Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Modify Rule 21.9 of the Exchange's Rules and Related Functionality Applicable to the Routing Options Made Available by the Exchange's Equity Options Platform, 16140-16142 [2018-07676]
Download as PDF
<![CDATA[
16140
Federal Register / Vol. 83, No. 72 / Friday, April 13, 2018 / Notices
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CboeBZX–2018–023 on the subject line.
daltland on DSKBBV9HB2PROD with NOTICES
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–CboeBZX–2018–023. 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–CboeBZX–2018–023 and
should be submitted on or before May
4, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–07674 Filed 4–12–18; 8:45 am]
BILLING CODE 8011–01–P
18 17
17:41 Apr 12, 2018
[Release No. 34–83021; File No. SR–
CboeBZX–2018–026]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change to Modify Rule
21.9 of the Exchange’s Rules and
Related Functionality Applicable to the
Routing Options Made Available by the
Exchange’s Equity Options Platform
April 9, 2018.
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 April 2,
2018, Cboe BZX Exchange, Inc. (the
‘‘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 Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. 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 filed a proposal to
modify Rule 21.9 of the Exchange’s
rules and related functionality
applicable to the routing options made
available by the Exchange’s equity
options platform (‘‘BZX Options’’).
The text of the proposed rule change
is available at the Exchange’s website at
www.markets.cboe.com, at the principal
office of the Exchange, 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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
2 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
SECURITIES AND EXCHANGE
COMMISSION
Jkt 244001
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
forth in Sections A, B, and C below, of
the most significant parts 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 modify
Rule 21.9 to modify the description of
two existing routing strategies (without
modifying such strategies) and to adopt
a new routing strategy. Exchange Rule
21.9 describes various options to route
orders away from BZX Options to other
options exchanges. Rule 21.9(a)(2)(A)
describes Parallel D routing as a routing
option under which an order checks the
System 5 for available contracts and then
is sent to destinations on the System
routing table. Parallel 2D is described in
Rule 21.9(a)(2)(B) in the same way. To
distinguish the two options, however,
Parallel D routing is described as a
routing option that may route to
multiple destinations at a single price
level simultaneously whereas Parallel
2D routing is described as a routing
option that may route to multiple
destinations and at multiple price levels
simultaneously. The Exchange proposes
to retain this functionality but to change
the refer to the routing strategy
equivalent to both Parallel D and
Parallel 2D as the ROUT routing option
and then to specify that a User 6 may
select either Route To Improve (‘‘RTI’’)
or Route To Fill (‘‘RTF’’) for the ROUT
routing option, thus capturing the
distinction between the two strategies.
In other words, the RTI routing option
would continue to function as the
Parallel D routing option is described
(i.e., routing at a single price level) and
the RTF would continue to function as
the Parallel 2D routing option is
described (i.e. routing at multiple price
levels). The proposed description is
substantively identical to and based on
the description employed for the
Exchange’s cash equities trading
platform (‘‘BZX Equities’’).7 The
Exchange does not propose any other
changes to these routing options.
The Exchange also proposes to adopt
the SWPA routing option based on a
similar routing option offered with
respect to BZX Equities. Specifically, as
proposed, SWPA would be a routing
option under which an order checks the
5 The ‘‘System’’ is the automated trading system
used by BZX Options for the trading of options
contracts. See Rule 16.1(a)(59).
6 The term ‘‘User’’ means any Options Member or
Sponsored Participant who is authorized to obtain
access to the Exchange’s System pursuant to Rule
11.3. See Rule 16.1(a)(63).
7 See BZX Rule 11.13(b)(3)(G).
E:\FR\FM\13APN1.SGM
13APN1
Federal Register / Vol. 83, No. 72 / Friday, April 13, 2018 / Notices
System for available contracts and then
is sent to only Protected Quotations 8
and only for displayed size. Further, to
the extent that any portion of the routed
order is unexecuted, the remainder is
posted to the BZX Options Book at the
order’s limit price, unless otherwise
instructed by the User. This proposed
routing strategy is based on and similar
to BZX Rule 11.13(b)(3)(I), which
describes the SWPA routing strategy for
BZX Equities. However, the Exchange
has proposed language describing
SWPA on BZX Options instead on rule
text of its affiliate, Cboe EDGX
Exchange, Inc. (‘‘EDGX’’), which also
offers the SWPA routing strategy for its
cash equities trading platform (‘‘EDGX
Equities’’).9 The proposed rule text for
BZX Options’ version of SWPA is
specifically based on EDGX Rule
11.11(g)(9), and is identical except for
references to ‘‘contracts’’ instead of
‘‘shares’’ and reference to the ‘‘BZX
Options Book’’ instead of the ‘‘EDGX
Book.’’ The Exchange also has not
proposed to adopt the final sentence of
the routing strategy as defined for EDGX
Equities because that sentence is only
necessary to differentiate the SWPA
routing strategy from the SWPB routing
strategy and the Exchange is not
proposing to adopt SWPB routing for
BZX Options.
