Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 5.4, Withdrawal of Approval of Underlying Securities, 60778-60781 [2017-27564]
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60778
Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Notices
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 18,
2017, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Contract 397 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2018–68, CP2018–108.
SUPPLEMENTARY INFORMATION:
Elizabeth A. Reed,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2017–27549 Filed 12–21–17; 8:45 am]
the transfer agents whose names appear
in the attached Appendix.
FOR FURTHER INFORMATION CONTACT:
Christian Sabella, Associate Director, or
Catherine Whiting, Senior Counsel, at
(202) 551–4990, U.S. Securities and
Exchange Commission, Division of
Trading and Markets, 100 F Street NE,
Washington, DC 20549–7010 or by
email at tradingandmarkets@sec.gov
with the phrase ‘‘Notice of Intention to
Cancel Transfer Agent Registration’’ in
the subject line.
Background
BILLING CODE 7710–12–P
POSTAL SERVICE
Product Change—Priority Mail
Negotiated Service Agreement
Postal ServiceTM.
ACTION: Notice.
AGENCY:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of notice required under 39
U.S.C. 3642(d)(1): December 22, 2017.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 18,
2017, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Contract 393 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2018–64, CP2018–104.
SUMMARY:
Elizabeth A. Reed,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2017–27545 Filed 12–21–17; 8:45 am]
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
Section 17A(c)(4)(B) of the Act
provides that if the Commission finds
that any transfer agent registered with
the Commission is no longer in
existence or has ceased to do business
as a transfer agent, the Commission
shall by order cancel that transfer
agent’s registration.
Although the Commission has made
efforts to locate and to determine the
status of each of the transfer agents
listed in the Appendix, based on the
facts it has, the Commission believes
that each of those transfer agents is no
longer in existence or has ceased doing
business as a transfer agent.
Accordingly, at any time after January
31, 2018, the Commission intends to
issue an order cancelling the
registrations of the transfer agents listed
in the Appendix.
The representative of any transfer
agent listed in the Appendix who
believes the registration of the transfer
agent should not be cancelled must
notify the Commission in writing or by
email prior to January 31, 2018. Written
notifications may be mailed to Office of
Clearance and Settlement, Division of
Trading and Markets, U.S. Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20459–7010. Email
notifications may be sent to
tradingandmarkets@sec.gov with the
phrase ‘‘Notice of Intention to Cancel
Transfer Agent Registration’’ in the
subject line.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.2
Brent J. Fields,
Secretary.
[Release No. 34–82342]
Notice of Intention To Cancel
Registrations of Certain Transfer
Agents
APPENDIX
sradovich on DSK3GMQ082PROD with NOTICES
December 18, 2017.
Notice is hereby given that the
Securities and Exchange Commission
(‘‘Commission’’) intends to issue an
order, pursuant to Section 17A(c)(4)(B)
of the Securities Exchange Act of 1934
(‘‘Act’’),1 cancelling the registrations of
TA name
File number
AG Transfer Agency LLC .........
Allied Stock Transfer, Inc .........
AlphaMetrix, LLC ......................
Baron Capital Transfer & Registrar LLC ..............................
084–06306
084–06171
084–06327
TA name
Bluechip Equity Inc. DBA
Bluechip Trust Company ......
Cascade Stock Transfer, Inc ....
Cascade Stock Transfer, Inc ....
Centerline Affordable Housing
Advisors LLC .........................
Chris Lotito ...............................
Clayton Securities Services, Inc
Demiurgic, Inc ...........................
Elite Transfer Corp ...................
EnDevCo, Inc ...........................
First National Bank of Omaha ..
First National Bank of Sioux
Falls .......................................
Fund Dynamics, LLC ................
Hiko Bell Mining & Oil Company ......................................
Holladay Stock Transfer, Inc ....
Integrity Stock Transfer ............
Intercontinental Registrar &
Transfer Agency, Inc .............
Investor Data Services .............
Johnson, Lawrence & Associates .......................................
Karrison Compagnie Inc ...........
Life Sciences Research ............
LM Anderson Securities, LLC ..
Matrix Capital Group Inc ..........
Premier Stock Transfer, LLC ....
Progressive Transfer, Inc .........
Quads Trust Company .............
Repository & Related Services,
LLC ........................................
