommodate painting,
preservation, and upgrading of its electrical systems. One half of the
double bascule bridge will have a containment system installed on the
non-functioning half of the span, and therefore reduces the vertical
clearance by ten feet to 18 feet. The horizontal clearance with a full
opening is 140 feet. In single leaf operation, the horizontal clearance
is reduced to approximately 70 feet.

IV. Discussion of Comments, Changes and the Temporary Final Rule

    We published a NPRM in October 2017 with a 30 day comment period,
and did not receive any comments. We approved this temporary rule
change to 33 CFR 117.879 to be in effect from 6 a.m. on February 26,
2018, through 6 p.m. on July 31, 2019. This temporary rule authorizes
ODOT to operate the Isthmus Slough Bridge one half of the draw on
signal if at least 24 hours notice is given to the bridge operator, and
reduce the horizontal clearance and vertical clearance of the bridge.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive Orders related to rulemaking. Below we summarize our analyses
based on a number of these statutes and Executive Orders, and we
discuss First Amendment rights of protesters.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13771 directs agencies to control
regulatory costs through a budgeting process. This rule has not been
designated a ``significant regulatory action,'' under Executive Order
12866. Accordingly, it has not been reviewed by the Office of
Management and Budget (OMB) and pursuant to OMB guidance it is exempt
from the requirements of Executive Order 13771. This regulatory action
determination is based on the ability for mariners to transit under the
bridge because the Isthmus Slough Bridge can open half the draw
allowing for the reasonable needs of navigation.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard received no comments from the Small Business
Administration on this rule. The Coast Guard certifies under 5 U.S.C.
605(b) that this rule will not have a significant economic impact on a
substantial number of small entities. While some owners or operators of
vessels intending to transit the bridge may be small entities, for the
reasons stated in section VI.A above, this rule would not have a
significant economic impact on any vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Public Law 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction, and you
have questions concerning its provisions or options for compliance,
please contact the person listed in the FOR FURTHER INFORMATION
CONTACT, above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

    This rule calls for no new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Government

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes. We
received no (0) comments in the NPRM for this section.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble. We received no (0) comments in the NPRM for this
section.

F. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guides the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a
determination that this action is one of a category of actions which do
not individually or cumulatively have a significant effect on the human
environment. This rule simply promulgates the operating regulations or
procedures for drawbridges. This action is categorically excluded from
further review, under figure 2-1, paragraph (32) (e), of the
Instruction. A Record of Environmental

Consideration and a Memorandum for the Record are not required for this
rule.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the ``For Further
Information Contact'' section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

List of Subjects in 33 CFR Part 117

    Bridges.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 117 as follows:

PART 117--DRAWBRIDGE OPERATION REGULATIONS

0
1. The authority citation for part 117 continues to read as follows:

    Authority: 33 U.S.C. 499; 33 CFR 1.05-1; and Department of
Homeland Security Delegation No. 0170.1.

Sec.  117.879   [Suspended]

0
2. Suspend Sec.  117.879 effective 6 a.m. on February 26, 2018, through
6 p.m. on July 31, 2019.

0
3. Add temporary Sec.  117.T879, effective 6 a.m. on February 26, 2018,
through 6 p.m. on July 31, 2019, to read as follows:

Sec.  117.T879  Isthmus Slough.

    The draw of the Oregon State secondary highway bridge, mile 1.0, at
Coos Bay, shall operate in single leaf, and open half the draw on
signal if at least 24 hours notice is given. The vertical clearance of
the non-functioning leaf will be reduced up to ten feet.

David G. Throop,
Rear Admiral, U.S. Coast Guard, Commander, Thirteenth Coast Guard
District.
[FR Doc. 2018-00611 Filed 1-12-18; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register Volume 88, Number 29 (Monday, February 13, 2023)]
[Rules and Regulations]
[Page 9191]
[FR Doc No: 2023-02990]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket No. USCG-2023-0117]

Special Local Regulation; Marine Events Within the Eleventh Coast
Guard District--Mark Hahn Memorial 300 Mile PWC Endurance Race.

AGENCY: Coast Guard, DHS.

ACTION: Notification of enforcement of regulation.

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SUMMARY: The Coast Guard will enforce the Mark Hahn Memorial 300 Mile
Personal Watercraft (PWC) Endurance Race special local regulation on
the waters of Lake Havasu, Arizona from February 25 through February
26, 2023. This special local regulation is necessary to provide for the
safety of the participants, crew, sponsor vessels, and general users of
the waterway. During the enforcement period, persons and vessels are
prohibited from entering, transiting through, or anchoring within this
regulated area unless authorized by the Captain of the Port, or his
designated representative.

DATES: The regulations in 33 CFR 100.1102 will be enforced from 7 a.m.
until 6 p.m., each day from February 25, 2023, through February 26,
2023, for the location described in item no. 14 in table 1 to Sec.
100.1102.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
notification of enforcement, call or email Lieutenant Junior Grade
Shera Kim, Waterways Management, U.S. Coast Guard Sector San Diego, CA;
telephone<PHONE_NUMBER>, email [email protected].

