Notice2023-16503
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Provide an Additional Means of Access to the Member Firm Portal Through an Application Programming Interface
Primary source
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Published
August 3, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 148 (Thursday, August 3, 2023)</title>
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[Federal Register Volume 88, Number 148 (Thursday, August 3, 2023)]
[Notices]
[Pages 51374-51376]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-16503]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98018; File No. SR-EMERALD-2023-18]
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Provide
an Additional Means of Access to the Member Firm Portal Through an
Application Programming Interface
July 28, 2023.
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 July 21, 2023, MIAX Emerald LLC (``MIAX Emerald'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
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 provide an additional means to
access its Member Firm Portal (``MFP'').\3\
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\3\ See MIAX Exchanges Member Firm Portal User Manual, available
at <a href="https://www.miaxglobal.com/sites/default/files/page-files/MIAX_Exchanges_Member_Firm_Portal_User_Manual_01032023.pdf">https://www.miaxglobal.com/sites/default/files/page-files/MIAX_Exchanges_Member_Firm_Portal_User_Manual_01032023.pdf</a>.
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The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/emerald-options/rule-filings">https://www.miaxglobal.com/markets/us-options/emerald-options/rule-filings</a>, at MIAX's principal office, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange provides Members access to an internet-facing portal
which provides self-service functions to Members, known as the MFP.
Specifically, the MFP allows Members to correct certain trade
information required by the Options Clearing Corporation (``OCC''),
such as the trade's account number, sub-account number, Clearing Member
Trade Assignment (``CMTA''), Clearing Participant Give-Up, or account
type. The MFP also provides Members the ability to adjust risk settings
and allows Market Makers \4\ to request options class assignments.
Members may also perform the following function via the MFP: selecting
symbol assignments; editing existing symbol assignments; unassigning
one or more symbol; retrieving symbol assignments; receiving export of
symbol assignments for a business day; and retrieving assignment
history for a given symbol assignment. The MFP allows Members to more
efficiently manage their back office operations and assist them in
providing accurate clearing information to the OCC. Currently, access
to the MFP is provided on a per user basis, whereby Members seek to
have individuals within their organization permissioned to access the
MFP via a web portal on their behalf (known as the ``MFP User
Interface'' or ``MFP UI''). The Exchange notes that other options
exchanges make similar products available to firms for a monthly per
user fee.\5\ The Exchange provides the MFP UI to Members free of
charge.
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\4\ The term ``Market Makers'' refers to ``Lead Market Makers'',
``Primary Lead Market Makers'' and ``Registered Market Makers''
collectively. See Exchange Rule 100.
\5\ See BOX Exchange LLC Fee Schedule, Section III. D. The
Nasdaq Stock Market LLC (``Nasdaq'') charges $200 per month, per
user. See Nasdaq Rules Options 7 Pricing Schedule, Section 6 Nasdaq
Options Maintenance Tool. See also Securities Exchange Act Release
No. 96723 (January 20, 2023), 88 FR 5046 (January 26, 2023) (SR-BOX-
2023-03) (Notice of Filing and Immediate Effectiveness of a Proposed
Rule Change to Establish a New Service and Related Fees for Use of
the BOX Options Market LLC (``BOX'') Trade Management System).
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Members have requested that the Exchange also provide access to the
MFP via an Application Programming Interface \6\ (``API'' and together
``MFP API''), in addition to the current MFP UI accessed via the web
portal. In sum, an API is a way for two or more computer programs to
talk to each other. It is a software to software interface that defines
the data and the transactions that can be communicated between systems.
In providing the MPF API, functions that would otherwise be done
manually via the MFP UI, can be automated. The MFP API, in essence,
facilitates and expedites the transaction processing for the supported
functionality such that the Exchange Members can automate their
interactions with the MFP. This allows for more efficient processing,
the potential reduction of operational risk due to issues caused by
human error, the timeliness of the completion of MFP-related functions,
etc.\7\ Providing API access to the MFP would allow Members to enable
their systems and applications to communicate directly with the MFP,
thereby eliminating or reducing the need for individuals to access the
MFP UI via the web portal.
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\6\ The Exchange intends to submit a separate filing with the
Commission pursuant to Section 19(b)(1) to propose fees for the
Service.
\7\ See, e.g., What is an API?, available at <a href="https://www.ibm.com/topics/api">https://www.ibm.com/topics/api</a> (last visited June 22, 2023).