Securities Registrar & Transfer
Corp ......................................
Signal Stock Transfer, Inc ........
Standard Transfer & Trust Co.,
Inc .........................................
Superior Stock Transfer, Inc ....
Thermal Energy Storage Inc ....
U.S. Stock Transfer Corp .........
U.S. Trust & Transfer Co .........
Valley Forge Management
Corp ......................................
Wall Street Stock Transfer Corporation .................................
15 U.S.C. 78q–1(c)(4)(B).
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084–01911
084–06197
084–05425
084–06274
084–06193
084–06084
084–06174
084–06228
084–06208
084–05445
084–01822
084–06113
084–01123
084–01425
084–05831
084–06046
084–06094
084–06257
084–06122
084–06518
084–06268
084–05621
084–06500
084–00582
084–06360
084–05819
084–06121
084–01300
084–06293
084–05663
084–00012
084–06246
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82346; File No. SR–CBOE–
2017–076]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Exchange
Rule 5.4, Withdrawal of Approval of
Underlying Securities
December 18, 2017.
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 December
084–06440
2 17
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084–06173
084–06204
084–06204
[FR Doc. 2017–27566 Filed 12–21–17; 8:45 am]
1 15
1
File number
E:\FR\FM\22DEN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
22DEN1
Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Notices
4, 2017, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II, below, which Items have
been prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange seeks to amend Rule
5.4 to allow the Exchange to restrict
option series to closing transactions
when an option class is open for trading
solely on the Exchange and the
underlying security continues to meet
the requirements for approval.
(additions are italicized; deletions are
[bracketed])
*
*
*
*
*
Cboe Exchange, Inc.
Rules
*
*
*
*
*
Rule 5.4. Withdrawal of Approval of
Underlying Securities.
No change.
sradovich on DSK3GMQ082PROD with NOTICES
. . . Interpretations and Policies:
.01–.12 No change.
.13 If an option class is open for
trading on another national securities
exchange, the Exchange may delist such
option class immediately. If an option
class is open for trading solely on the
Exchange, the Exchange may determine
to not open for trading any additional
series in that option class[,]; may restrict
series with open interest to closing
transactions, provided that, opening
transactions by Market-Makers executed
to accommodate closing transactions of
other market participants and opening
transactions by TPH organizations to
facilitate the closing transactions of
public customers executed as crosses
pursuant to and in accordance with
Rule 6.74(b) or (d) may be permitted;
and may delist the option class when all
series within that class have expired. In
all instances, delisting shall be preceded
by a notice to TPH organizations
concerning the delisting.
.14–.16 No change.
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/About
CBOE/CBOELegalRegulatory
Home.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 seeks to amend Rule
5.4 to allow the Exchange to restrict
option series to closing transactions
when an option class is open for trading
solely on the Exchange and the
underlying security continues to meet
the requirements for approval. The
Exchange believes the ability to restrict
option series to closing transactions
when an option class is open for trading
solely on the Exchange and the
underlying security continues to meet
the requirements for approval will allow
the Exchange to delist option series in
a timely and efficient manner.
Currently, when an option class is
trading on another exchange Cboe
Options may delist such option class
immediately, regardless of whether the
option class continues to meet the
requirements for approval.5 When an
option class that no longer meets the
requirements for approval is trading
solely on the Exchange the Exchange
may not add any additional series,6 may
restrict series with open interest to
closing transactions,7 and may delist
any series without open interest.8
However, when an option class
continues to meet the requirements for
approval and is trading solely on the
Exchange the Exchange may not restrict
series with open interest to closing
transactions; instead, the Exchange may
5 See
Rule 5.4.13.
Rule 5.4 and 5.4.13.
7 See Rule 5.4.12.
8 See Rule 5.4.12.
only delist series with no open interest 9
and ‘‘determine to not open for trading
any additional series in that option
class, and may delist the option class
when all series within that class have
expired.’’ 10
The Exchange seeks to amend
Interpretation and Policy .13 to Rule 5.4
to allow the Exchange to restrict option
series to closing transactions when an
option class is open for trading solely on
the Exchange and the underlying
security continues to meet the
requirements for approval.