SUPPLEMENTARY INFORMATION: The Coast Guard will enforce the special
local regulations in 33 CFR 100.1102 for the Mark Hahn Memorial 300
Mile PWC Endurance Race on Lake Havasu, AZ for the location described
in table 1 to Sec.  100.1102, item no. 14 of that section, from 7 a.m.
to 6 p.m. on February 25, 2023 through February 26, 2023. This action
is being taken to provide for the safety of life on the navigable
waterway during the race. Our regulation for recurring marine events on
the Colorado River, between Davis Dam (Bullhead City, Arizona) and
Headgate Dam (Parker, Arizona), Sec.  100.1102, table 1 to Sec.
100.1102, item no. 14, specifies the location of the regulated area for
the Mark Hahn Memorial 300 PWC Endurance Race, which encompasses
portions of Lake Havasu. Under the provisions of Sec.  100.1102,
persons and vessels are prohibited from entering, transiting through,
or anchoring within this regulated area unless authorized by the
Captain of the Port, or his designated representative. The Coast Guard
may be assisted by other Federal, State, or local law enforcement
agencies in enforcing this regulation.
    In addition to this document in the Federal Register, the Coast
Guard will provide the maritime community with advance notification of
this enforcement period via the Local Notice to Mariners and local
advertising by the event sponsor.
    If the Captain of the Port Sector San Diego or his designated
representative determines that the regulated area need not be enforced
for the full duration stated on this document, he or she may use a
Broadcast Notice to Mariners or other communications coordinated with
the event sponsor to grant general permission to enter the regulated
area.

    Dated: February 7, 2023.
J.W. Spitler,
Captain, U.S. Coast Guard, Captain of the Port San Diego.
[FR Doc. 2023-02990 Filed 2-10-23; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 84, Number 56 (Friday, March 22, 2019)]
[Notices]
[Pages 10848-10854]
[FR Doc No: 2019-05461]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85345; File No. SR-EMERALD-2019-13]

Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 518, Complex Orders

March 18, 2019.
    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 March 6, 2019, MIAX Emerald, LLC (``MIAX Emerald'' or ``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 implement identical functionality currently
operative on one of the Exchange's affiliates, Miami International
Securities Exchange, LLC (``MIAX Options'').
    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/emerald at MIAX
Emerald'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 518, Complex Orders,
to implement stock-option trading on the Exchange in an identical
fashion, and with an identical rule, as MIAX Options.\3\ MIAX Emerald
commenced operations as a national securities exchange registered under
Section 6 of the Act \4\ on March 1, 2019. As described more fully in
MIAX Emerald's Form 1 application,\5\ the Exchange is an affiliate of
Miami International Securities Exchange, LLC (``MIAX Options'') and
MIAX PEARL, LLC (``MIAX PEARL''). MIAX Emerald Rules, in their current
form, were filed as Exhibit B to its Form 1 on August 16, 2018. At that
time stock-option orders as described in MIAX Options Rule 518 were
being implemented on the MIAX Options Exchange and MIAX Options Rule
518 was undergoing revisions to support the implementation and trading
of stock-option orders, therefore the revised MIAX Options rule \6\ was
not included in the Exchange's Form 1 filing. In order to ensure
consistent operation of both MIAX Emerald and MIAX Options through
having consistent rules, the Exchange now proposes to amend the MIAX
Emerald Rule as described below.
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    \3\ See MIAX Options Exchange Rule 518.
    \4\ 15 U.S.C. 78f.
    \5\ See Securities Exchange Act Release No. 84891 (December 20,
2018), 83 FR 67421 (December 28, 2018) (File No. 10-233) (order
approving application of MIAX Emerald, LLC for registration as a
national securities exchange.)
    \6\ See Securities Exchange Act Release No. 83726 (July 27,
2018), 83 FR 37849 (August 2, 2018) (SR-MIAX-2018-16).
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Proposal
    Complex orders began trading on MIAX Options on October 24,