2. Statutory Basis
daltland on DSKBBV9HB2PROD with NOTICES
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 10 in general, and furthers the
objectives of Section 6(b)(5) of the Act 11
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest. The
change to the references to the Parallel
D and Parallel 2D routing options are
intended to align the Exchange’s routing
strategies between BZX Equities and
BZX Options. As noted above, there is
8 The term Protected Quotation is defined in BZX
Rule 27.1(a)(19) and has the same meaning as is set
forth in Regulation NMS Rule 600(b)(58).
9 Although BZX Equities also offers the SWPA
routing strategy, its description is formatted
differently than the EDGX Equities version. In turn,
because EDGX is simultaneously proposing to adopt
a SWPA routing strategy for its options trading
platform (‘‘EDGX Options’’) based on the EDGX
Equities description, the Exchange believes it is
preferable to retain consistency between BZX
Options and EDGX Options. Accordingly, the
Exchange has proposed to follow the structure of
the EDGX Equities description rather than the BZX
Equities description.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
VerDate Sep<11>2014
19:04 Apr 12, 2018
Jkt 244001
no substantive change to the operation
of the strategies.
The proposed rule change also is
designed to support the principles of
Section 11A(a)(1) 12 of the Act in that it
seeks to assure fair competition among
brokers and dealers and among
exchange markets. In particular, the
proposed change to introduce an
additional routing strategy will provide
market participants with greater
flexibility in routing orders consistent
with the options market Options Order
Protection and Locked/Crossed Market
Plan without developing order routing
strategies on their own. The Exchange
again notes that the proposed routing
strategy is based on and substantively
identical to a routing option offered by
BZX Equities.13
(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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange notes that the proposal will
further promote consistency between
the Exchange’s trading platforms for
BZX Equities and BZX Options. The
Exchange does not believe that the
proposed changes will have any impact
on inter-market competition as the
proposed SWPA routing strategy will be
available to all Users. The Exchange
does not believe that the proposed
SWPA routing strategy will impose any
burden on intra-market competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange provides routing services
in a highly competitive market in which
participants may avail themselves of a
wide variety of routing options offered
by self-regulatory organizations, other
broker-dealers, market participants’ own
proprietary routing systems, and service
bureaus. In such an environment,
system enhancements such as the
changes proposed in this rule filing do
not burden competition, because they
can succeed in attracting order flow to
the Exchange only if they offer investors
higher quality and better value than
services offered by others.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any written
12 15
U.S.C. 78k–1(a)(1).
EDGX Rule 11.11(g)(9).
13 See
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
16141
comments from members or other
interested parties.
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)14 of the Act and Rule 19b–
4(f)(6) thereunder.15
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 16 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 17
permits the Commission to 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 proposal may
become operative immediately upon
filing. The Exchange states that waiver
of the 30-day operative delay would
allow Exchange Users to more quickly
benefit from this proposed rule change
and would be consistent with routing
options that are already available on
BZX Equities. Based on the foregoing,
the Commission believes the waiver of
the operative delay is consistent with
the protection of investors and the
public interest. Therefore, the
Commission hereby waives the
operative delay and designates the
proposal operative upon filing.18
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
14 15
U.S.C. 78s(b)(3)(A).
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 the 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.
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
18 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).
15 17
E:\FR\FM\13APN1.SGM
13APN1
16142
Federal Register / Vol. 83, No. 72 / Friday, April 13, 2018 / Notices
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 proposal is
consistent with the Act. Comments may
be submitted by any of the following
methods:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–07676 Filed 4–12–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–83020; File No. SR–
CboeEDGX–2018–011]
• 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 No. SR–
CboeBZX–2018–026 on the subject line.
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Rule
19.3, Criteria for Underlying Securities
Paper Comments
daltland on DSKBBV9HB2PROD with NOTICES
• 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 No.
SR–CboeBZX–2018–026. 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 such
filing will also 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 No.
SR–CboeBZX–2018–026 and should be
submitted on or before May 4, 2018.
VerDate Sep<11>2014
17:41 Apr 12, 2018
Jkt 244001
April 9, 2018.
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 March 29,
2018, Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX Options’’) 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
Exchange has designated this proposal
as a ‘‘non-controversial’’ proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. 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 filed a proposal to
amend Rule 19.3(b).