There are various business reasons
why the Exchange may choose to no
longer list an option class (e.g., lack of
trading interest, lack of market-making
interest, etc.). The Exchange believes
restricting such classes to closing
transactions will allow open interest to
be closed in a timelier and more
efficient manner. When seeking to delist
an option class the Exchange believes
that restricting series to closing
transactions is a better way to transition
the class to a delisted state than the
current method of not adding additional
series and allowing market participants
to continue to add new positions in the
existing series. Restricting trading to
closing transactions encourages market
participants to close transactions, which
helps to limit any potential negative
effects associated with delisting a class.
For example, restricting trading to
closing transactions helps prevent
market participants from adding new
positions that cannot be rolled into the
following expiration (a common options
strategy).
The Exchange notes that this proposal
is consistent with the manner in which
Rule 5.4 operates in relation to option
classes with underlying securities that
no longer meet the requirements for
approval—additional series are not
added, series with open interest are
restricted to closing only, and series
without open interest are delisted. As
proposed, when the Exchange seeks to
delist an option class with an
underlying security that continues to
meet the requirements for approval the
Exchange will not open additional
series in the option class and will
restrict trading to closing transactions.
Also consistent with current Rule 5.4,
opening transactions by Market-Makers
executed to accommodate closing
transactions of other market participants
and opening transactions by TPH
organizations to facilitate the closing
transactions of public customers
executed as crosses pursuant to and in
accordance with Cboe Rule 6.74(b) or
6 See
3 15
4 17
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
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9 See
Rule 5.4.12.
Rule 5.4.13.
10 See
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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Notices
sradovich on DSK3GMQ082PROD with NOTICES
(d) may be permitted. Allowing MarketMakers and TPH organizations to
facilitate closing transactions of public
customers will help public customers
close positions in classes that will be
delisted by the Exchange, which helps
to protect investors and the public
interest. It is reasonable to restrict series
to closing only pursuant to current Rule
5.4 when underlying securities no
longer meet requirements for approval.
The Exchange believes it is also
reasonable to restrict series to closing
when the options class no longer
satisfies business justifications for
listing the class.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.11 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 12 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 13 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, when seeking to delist
an option class—whether or not the
underlying security continues to meet
the requirements for approval—the
Exchange believes that restricting series
to closing transactions is a better way to
transition the class to a delisted state
than the current method of not adding
additional series and allowing market
participants to continue to add new
positions in the existing series.
Restricting trading to closing
transactions encourages market
participants to close transactions, which
helps to limit any potential negative
effects associated with delisting a class
and helps to protect customers and the
public interest.
11 15
12 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
13 Id.
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The Exchange notes that this proposal
is consistent with the manner in which
Rule 5.4 operates in relation to option
classes with underlying securities that
no longer meet the requirements for
approval—additional series are not
added, series with open interest are
restricted to closing only, and series
without open interest are delisted. As
proposed, when the Exchange seeks to
delist an option class with an
underlying security that continues to
meet the requirements for approval the
Exchange will not open additional
series in the option class and will
restrict trading to closing transactions.
Also consistent with current Rule 5.4,
opening transactions by Market-Makers
executed to accommodate closing
transactions of other market participants
and opening transactions by TPH
organizations to facilitate the closing
transactions of public customers
executed as crosses pursuant to and in
accordance with Cboe Rule 6.74(b) or
(d) may be permitted. Allowing MarketMakers and TPH organizations to
facilitate closing transactions of public
customers will help public customers
close positions in classes that will be
delisted by the Exchange, which helps
to protect investors and the public
interest. It is reasonable to restrict series
to closing only pursuant to current Rule
5.4 when underlying securities no
longer meet requirements for approval.
The Exchange believes it is also
reasonable to restrict series to closing
when the option class no longer satisfies
business justifications for listing the
class.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Cboe does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. This
proposed rule change is consistent with
the manner in which Rule 5.4 operates
in relation to option classes with
underlying securities that no longer
meet the requirements for approval—
additional series are not added, series
with open interest are restricted to
closing only, and series without open
interest are delisted. Also consistent
with current Rule 5.4, opening
transactions by Market-Makers executed
to accommodate closing transactions of
other market participants and opening
transactions by TPH organizations to
facilitate the closing transactions of
public customers executed as crosses
pursuant to and in accordance with
Cboe Rule 6.74(b) or (d) may be
permitted. Allowing Market-Makers and
TPH organizations to facilitate closing
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transactions of public customers will
help public customers close positions in
classes that will be delisted by the
Exchange, which helps to protect
investors and the public interest and
does not impose any burden on
competition that is 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
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
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 from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 14 and
subparagraph (f)(6) Rule 19b–4
thereunder.15
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.