2016.\7\ In its rule filing to establish the trading of complex orders,
MIAX Options adopted rules for handling stock-option orders.\8\ MIAX
Options filed SR-MIAX-2018-16 \9\ to update its rule text regarding
stock-option orders in connection with the launch of such orders on the
MIAX Options Exchange. MIAX Emerald now proposes to amend Exchange Rule
518, to adopt the identical provisions from the MIAX Options rulebook
for handling stock-option orders that are currently in place on MIAX
Options, in order to align stock-option trading on MIAX Emerald to MIAX
Options.
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    \7\ See MIAX Options Regulatory Circular 2016-43, October 20,
2016.
    \8\ See Securities Exchange Act Release No. 79072 (October 7,
2016), 81 FR 71131 (October 14, 2016) (SR-MIAX-2016-26).
    \9\ See supra note 6.
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    In particular, the Exchange is proposing to (i) amend the
definition of complex orders to add a stock-option order definition;
(ii) amend the definition of Displayed Complex MIAX Emerald Best Bid or
Offer (``dcEBBO'') and Implied Complex MIAX Emerald Best Bid or Offer
(``icEBBO'') to add the stock-option order provision; (iii) amend
subsection (b)(3) Complex Order Priority, to describe order priority
handling for a stock-option order that has only one leg; (iv) adopt
Interpretation and Policy .01 to Rule 518 titled, Special Provisions
Applicable to Stock-Option Orders, to provide additional detail
regarding the trading and regulation of stock-option orders on the
Exchange; and (v) make certain minor clarifying edits to existing rule
text.
    A ``complex order'' is currently defined in Exchange Rule 518 as
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),\10\ 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. Mini-options may only be part of a
complex order that includes other mini-options.\11\ Only those complex
orders in the classes designated by the Exchange and communicated to
Members \12\ via Regulatory Circular with no more than the applicable
number of legs, as determined by the Exchange on a class-by-class basis
and communicated to Members via Regulatory Circular, are eligible for
processing.
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    \10\ The different options in the same underlying security that
comprise a particular complex order are referred to as the ``legs''
or ``components'' of the complex order throughout this proposal.
    \11\ This definition is consistent with other options exchanges.
See e.g., CBOE Rule 6.53C(a)(1). See also PHLX Rule 1098(a)(i); NYSE
MKT Rule 900.3NY(e); and BOX Rule 7240(a)(5).
    \12\ 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.
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    The Exchange now proposes to update the definition of a complex
order to include stock-option orders. The proposed text will state
that, a complex order can also be a ``stock-option order'' as described
further, and subject to the limitations set forth in proposed
Interpretation and Policy .01 of Rule 518. 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 in the option leg to the
total number of units of the underlying security or convertible
security in the stock leg. Only those stock-option orders in the
classes designated by the Exchange and communicated to Members via
Regulatory Circular with no more than the applicable number of legs as
determined by the Exchange on a class-by-class basis and communicated
to Members via Regulatory Circular, are eligible for processing.
    The Displayed Complex MIAX Emerald Best Bid or Offer (``dcEBBO'')
is calculated using the best displayed price for each component of a
complex strategy from the Simple Order Book. The Exchange proposes to
update the definition of the dcEBBO to include stock-option orders and
proposes to append the following sentence to the existing definition,
``For stock-option orders, the dcEBBO for a complex strategy will be
calculated using the Exchange's best displayed bid or offer in the
individual option component(s) and the NBBO in the stock component.''
    The Implied Complex MIAX Emerald Best Bid or Offer (``icEBBO'') is
a calculation that uses the best price from the Simple Order Book for
each