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The Exchange does not propose to alter the current MFP or MFP UI.
The Exchange simply proposes to provide an additional and optional
means to access the MFP, in the form of an API, and Members would be
able to perform the same functions they do today when they access the
MFP UI via the web portal. API access to the MFP would allow a Member's
applications to communicate directly with the MFP. Therefore, by its
nature, the MFP API does not lend itself to access on a per user basis,
as is the case today with the MFP UI via the web portal. API access
would allow Members to automate functions they perform today on the
MFP, such as adjusting risk settings or managing options assignments.
Members who do not prefer to access the MFP API would be able to
perform the same functions when accessing the MFP UI via the current
web portal.
The Exchange notes that use of accessing the MFP API would be
completely voluntary and would simply be second optional means to
access the MFP. Members who wish to continue to access the MFP UI via
the web portal may continue to do so for no fee.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Act,\8\ in general, and Section
6(b)(5),\9\ in particular, because it is designed to
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prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, and to remove impediments to and perfect the mechanism
of a free and open market and a national market system.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange notes that providing the MFP API to Members is
consistent with the Act in that the use of MFP API is completely
voluntary and simply provides Members with an additional means to
access the Exchange's MFP. The MFP is a useful tool for Members to
manage their trading on the Exchange, including back office operations,
risk controls settings, and Market Maker options assignments.
As noted above, accessing the MFP via an API would be an optional
alternative to web access. Those not electing to access the MFP via an
API may continue to use the MFP UI via the web portal free of charge.
The MFP, whether accessed via an API or web portal, allow Members to
more efficiently manage their back office operations, assist them in
providing accurate clearing information to the OCC and in selecting
Market Maker options assignments. The Exchange notes that trade
information in the MFP is specific to each Member and their trades,
allowing them to conveniently verify, update, and/or correct
transaction information as needed.
Providing API access to the MFP would be provided purely for
convenience, in response to Member demand, and would be entirely
optional. As stated above, API access to the MFP would enable Members
to connect their applications to the MFP allowing their application to
communicate directly with the MFP. This enables Members to automate
functions that would normally be performed by individual users access
the MFP via the current web portal, such as adjusting risk settings and
managing options assignements. Members who do not prefer to access the
MFP API would be able to perform the same functions by accessing the
MFP UI via the existing web portal.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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. API access to
the MFP would simply be an optional additional means to access the MFP.
The Exchange does not believe there would be any competitive advantage
for Members who access the MFP via an API over those who access it via
the current web portal because Members would be able to perform the
same functions via both modes of access. API access would simply be a
convenience and would enable Members to automate those functions. The
Exchange does not believe a Member's ability to automate this
functionality provides any competitive advantage when trading on the
Exchange. As such, the Exchange does not believe that the proposed rule
change will impose any burden on intermarket or intramarket 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
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 if consistent with the
protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) \11\ thereunder.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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, along
with a brief description and text of 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 under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. The Exchange requested
the waiver because it would allow the Exchange to expand the means of
access to the MFP sooner and meet the demands of Members who have
requested API access to meet their own back office needs. The Exchange
stated that Members requested the ability to access the API so that
they may automate certain functions and that they would be able to
perform the same functions in the MFP regardless of whether they access
the MFP via the web portal or an API. For these reasons, and because
the proposed rule change does not raise any novel legal or regulatory
issues, the Commission believes that waiving the 30-day operative delay
is consistent with the protection of investors and the public interest.
Therefore, the Commission hereby waives the 30-day operative delay and
designates the proposal operative upon filing.\14\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ 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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#94e6e1f8f1b9f7fbf9f9f1fae0e7d4e7f1f7baf3fbe2"><span class="__cf_email__" data-cfemail="2c5e594049014f4341414942585f6c5f494f024b435a">[email protected]</span></a>. Please include
file number SR-EMERALD-2023-18 on the subject line.
Paper Comments
<bullet> 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-2023-18. 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
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post all comments on the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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 a.m. and 3 p.m. Copies of the
filing also will be available for inspection and copying at the
principal office of the Exchange. Do not include personal identifiable
information in submissions; you should submit only information that you
wish to make available publicly. We may redact in part or withhold
entirely from publication submitted material that is obscene or subject
to copyright protection. All submissions should refer to file number
SR-EMERALD-2023-18 and should be submitted on or before August 24,
2023.
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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-16503 Filed 8-2-23; 8:45 am]
BILLING CODE 8011-01-P
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