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:
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s 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.
15 17
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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Notices
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2017–076 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.
sradovich on DSK3GMQ082PROD with NOTICES
All submissions should refer to File
Number SR–CBOE–2017–076. 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 (https://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–CBOE–2017–076 and
should be submitted on or before
January 12, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017–27564 Filed 12–21–17; 8:45 am]
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CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82345; File No. SR–LCH
SA–2017–009]
Self-Regulatory Organizations; LCH
SA; Order Approving Proposed Rule
Change Relating to Wrong Way Risk
Margin
December 18, 2017.
I. Introduction
On October 30, 2017, Banque Central
de Compensation, which conducts
business under the name LCH SA (‘‘LCH
SA’’), filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 a
proposed rule change (SR–LCH SA–
2017–009) to amend its Reference
Guide: CDS Margin Framework
(‘‘CDSClear Margin Framework’’ or
‘‘Framework’’) to adjust the manner in
which the wrong way risk (‘‘WWR’’)
margin component of the Framework
addresses offsets between currencies
when calculating WWR margin. The
proposed rule change was published for
comment in the Federal Register on
November 16, 2017.3 The Commission
received no comment letters regarding
the proposed change. For the reasons
discussed below, the Commission is
approving the proposed rule change.
II. Description of the Proposed Rule
Change
LCH SA has proposed to amend its
CDSClear Margin Framework to adjust
the manner in which the WWR margin
component of the Framework addresses
offsets between currencies when
calculating WWR margin. According to
LCH SA, the WWR component of the
Framework is designed to cover the
anticipated financial contagion effect
that would arise in case of a clearing
member being declared in default. The
current WWR margin formula provides
for offsets between currencies by
allowing offset between WWR and right
way risk (‘‘RWR’’). Specifically, under
the current approach, a WWR currency
offset is applied as the greater of: (x) The
WWR amount in Euros minus the RWR
amount in Euros 4; and (y) the WWR
amount in Euros multiplied by 1 minus
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Securities Exchange Act Release No. 34–82043
(November 9, 2017), 82 FR 53536 (November 16,
2017) (SR–LCH–SA–2017–009) (‘‘Notice’’).
4 Amounts not denominated in Euros are
converted to Euros using a foreign exchange rate
plus or minus a haircut. See, Notice, 82 FR at
53536.
2 17
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60781
a factor representing the correlation
between European and U.S. financial
institutions by calculating the average
historical cross correlation of credit
spreads on credit default swaps (‘‘CDS’’)
with respect to all pairs of European and
U.S. financial institutions that are
clearing members of LCH SA.5 Under
this approach, if one currency has WWR
and the other has RWR, LCH SA would
compare the WWR amount, as offset by
the RWR, to the WWR amount, which
is reduced by scaling the WWR by 1
minus the correlation factor, and take
the greater of these two amounts.6 As a
result, either the full amount of RWR is
allowed to offset the WWR, or only a
portion of the WWR is taken into
account without any regard to the
amount of RWR.7
LCH SA proposed to revise this
approach by amending the WWR
currency offset formula in the
Framework to set the WWR margin
component of Framework as the greater
of: (i) The WWR amount in Euros,
minus the RWR amount multiplied by
the 10-year average historical
correlation of credit spreads on CDS in
respect of European and U.S. financial
institutions; and (ii) zero. Thus, under
the proposed approach, RWR would
never completely offset WWR, but
rather would offset WWR after
discounting it based on the average of
observed correlations of CDS credit
spreads with respect to European and
U.S. financial institutions.8
III. Discussion and Commission
Findings
Section 19(b)(2)(C) of the Act directs
the Commission to approve a proposed
rule change of a self-regulatory
organization if it finds that such
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to such organization.9
Section 17A(b)(3)(F) of the Act 10
requires, among other things, that the
rules of a registered clearing agency be
designed to promote the prompt and
accurate clearance and settlement of
securities transactions and, to the extent
applicable, derivative agreements,
contracts, and transactions, as well as to
assure the safeguarding of securities and
funds which are in the custody and
control of the clearing agency or for
which it is responsible, and to protect
investors and the public interest. Rule
5 Id.
6 Id.
7 Id.
8 Id.
9 15
U.S.C. 78s(b)(2)(C).