component of a complex strategy including displayed and non-displayed
trading interest. The Exchange now proposes to update the definition of
the icEBBO to include stock-option orders by appending the following
sentence to the end of the current definition, ``For stock-option
orders, the icEBBO for a complex strategy will be calculated using the
best price (whether displayed or non-displayed) on the Simple Order
Book \13\ in the individual option component(s), and the national best
bid or offer (``NBBO'') in the stock component.''
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    \13\ The ``Simple Order Book'' is the Exchange's regular
electronic book of orders and quotes. See Exchange Rule 518(a)(15).
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    Current Rule 518(c), Trading of Complex Orders and Quotes,
describes the manner in which complex orders will be handled and traded
on the Exchange. The Exchange will determine and communicate to Members
via Regulatory Circular which complex order origin types (i.e., non-
broker-dealer customers, broker-dealers that are not Market Makers on
an options exchange, and/or Market Makers on an options exchange) are
eligible for entry onto the Strategy Book.\14\ The rule also states
that complex orders will be subject to all other Exchange Rules that
pertain to orders generally, unless otherwise provided in Rule 518(b).
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    \14\ See Rule 518(c). See also CBOE Rule 6.53C(c)(i), which
states that CBOE will determine which classes and which complex
order origin types (i.e., non-broker-dealer public customer, broker-
dealers that are not Market-Makers or specialists on an options
exchange, and/or Market-Makers or specialists on an options
exchange) are eligible for entry into the Complex Order Book.
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    Current Rule 518(c)(2)(iii), Legging, provides that complex orders
up to a maximum number of legs (determined by the Exchange on a class-
by-class basis as either two or three legs and communicated to Members
via Regulatory Circular) may be automatically executed against bids and
offers on the Simple Order Book for the individual legs of the complex
order (``Legging''), provided that the execution price of each
component is not executed at a price that is outside of the NBBO. The
current rule also provides that legging is not available for cAOC
orders, complex Standard quotes, or complex eQuotes. The Exchange now
proposes to amend this sentence to provide that legging is not
available for cAOC orders, complex Standard quotes, complex eQuotes, or
stock-option orders.
    Current Rule 518(c)(3), Complex Order Priority, describes how the
System \15\ will establish priority for complex orders. The complex
order priority structure is based generally on the same approach and
structure currently effective on MIAX Emerald respecting priority of
orders and quotes in the simple market as established in Exchange Rule
514.\16\ A complex order may be executed at a net credit or debit price
with one other Member without giving priority to bids or offers
established in the marketplace that are no better than the bids or
offers comprising such net credit or debit; provided, however, that if
any of the bids or offers established in the marketplace consist of a
Priority Customer Order, at least one leg of the complex order must
trade at a price that is better than the corresponding bid or offer in
the marketplace by at least a $0.01 increment.\17\ The Exchange now
proposes to amend Rule 518(c)(3)(i) to now include stock-option orders
to the circumstances described above, if a stock-option order has one
option leg, such option leg has priority over bids and offers
established in the marketplace by Professional Interest (as defined in
Rule 100) \18\ and Market Makers with priority quotes \19\ that are no
better than the price of the options leg, but not over such bids and
offers established by Priority Customer Orders. If a stock-option order
has more than one option leg, such option legs may be executed in
accordance with Rule 518(c)(3)(i).
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    \15\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
    \16\ Exchange Rule 514, Priority of Quotes and Orders, describes
among other things the various execution priority, trade allocation
and participation guarantees generally applicable to the Simple
Order Book. Some sections of Exchange Rule 514 are cross-referenced
herein and will apply as noted to complex orders, as the context
requires.
    \17\ See Rule 518(c)(3). See also, ISE Rule 722(b)(2), which
states that in this situation at least one leg must trade at a price
that is better by at least one minimum trading increment, and PHLX
Rule 1098(c)(iii), requiring in this situation that at least one
option leg is executed at a better price than the established bid or
offer for that option contract and no option leg is executed at a
price outside of the established bid or offer for that option
contract.
    \18\ The term ``Professional Interest'' means (i) an order that
is for the account of a person or entity that is not a Priority
Customer or (ii) an order or non-priority quote for the account of a
Market Maker. See Exchange Rule 100.
    \19\ See Exchange Rule 517(b)(1).
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Stock-Option Orders
    The Exchange proposes to adopt Interpretation and Policy .01,
Special Provisions Applicable to Stock-Option Orders, to provide detail
regarding the trading and regulation of stock-option orders on the
Exchange.
    The Exchange proposes to adopt new subsection (a) to Interpretation
and Policy .01, to provide that stock-option orders may be executed
against other stock-option orders through the Strategy Book and Complex
Auction. Stock-option orders will not be legged against the individual
component legs, and the System will not generate a derived order based
upon a stock-option order. A stock-option order shall not be executed
on the System unless the underlying security component is executable at
the price(s) necessary to achieve the desired net price.
    Members may only submit stock-option orders if such orders comply
with the Qualified Contingent Trade Exemption from Rule 611(a) of
Regulation NMS \20\ under the Act. Members submitting such complex
orders represent that such orders comply with the Qualified Contingent
Trade Exemption.
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    \20\ 17 CFR 242.611(a).
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    To participate in stock-option order processing, a Member must give
up a Clearing Member previously identified to, and processed by the
Exchange as a Designated Give Up for that Member in accordance with
Exchange Rule 507 and which has entered into a brokerage agreement with
one or more Exchange-designated broker-dealers that are not affiliated
with the Exchange to electronically execute the underlying security
component of the stock-option order at a stock trading venue selected
by the Exchange-designated broker-dealer on behalf of the Member.
    The Exchange proposes to adopt new subsection (b), Process, to,
Interpretation and Policy .01 to provide that when a stock-option order
is received by the Exchange, the System will validate that the stock-
option order has been properly marked as required by Rule 200 of
Regulation SHO under the Act (``Rule 200'').\21\ Rule 200 requires all
broker-dealers to mark sell orders of equity securities as ``long,''
``short,'' or ``short exempt.'' Accordingly, Members submitting stock-
option orders must mark the underlying security component (including
ETF) ``long,'' ``short,'' or ``short exempt'' in compliance with Rule
200. If the stock-option order is not so marked, the order will be
rejected by the System. Likewise, any underlying security component of
a stock-option order sent by the Exchange to the Exchange-designated
broker-dealer shall be marked ``long,'' ``short,'' or ``short exempt''
in the same manner in which it was received by the Exchange from the
submitting Member.
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    \21\ 17 CFR 242.200.
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    If the stock-option order is properly marked, the System will
determine whether the stock-option order is Complex Auction-eligible.
If the stock-option order is Complex Auction-