(additions are italicized; deletions are
[bracketed])
*
*
*
*
*
Cboe EDGX Exchange, Inc. Rules
*
*
*
*
*
Rule 19.3. Criteria for Underlying
Securities
(a) (No change).
(b) In addition, the Exchange shall
from time to time establish standards to
be considered in evaluating potential
underlying securities for EDGX Options
options transactions. There are many
relevant factors which must be
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
1 15
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
considered in arriving at such a
determination, and the fact that a
particular security may meet the
standards established by the Exchange
does not necessarily mean that it will be
selected as an underlying security. The
Exchange may give consideration to
maintaining diversity among various
industries and issuers in selecting
underlying securities. Notwithstanding
the foregoing, an underlying security
will not be selected unless:
(1)–(4) (No change).
(5) Either:
(A) if the underlying security is a
‘‘covered security’’ as defined under
Section 18(b)(1)(A) of the Securities Act
of 1933, the market price per share of
the underlying security has been at least
$3.00 for the previous [five]three
consecutive business days preceding the
date on which the Exchange submits a
certificate to the Clearing Corporation
for listing and trading, as measured by
the closing price reported in the primary
market in which the underlying security
is traded; or
(B) (No change).
(c)–(m) (No change).
*
*
*
*
*
The text of the proposed rule change
is available at the Exchange’s website at
www.markets.cboe.com, at the principal
office of the Exchange, 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 parts of such
statements.
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 19.3, Criteria for Underlying
Securities, to modify the criteria for
listing options on an underlying
security as defined in Section
18(b)(1)(A) of the Securities Act of 1933
(hereinafter ‘‘covered security’’ or
‘‘covered securities’’). This is a
competitive filing that is based on a
proposal recently submitted by Nasdaq
E:\FR\FM\13APN1.SGM
13APN1
]]>Agencies
[Federal Register Volume 83, Number 72 (Friday, April 13, 2018)]
[Notices]
[Pages 16140-16142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-07676]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83021; File No. SR-CboeBZX-2018-026]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to Modify
Rule 21.9 of the Exchange's Rules and Related Functionality Applicable
to the Routing Options Made Available by the Exchange's Equity Options
Platform
April 9, 2018.
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 April 2, 2018, Cboe BZX Exchange, Inc. (the ``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 Exchange has designated this
proposal as a ``non-controversial'' proposed rule change pursuant to
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)(iii)
thereunder,\4\ which renders it effective upon filing with the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to modify Rule 21.9 of the Exchange's
rules and related functionality applicable to the routing options made
available by the Exchange's equity options platform (``BZX Options'').
The text of the proposed rule change is available at the Exchange's
website at www.markets.cboe.com, at the principal office of the
Exchange, 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 parts 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 modify Rule 21.9 to modify the description
of two existing routing strategies (without modifying such strategies)
and to adopt a new routing strategy. Exchange Rule 21.9 describes
various options to route orders away from BZX Options to other options
exchanges. Rule 21.9(a)(2)(A) describes Parallel D routing as a routing
option under which an order checks the System \5\ for available
contracts and then is sent to destinations on the System routing table.
Parallel 2D is described in Rule 21.9(a)(2)(B) in the same way. To
distinguish the two options, however, Parallel D routing is described
as a routing option that may route to multiple destinations at a single
price level simultaneously whereas Parallel 2D routing is described as
a routing option that may route to multiple destinations and at
multiple price levels simultaneously. The Exchange proposes to retain
this functionality but to change the refer to the routing strategy
equivalent to both Parallel D and Parallel 2D as the ROUT routing
option and then to specify that a User \6\ may select either Route To
Improve (``RTI'') or Route To Fill (``RTF'') for the ROUT routing
option, thus capturing the distinction between the two strategies. In
other words, the RTI routing option would continue to function as the
Parallel D routing option is described (i.e., routing at a single price
level) and the RTF would continue to function as the Parallel 2D
routing option is described (i.e. routing at multiple price levels).
The proposed description is substantively identical to and based on the
description employed for the Exchange's cash equities trading platform
(``BZX Equities'').\7\ The Exchange does not propose any other changes
to these routing options.
---------------------------------------------------------------------------
\5\ The ``System'' is the automated trading system used by BZX
Options for the trading of options contracts. See Rule 16.1(a)(59).
\6\ The term ``User'' means any Options Member or Sponsored
Participant who is authorized to obtain access to the Exchange's
System pursuant to Rule 11.3. See Rule 16.1(a)(63).
\7\ See BZX Rule 11.13(b)(3)(G).
---------------------------------------------------------------------------
The Exchange also proposes to adopt the SWPA routing option based
on a similar routing option offered with respect to BZX Equities.