U.S.C. 78q–1(b)(3)(F).
10 15
E:\FR\FM\22DEN1.SGM
22DEN1
]]>Agencies
[Federal Register Volume 82, Number 245 (Friday, December 22, 2017)]
[Notices]
[Pages 60778-60781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27564]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82346; File No. SR-CBOE-2017-076]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 5.4, Withdrawal of Approval of Underlying Securities
December 18, 2017.
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 December
[[Page 60779]]
4, 2017, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'')
filed with the Securities and Exchange Commission (the ``Commission'')
the proposed rule change as described in Items I and II, below, which
Items have been prepared by the Exchange. The Exchange filed the
proposal as a ``non-controversial'' proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6)
thereunder.\4\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange seeks to amend Rule 5.4 to allow the Exchange to
restrict option series to closing transactions when an option class is
open for trading solely on the Exchange and the underlying security
continues to meet the requirements for approval. (additions are
italicized; deletions are [bracketed])
* * * * *
Cboe Exchange, Inc.
Rules
* * * * *
Rule 5.4. Withdrawal of Approval of Underlying Securities.
No change.
. . . Interpretations and Policies:
.01-.12 No change.
.13 If an option class is open for trading on another national
securities exchange, the Exchange may delist such option class
immediately. If an option class is open for trading solely on the
Exchange, the Exchange may determine to not open for trading any
additional series in that option class[,]; may restrict series with
open interest to closing transactions, provided that, opening
transactions by Market-Makers executed to accommodate closing
transactions of other market participants and opening transactions by
TPH organizations to facilitate the closing transactions of public
customers executed as crosses pursuant to and in accordance with Rule
6.74(b) or (d) may be permitted; and may delist the option class when
all series within that class have expired. In all instances, delisting
shall be preceded by a notice to TPH organizations concerning the
delisting.
.14-.16 No change.
* * * * *
The text of the proposed rule change is also available on the
Exchange's website (https://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 seeks to amend Rule 5.4 to allow the Exchange to
restrict option series to closing transactions when an option class is
open for trading solely on the Exchange and the underlying security
continues to meet the requirements for approval. The Exchange believes
the ability to restrict option series to closing transactions when an
option class is open for trading solely on the Exchange and the
underlying security continues to meet the requirements for approval
will allow the Exchange to delist option series in a timely and
efficient manner.
Currently, when an option class is trading on another exchange Cboe
Options may delist such option class immediately, regardless of whether
the option class continues to meet the requirements for approval.\5\
When an option class that no longer meets the requirements for approval
is trading solely on the Exchange the Exchange may not add any
additional series,\6\ may restrict series with open interest to closing
transactions,\7\ and may delist any series without open interest.\8\
However, when an option class continues to meet the requirements for
approval and is trading solely on the Exchange the Exchange may not
restrict series with open interest to closing transactions; instead,
the Exchange may only delist series with no open interest \9\ and
``determine to not open for trading any additional series in that
option class, and may delist the option class when all series within
that class have expired.'' \10\
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\5\ See Rule 5.4.13.
\6\ See Rule 5.4 and 5.4.13.
\7\ See Rule 5.4.12.
\8\ See Rule 5.4.12.
\9\ See Rule 5.4.12.
\10\ See Rule 5.4.13.
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The Exchange seeks to amend Interpretation and Policy .13 to Rule
5.4 to allow the Exchange to restrict option series to closing
transactions when an option class is open for trading solely on the
Exchange and the underlying security continues to meet the requirements
for approval.
There are various business reasons why the Exchange may choose to
no longer list an option class (e.g., lack of trading interest, lack of
market-making interest, etc.). The Exchange believes restricting such
classes to closing transactions will allow open interest to be closed
in a timelier and more efficient manner. When seeking to delist an
option class the Exchange believes that restricting series to closing
transactions is a better way to transition the class to a delisted
state than the current method of not adding additional series and
allowing market participants to continue to add new positions in the
existing series. Restricting trading to closing transactions encourages
market participants to close transactions, which helps to limit any
potential negative effects associated with delisting a class. For
example, restricting trading to closing transactions helps prevent
market participants from adding new positions that cannot be rolled
into the following expiration (a common options strategy).