eligible, the System will initiate the Complex Auction Process
described in paragraph (d) of this Rule. Any stock-option order
executed utilizing the Complex Auction Process will comply with the
requirements of Rule 201 of Regulation SHO under the Act (``Rule 201'')
\22\ as discussed further below.
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    \22\ 17 CFR 242.201.
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    When the short sale price test in Rule 201 is triggered for a
covered security,\23\ a ``trading center,'' \24\ such as the Exchange,
an Exchange-designated broker-dealer, or a stock trading venue, as
applicable, must comply with Rule 201. Rule 201 requires a trading
center to establish, maintain, and enforce written policies and
procedures reasonably designed to prevent the execution or display of a
short sale order of a covered security at a price that is less than or
equal to the current national best bid \25\ if the price of that
covered security decreases by 10% or more from the covered security's
closing price as determined by the listing market \26\ for the covered
security as of the end of regular trading hours on the prior day; \27\
and impose these requirements for the remainder of the day and the
following day when a national best bid for the covered security is
calculated and disseminated on a current and continuing basis by a plan
processor pursuant to an effective national market system plan.\28\ A
trading center such as the Exchange, an Exchange-designated broker-
dealer and a stock trading venue, as applicable, on which the
underlying security component is executed, must also comply with Rule
201(b)(1)(iii)(B),\29\ which provides that a trading center must
establish, maintain, and enforce written policies and procedures
reasonably designed to permit the execution or display of a short sale
order of a covered security marked ``short exempt'' \30\ without regard
to whether the order is at a price that is less than or equal to the
current national best bid.\31\
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    \23\ For purposes of this proposal, the term ``covered
security'' shall have the same meaning as in Rule 201(a)(1) of
Regulation SHO. The term ``covered security'' is defined in Rule
201(a)(1) as any NMS stock as defined in Rule 600(b)(47) of
Regulation NMS. See also 17 CFR 242.600(b)(47).
    \24\ Rule 201(a)(9) states that the term ``trading center''
shall have the same meaning as in Rule 600(b)(78). Rule 600(b)(78)
of Regulation NMS defines a ``trading center'' as ``a national
securities exchange or national securities association that operates
an SRO trading facility, an alternative trading system, an exchange
market maker, an OTC market maker, or any other broker or dealer
that executes orders internally by trading as principal or crossing
orders as agent.'' See 17 CFR 242.600(b)(78). The definition
encompasses all entities that may execute short sale orders. Thus,
Rule 201 will apply to any entity that executes short sale orders.
    \25\ The term ``national best bid'' is defined in Rule
201(a)(4). 17 CFR 242.201(a)(4).
    \26\ The term ``listing market'' is defined in Rule 201(a)(3).
17 CFR 242.201(a)(3).
    \27\ 17 CFR 242.201(b)(1)(i).
    \28\ 17 CFR 242.201(b)(1)(ii).
    \29\ 17 CFR 242.201(b)(1)(iii)(B).
    \30\ 17 CFR 242.200(g)(2).
    \31\ Since the underlying security component of a stock-option
order is not displayed by the Exchange, the exception in Rule
201(b)(1)(iii)(A) is not available. 17 CFR 242.201(b)(1)(iii)(A).
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    If the stock-option order is not Complex Auction-eligible, the
System will determine if it is eligible to be executed against another
inbound stock-option order or another stock-option order resting on the
Strategy Book. If eligible, the System will route both sides of the
matched underlying security component of the stock-option order as a
Qualified Contingent Trade (``QCT'') to an Exchange-designated broker-
dealer for execution on a stock trading venue. The stock trading venue
will then either successfully execute the QCT or cancel it back to the
Exchange-designated broker-dealer, which in turn will either report the
execution of the QCT or cancel it back to the Exchange. While the
Exchange is a trading center pursuant to Rule 201, the Exchange will
neither execute nor display the underlying security component of a
stock-option order. Instead, the execution or display of the underlying
security component of a stock-option order will occur on a trading
center other than the Exchange, such as an Exchange-designated broker-
dealer or other stock trading venue.
    If the Exchange-designated broker-dealer or other stock trading
venue, as applicable, cannot execute the underlying security component
of a stock-option order in accordance with Rule 201, the Exchange will
not execute the option component(s) of the stock-option order and will
either place the unexecuted stock-option order on the Strategy Book or
cancel it back to the submitting Member in accordance with the
submitting Member's instructions (except that cAOC and cIOC stock-
option orders and eQuotes will be cancelled). Once placed back onto the
Strategy Book, the stock-option order will be handled in accordance
with Proposed Rule 518, Interpretation and Policy .01(b) as described
herein.
    If the stock-option order is not Complex Auction-eligible and
cannot be executed or placed on the Strategy Book, it will be cancelled
by the System. Otherwise, the stock-option order will be placed on the
Strategy Book.
    The Exchange proposes to adopt subsection (c), Option Component, to
Interpretation and Policy .01, to provide that the option leg(s) of a
stock-option order shall not be executed (i) at a price that is
inferior to the Exchange's best bid (offer) in the option or (ii) at
the Exchange's best bid (offer) in that option if one or more Priority
Customer Orders are resting at the best bid (offer) price on the Simple
Order Book in each of the option components and the stock-option order
could otherwise be executed in full (or in a permissible ratio). If one
or more Priority Customer Orders are resting at the best bid (offer)
price on the Simple Order Book, at least one option component must
trade at a price that is better than the corresponding bid or offer in
the marketplace by at least $0.01. The option leg(s) of a stock-option
order may be executed in a $0.01 increment, regardless of the minimum
quoting increment applicable to that series.\32\
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    \32\ See also CBOE Rule 6.53C.06(b), which states that the
option leg(s) shall not be executed at a price that is (i) at a
price that is inferior to the Exchange's best bid (offer) in the
series or (ii) at the Exchange's best bid (offer) in that series if
one or more public customer orders are resting at the best bid
(offer) price on the Ebook in each of the component option series
and the stock-option order could otherwise be executed in full (or
in a permissible ratio). The option leg(s) of a stock-option order
may be executed in a one-cent increment, regardless of the minimum
quoting increment applicable to that series.
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    The Exchange proposes to adopt subsection (d), Strategy Book, to
Interpretation and Policy .01, to provide that stock-option orders and
quotes on the Strategy Book that are marketable against each other will
automatically execute, subject to price and priority provisions
described in the above paragraph relating to the option component of
the stock-option order. Orders and quotes may be submitted by Members
to trade against orders on the Strategy Book.\33\
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    \33\ See also CBOE Rule 6.53C.06(c), which differs slightly,
stating that orders and quotes may be submitted by market
participants to trade against orders in the COB except that the N-
second group timer shall not be in effect for stock-option orders.
MIAX does not have an ``N-second group timer.''
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    The Exchange proposes to adopt subsection (e), Stock-Option Orders
in MIAX Emerald Complex Order Auctions, to Interpretation and Policy
.01, to provide that stock-option orders executed via Complex Auction
shall trade in the sequence set forth in proposed Rule 518(d)(5)
described above except that the provision regarding individual orders
and quotes in the leg markets resting on the Simple Order Book prior to
the initiation of a Complex Auction will not be applicable and such
execution will be subject to the conditions noted above concerning