Specifically, as proposed, SWPA would be a routing option under which
an order checks the
[[Page 16141]]
System for available contracts and then is sent to only Protected
Quotations \8\ and only for displayed size. Further, to the extent that
any portion of the routed order is unexecuted, the remainder is posted
to the BZX Options Book at the order's limit price, unless otherwise
instructed by the User. This proposed routing strategy is based on and
similar to BZX Rule 11.13(b)(3)(I), which describes the SWPA routing
strategy for BZX Equities. However, the Exchange has proposed language
describing SWPA on BZX Options instead on rule text of its affiliate,
Cboe EDGX Exchange, Inc. (``EDGX''), which also offers the SWPA routing
strategy for its cash equities trading platform (``EDGX Equities'').\9\
The proposed rule text for BZX Options' version of SWPA is specifically
based on EDGX Rule 11.11(g)(9), and is identical except for references
to ``contracts'' instead of ``shares'' and reference to the ``BZX
Options Book'' instead of the ``EDGX Book.'' The Exchange also has not
proposed to adopt the final sentence of the routing strategy as defined
for EDGX Equities because that sentence is only necessary to
differentiate the SWPA routing strategy from the SWPB routing strategy
and the Exchange is not proposing to adopt SWPB routing for BZX
Options.
---------------------------------------------------------------------------
\8\ The term Protected Quotation is defined in BZX Rule
27.1(a)(19) and has the same meaning as is set forth in Regulation
NMS Rule 600(b)(58).
\9\ Although BZX Equities also offers the SWPA routing strategy,
its description is formatted differently than the EDGX Equities
version. In turn, because EDGX is simultaneously proposing to adopt
a SWPA routing strategy for its options trading platform (``EDGX
Options'') based on the EDGX Equities description, the Exchange
believes it is preferable to retain consistency between BZX Options
and EDGX Options. Accordingly, the Exchange has proposed to follow
the structure of the EDGX Equities description rather than the BZX
Equities description.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \10\ in general, and furthers the objectives of Section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. The change to the references to the Parallel D and Parallel
2D routing options are intended to align the Exchange's routing
strategies between BZX Equities and BZX Options. As noted above, there
is no substantive change to the operation of the strategies.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The proposed rule change also is designed to support the principles
of Section 11A(a)(1) \12\ of the Act in that it seeks to assure fair
competition among brokers and dealers and among exchange markets. In
particular, the proposed change to introduce an additional routing
strategy will provide market participants with greater flexibility in
routing orders consistent with the options market Options Order
Protection and Locked/Crossed Market Plan without developing order
routing strategies on their own. The Exchange again notes that the
proposed routing strategy is based on and substantively identical to a
routing option offered by BZX Equities.\13\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78k-1(a)(1).
\13\ See EDGX Rule 11.11(g)(9).
---------------------------------------------------------------------------
(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 that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange notes that the
proposal will further promote consistency between the Exchange's
trading platforms for BZX Equities and BZX Options. The Exchange does
not believe that the proposed changes will have any impact on inter-
market competition as the proposed SWPA routing strategy will be
available to all Users. The Exchange does not believe that the proposed
SWPA routing strategy will impose any burden on intra-market
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange provides routing services in a highly
competitive market in which participants may avail themselves of a wide
variety of routing options offered by self-regulatory organizations,
other broker-dealers, market participants' own proprietary routing
systems, and service bureaus. In such an environment, system
enhancements such as the changes proposed in this rule filing do not
burden competition, because they can succeed in attracting order flow
to the Exchange only if they offer investors higher quality and better
value than services offered by others.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.
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)\14\ of the Act and Rule 19b-
4(f)(6) thereunder.\15\
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and the 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.
---------------------------------------------------------------------------
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \16\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the
Commission to 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 proposal may become operative immediately upon filing. The Exchange
states that waiver of the 30-day operative delay would allow Exchange
Users to more quickly benefit from this proposed rule change and would
be consistent with routing options that are already available on BZX
Equities. Based on the foregoing, the Commission believes the waiver of
the operative delay is consistent with the protection of investors and
the public interest. Therefore, the Commission hereby waives the
operative delay and designates the proposal operative upon filing.\18\
---------------------------------------------------------------------------
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ 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).
---------------------------------------------------------------------------
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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings
[[Page 16142]]
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 proposal is
consistent with the Act. Comments may be submitted by any of the
following methods:
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 No. SR-CboeBZX-2018-026 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 No. SR-CboeBZX-2018-026. 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 such filing will also 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 No. SR-CboeBZX-2018-026 and should be submitted on
or before May 4, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------
\19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-07676 Filed 4-12-18; 8:45 am]
BILLING CODE 8011-01-P