The Exchange notes that this proposal is consistent with the manner
in which Rule 5.4 operates in relation to option classes with
underlying securities that no longer meet the requirements for
approval--additional series are not added, series with open interest
are restricted to closing only, and series without open interest are
delisted. As proposed, when the Exchange seeks to delist an option
class with an underlying security that continues to meet the
requirements for approval the Exchange will not open additional series
in the option class and will restrict trading to closing transactions.
Also consistent with current Rule 5.4, opening transactions by Market-
Makers executed to accommodate closing transactions of other market
participants and opening transactions by TPH organizations to
facilitate the closing transactions of public customers executed as
crosses pursuant to and in accordance with Cboe Rule 6.74(b) or
[[Page 60780]]
(d) may be permitted. Allowing Market-Makers and TPH organizations to
facilitate closing transactions of public customers will help public
customers close positions in classes that will be delisted by the
Exchange, which helps to protect investors and the public interest. It
is reasonable to restrict series to closing only pursuant to current
Rule 5.4 when underlying securities no longer meet requirements for
approval. The Exchange believes it is also reasonable to restrict
series to closing when the options class no longer satisfies business
justifications for listing the class.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\11\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \12\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \13\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
\13\ Id.
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In particular, when seeking to delist an option class--whether or
not the underlying security continues to meet the requirements for
approval--the Exchange believes that restricting series to closing
transactions is a better way to transition the class to a delisted
state than the current method of not adding additional series and
allowing market participants to continue to add new positions in the
existing series. Restricting trading to closing transactions encourages
market participants to close transactions, which helps to limit any
potential negative effects associated with delisting a class and helps
to protect customers and the public interest.
The Exchange notes that this proposal is consistent with the manner
in which Rule 5.4 operates in relation to option classes with
underlying securities that no longer meet the requirements for
approval--additional series are not added, series with open interest
are restricted to closing only, and series without open interest are
delisted. As proposed, when the Exchange seeks to delist an option
class with an underlying security that continues to meet the
requirements for approval the Exchange will not open additional series
in the option class and will restrict trading to closing transactions.
Also consistent with current Rule 5.4, opening transactions by Market-
Makers executed to accommodate closing transactions of other market
participants and opening transactions by TPH organizations to
facilitate the closing transactions of public customers executed as
crosses pursuant to and in accordance with Cboe Rule 6.74(b) or (d) may
be permitted. Allowing Market-Makers and TPH organizations to
facilitate closing transactions of public customers will help public
customers close positions in classes that will be delisted by the
Exchange, which helps to protect investors and the public interest. It
is reasonable to restrict series to closing only pursuant to current
Rule 5.4 when underlying securities no longer meet requirements for
approval. The Exchange believes it is also reasonable to restrict
series to closing when the option class no longer satisfies business
justifications for listing the class.
B. Self-Regulatory Organization's Statement on Burden on Competition
Cboe does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. This proposed rule change is
consistent with the manner in which Rule 5.4 operates in relation to
option classes with underlying securities that no longer meet the
requirements for approval--additional series are not added, series with
open interest are restricted to closing only, and series without open
interest are delisted. Also consistent with current Rule 5.4, opening
transactions by Market-Makers executed to accommodate closing
transactions of other market participants and opening transactions by
TPH organizations to facilitate the closing transactions of public
customers executed as crosses pursuant to and in accordance with Cboe
Rule 6.74(b) or (d) may be permitted. Allowing Market-Makers and TPH
organizations to facilitate closing transactions of public customers
will help public customers close positions in classes that will be
delisted by the Exchange, which helps to protect investors and the
public interest and does not impose any burden on competition that is
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
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
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 from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \14\ and
subparagraph (f)(6) Rule 19b-4 thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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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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.
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:
[[Page 60781]]
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2017-076 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-CBOE-2017-076. 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 (https://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-CBOE-2017-076 and should be submitted on
or before January 12, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-27564 Filed 12-21-17; 8:45 am]
BILLING CODE 8011-01-P