the price of the option leg(s), together with all applicable securities
laws.
    The Exchange proposes to adopt subsection (f), Limit Up-Limit Down
State, to Interpretation and Policy .01, to provide that when the
underlying security of a stock-option order is in a limit up-limit down
state as defined in Rule 530, such order will only execute if the
calculated stock price is within the permissible Price Bands as
determined by SIPs \34\ under the Plan to Address Extraordinary Market
Volatility Pursuant to Rule 608 of Regulation NMS, as it may be amended
from time to time (the ``LULD Plan'').
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    \34\ All U.S. exchanges and associations that quote and trade
exchange-listed securities must provide their data to a centralized
SIP for data consolidation and dissemination. See 15 U.S.C.
78c(22)(A).
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    The Exchange proposes to adopt subsection (g), Parity Price
Protection, to Interpretation and Policy .01, to provide that the
System will provide parity price protection for strategies that consist
of a sale (purchase) of one call and the purchase (sale) of 100 shares
of the underlying stock (``Buy-Write'') or that consist of the purchase
(sale) of one put and the purchase (sale) of 100 shares of the
underlying stock (``Married-Put''). A Parity Spread Variance (``PSV'')
value between $0.00 and $0.50 which will be uniform for all option
classes traded on the Exchange, will be determined by the Exchange and
communicated via Regulatory Circular. The PSV will be used to calculate
a minimum option trading price limit that the System will prevent the
option leg from trading below. For call option legs, the PSV value is
added to the strike price of the option to establish a parity protected
price for the strategy. For put option legs, the PSV value is
subtracted from the strike price of the option to establish a parity
protected price for the strategy. Married-Put and Buy-Write interest to
buy (buy put and buy stock; or buy call and sell stock) that is priced
below the parity protected price for the strategy will be rejected.
Married-Put and Buy-Write interest to sell (sell put and sell stock; or
sell call and buy stock) that is priced below the parity protected
price for the strategy will be placed on the Strategy Book at the
parity protected price for the strategy.
    The examples below provide an illustration of how the protection is
calculated for Buy-Write and Married-Put strategies. For the purposes
of the following examples the PSV used in the calculations is $.10.
    Following is an example of the operation of the price protection
feature for a Married-Put Strategy:
Example 1 (Married-Put)
    In its simplest terms the parity price of a put option can be
expressed as (Strike Price-Stock Price = Put Option Parity Price). If,
for example, the stock is trading at $45.00 and the Strike Price of the
put option is $50.00, the parity price of the put option would then be
$5.00 ($50.00-$45.00 = $5.00). The Exchange is able to leverage the
parity relationship between the components to establish a minimum
option trading price limit for Married-Put Strategies by simply
subtracting the PSV from the strike price of the option. The effect on
the option price can be seen in the following calculation (($50.00-
$0.10)-$45.00 = $49.90-$45.00 = $4.90). The Exchange will calculate the
parity protected price for a Married-Put Strategy by leveraging the put
option parity formula by simply subtracting the PSV from the strike
price of the option. This would result in a parity protected price for
the strategy of $49.90 using the figures above.
    This allows for the stock component and the option component prices
to fluctuate to achieve the strategy's net price, but ensures that the
strategy will not trade below its parity protected price. Married Put
Strategy interest received to sell a price protected Married-Put
Strategy below $49.90 will be placed on the Strategy Book \35\ at
$49.90. Married Put Strategy interest received to buy a price protected
Married-Put Strategy below $49.90 will be rejected.
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    \35\ The ``Strategy Book'' is the Exchange's electronic book of
complex orders and complex quotes. See Exchange Rule 518(a)(17).
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Example 2 (Buy-Write)
    In its simplest terms the parity price of a call option can be
expressed as (Stock Price-Strike Price = Call Option Parity Price). If,
for example, the stock is trading at $45.00 and the Strike Price of the
call option is $40.00, the parity price of the call option would then
be $5.00 ($45.00-$40.00 = $5.00). The Exchange is able to leverage the
parity relationship between the components to establish a minimum
option trading price limit for Buy-Write Strategies by adding the PSV
to the strike price of the option. The effect on the option price can
be seen in the following calculation ($45.00-($40.00 + $.10) = $45.00-
$40.10 = $4.90). The Exchange will calculate the parity protected price
for a Buy-Write Strategy by leveraging the call option parity formula
by simply adding the PSV to the strike price of the option. This would
result in a parity protected price for the strategy of $40.10 net debit
using the figures above.
    This allows for the stock component and the option component prices
to fluctuate to achieve the strategy's net price, but ensures that the
strategy will not trade below its parity protected price. Buy-Write
strategy interest received to sell a price protected Buy-Write Strategy
below $40.10 net debit will be placed on the Strategy Book at $40.10
net debit.\36\ Buy-Write strategy interest received to buy a price
protected Buy-Write Strategy below $40.10 net debit will be rejected.
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    \36\ A seller of the strategy would receive a $40.10 net credit.
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    The Exchange proposes to amend subsection (d), Implied Away Best
Bid or Offer (``ixABBO'') Price Protection,\37\ of Interpretation and
Policy .05 to add that for stock-option orders, the ixABBO for a
complex strategy will be calculated using the BBO for each component on
each individual away options market and the NBBO for the stock
component.
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    \37\ The Implied Away Best Bid or Offer (``ixABBO'') price
protection feature is a price protection mechanism under which, when
in operation as requested by the submitting Member, a buy order will
not be executed at a price that is higher than each other single
exchange's best displayed offer for the complex strategy, and under
which a sell order will not be executed at a price that is lower
than each other single exchange's best displayed bid for the complex
strategy. See Exchange Rule 518.05(d)
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    Finally, the Exchange proposes to make a number of minor, non-
substantive edits to Rule 518, Interpretation and Policy .05(e), to add
clarity and precision to the Exchange's rule text. Since the Exchange
will be introducing the trading of complex strategies which include a
``stock'' component, the Exchange seeks to clarify certain aspects of
the rule that are intended to apply only to the ``option'' component of
a complex strategy. Specifically, the Exchange proposes to clarify the
definition of a Wide Market Condition, as described in Interpretation
and Policy .05, subsection (e)(1), so that it is clear that it is only
applying to the ``option'' component of a complex strategy. The new
proposed rule text will provide that, ``[a] `wide market condition' is
defined as any individual option component of a complex strategy
having, at the time of evaluation, an EBBO \38\ quote width that is
wider than the permissible valid quote width as defined in Rule
603(b)(4).'' By definition, the EBBO is comprised of option interest
only, therefore providing additional detail to the existing rule adds
clarity to the Exchange's rules.
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    \38\ The term ``EBBO'' means the best bid or offer on the Simple
Order Book on the Exchange. See Exchange Rule 518(a)(10).
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    Similarly, the Exchange proposes to clarify that Simple Market
Auction or

Timer Events (``SMAT Events'') pertain only to ``option'' components of
a complex strategy, by amending Interpretation and Policy .05,
subsection (e)(2)(i) and (e)(2)(ii), to include the term ``option
component'' in the first sentence of each section. By definition, the
Exchange's Simple Market is comprised of option interest only, on the
Simple Order Book, therefore providing additional detail to the
existing rule adds clarity to the Exchange's rules.
    Additionally, the Exchange believes that although MIAX Emerald
rules may, in certain instances, intentionally differ from MIAX Options
rules, the proposed changes will promote uniformity with MIAX Options
with respect to rules that are intended to be identical. MIAX Emerald
and MIAX Options may have a number of Members in common, and where
feasible the Exchange intends to implement similar behavior to provide
consistency between MIAX Options and MIAX Emerald so as to avoid
confusion among Members.
2. Statutory Basis
    The Exchange believes that its proposed rule changes are consistent
with Section 6(b) of the Act \39\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \40\ 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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    \39\ 15 U.S.C. 78f(b).
    \40\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes introducing stock-option orders promotes just
and equitable principles of trade, 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 investors additional complex orders to use to meet their
investment objectives. The Exchange believes that the proposed rule
change will assist in the electronic processing of stock-option orders
by providing an efficient mechanism for transacting these strategies.
The Exchange believes that the general provisions regarding the trading
of complex orders provide a clear framework for trading of complex
orders in a manner consistent with other options exchanges. This
consistency should promote a fair and orderly national options market
system.
    The Exchange believes establishing a parity price protection for
certain Buy-Write and Married-Put strategies 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 ensuring
that strategies are not executed at potentially erroneous prices.
    Given the relationship that the stock price, strike price, and
option price have to each other, the Exchange is able to calculate a
minimum option trading price limit for the option leg of certain stock-
option strategies with a call or a put component. Specifically, the
parity price of a call option can be derived by subtracting the strike
price from the stock price (Stock Price - Strike Price = Call Option
Parity Price); and the parity price of a put option can be derived by
subtracting the stock price from the strike price (Strike Price - Stock
Price = Put Option Parity Price). Using these relationships the PSV may
be applied to establish a minimum option trading price limit that the
System will prevent the option leg from trading below to establish a
parity protected price for the strategy to ensure the strategy does not
trade below its parity protected price at a potentially erroneous
price.
    The Exchange believes that Members will benefit from the proposed
risk protection measure as the protection ensures that these stock-
option strategies are not executed below their parity protected price
as calculated by the Exchange. Consequently, the proposed risk
protection is designed to encourage Members to submit additional order
flow and liquidity to the Exchange in these strategies, thereby
removing impediments to and perfecting the mechanisms of a free and
open market and a national market system and, in general, protecting
investors and the public interest. This protection should provide
Members with confidence that protections are in place on the Exchange
to reduce the risk of these strategies being executed at potentially
erroneous prices. As a result, the Exchange believes that the proposed
price protection feature will promote just and equitable principles of
trade.
    Finally, the Exchange proposes to make minor non-substantive
changes to its rule to clarify that Wide Market Conditions and Simple
Market Auction or Timer Events on the Exchange are related to the
``option'' components only for complex strategies. The Exchange
believes the proposed changes promote just and equitable principles of
trade, remove impediments to and perfect the mechanism of a free and
open market and a national market system because they seek to add
clarity and precision to the Exchange's rules. The Exchange believes
that the proposed rule changes will provide greater clarity to Members
and the public regarding the Exchange's Rules, and it is in the public
interest for rules to be accurate and concise so as to eliminate the
potential for confusion.

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 believes the
proposed rule change will foster competition as the Exchange will offer
stock-option orders which are offered on other exchanges.\41\
Additionally, the proposed rule change will foster competition as it
provides a risk protection mechanism for certain complex strategies
entered on the Exchange and may promote competition by enabling Members
to trade more aggressively on the Exchange knowing that these
strategies will not be executed below parity protected price at
potentially erroneous prices. Accordingly, the price protection feature
should instill additional confidence in Members that submit certain
stock-option orders to the Exchange that their orders receive price
protection, and thus should encourage Members to submit additional
order flow and liquidity to the Exchange, thereby removing impediments
to and perfecting the mechanisms of a free and open market and a
national market system and, in general, protecting investors and the
public interest. Further, the additional proposed changes remedy minor
non-substantive issues in the text of various rules identified in this
proposal.
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    \41\ See MIAX Options Exchange Rule 518, CBOE Rule 6.53C(a)(2),
and NASDAQ PHLX Rule 1098.
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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
apply equally to all Members. The Exchange further believes that the
proposed price protection should promote inter-market competition, and
could result in more competitive order flow to the Exchange.
    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, and believes

the proposed change will enhance competition.

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 \42\ and Rule 19b-4(f)(6) \43\
thereunder.
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    \42\ 15 U.S.C. 78s(b)(3)(A).
    \43\ 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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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \44\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \45\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. In its filing
with the Commission, the Exchange has asked the Commission to waive the
30-day operative delay to allow MIAX Emerald to implement the handling
and trading of stock-option orders in a manner identical to that of
MIAX Options. As noted above, MIAX Emerald states that the proposed
rules are identical to rules adopted by MIAX Options.\46\ In addition,
MIAX Emerald notes that MIAX Emerald and MIAX Options may have a number
of Members in common, and that, where feasible, MIAX Emerald intends to
implement similar behavior to provide consistency between MIAX Options
and MIAX Emerald to avoid confusion among Members. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because it will allow
MIAX Emerald to implement rules regarding the trading of stock-option
orders that are identical to rules adopted by MIAX Options, thereby
reducing the potential for confusion among market participants that are
Members of both MIAX Emerald and MIAX Options. In addition, the
Commission notes that because the proposed rule change is based on
substantively identical rules of MIAX Options, the proposal raises no
new regulatory issues. Accordingly, the Commission hereby waives the
operative delay and designates the proposal operative upon filing.\47\
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    \44\ 17 CFR 240.19b-4(f)(6).
    \45\ 17 CFR 240.19b-4(f)(6)(iii).
    \46\ See supra note 3, and accompanying text.
    \47\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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_ADDRESS>Please include
File Number SR-EMERALD-2019-13 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-EMERALD-2019-13. 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-EMERALD-2019-13 and should be submitted
on or before April 12, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\48\
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    \48\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-05461 Filed 3-21-19; 8:45 am]
 BILLING CODE 8011-01-P