Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Clarify the SPX Select Market-Maker Program, 29848-29850 [2018-13615]

Download as PDF 29848 Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83476; File No. SR–CBOE– 2018–044] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Clarify the SPX Select Market-Maker Program June 20, 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 June 8, 2018, 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 proposes to amend its Fees Schedule relating to the SPX Select Market-Maker Program. 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. sradovich on DSK3GMQ082PROD with NOTICES 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. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 2 17 VerDate Sep<11>2014 17:24 Jun 25, 2018 Jkt 244001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to clarify text in its Fees Schedule relating to the SPX Select Market-Maker (‘‘SMM’’) Program. By way of background, the Exchange recently established a financial incentive program for SPX SMMs, which provides that any appointed SPX SMM will receive a monthly waiver of the cost of one Market-Maker Trading Permit and one SPX Tier Appointment provided that the SMM satisfies a heightened quoting standard for that month, which standard is set forth in Footnote 49 of the Fees Schedule. Footnote 49 currently provides that an SMM will receive the monthly Trading Permit and SPX Tier Appointment waiver if it (1) provides continuous electronic quotes in 95% of all SPX series 90% of the time in a given month, (2) submits opening quotes that are no wider than the Opening Exchange Prescribed Width (‘‘OEPW’’) within one minute of the initiation of an opening rotation in any series that is not open due to the lack of a qualifying quote, on all trading days, to ensure electronic quotes on the open that allow the series to open, (3) submits opening quotes that are no wider than the OEPW quote by 8:00 a.m. (CT) on volatility settlement days and (4) provides quotes for the end-of-month fair value closing rotation on a rotating basis. The Exchange proposes to clarify the criteria currently set forth in the third prong of the heightened quoting standard, described above. Specifically, the Exchange proposes to add text that explicitly provides that to satisfy the third prong, an SMM must submit opening quotes that are no wider than the OEPW quote by 8:00 a.m. CST on volatility ‘‘index derivative’’ settlement days ‘‘in the SPX series that expire in the month used to calculate the settlement value for expiring volatility index derivatives.’’ The Exchange notes that this prong was included as part of the heightened quoting standard to encourage SMM participation prior to the opening on volatility index derivative settlement days to increase liquidity in the SPX series used to calculate the settlement value, which is desirable to ensure these series open at competitive prices on expiration days for volatility index derivatives and thus ensure a fair and orderly opening and settlement process. While liquidity is important to open all series on the Exchange, given the potential impact on the exercise settlement value PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 determined for expiring volatility index derivatives, the Exchange believes it is appropriate to ensure a fair and orderly opening of the series used to calculate the exercise settlement value. The Exchange calculates the settlement value for expiring volatility index derivatives using the opening pricings of SPX options that expire 30 days later. All other SPX series are not used by the Exchange to determine the exercise settlement value. As such, the Exchange doesn’t believe that it is appropriate to require SMMs to submit opening quotes that are no wider than the OEPW by 8:00 a.m. (CT) on volatility index derivative settlement days in all SPX options series, if only a subset of SPX options series are used in the settlement value calculation. In order to alleviate any confusion, the Exchange wishes to make clear that the third prong, as originally written, does not encompass all SPX options series. Rather, the third prong requires only the submission of opening quotes prior to 8:00 a.m. CT on volatility index derivative settlement days that are no wider than the OEPW in the series that expire in the month used to calculate the volatility index derivative settlement value. With respect to the remaining SPX options series, the Exchange notes that SMMs already are required pursuant to prong 2 to submit opening quotes that are no wider than the OEPW within one minute of the initiation of an opening rotation in any series that is not open due to the lack of a qualifying quote, on all trading days, to ensure electronic quotes on the open that allow the series to open. 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.5 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 6 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 5 15 6 15 E:\FR\FM\26JNN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(5). 26JNN1 Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Notices investors and the public interest. Additionally, the Exchange believes the proposed rule change is consistent with Section 6(b)(4) of the Act,7 which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its Trading Permit Holders and other persons using its facilities. The Exchange believes clarifying the third prong in Footnote 49 helps avoid confusion by making clear which SPX series are subject to the quoting criteria in the third prong of the SMM heighted quoting standard. The alleviation of confusion removes impediments to, and perfects the mechanism of, a free and open market and a national market system and protects investors and the public interest. Additionally, the Exchange believes that the proposed clarification in Footnote 49 is reasonable because the third prong is meant to specifically address liquidity on volatility index derivative settlement days that ensure a fair and orderly opening and settlement process and not address liquidity in SPX options series generally. 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 intramarket or intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed clarification is intended to make clear in the Fees Schedule which SPX options series are subject to the criteria contained in the third prong of the heightened quoting standard in order to maintain transparency in the rules and alleviate confusion. The proposed change also applies to SPX, which is only traded on Cboe Options. The Exchange believes the proposed change therefore does not raise any competitive issues. sradovich on DSK3GMQ082PROD with NOTICES 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 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 7 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 17:24 Jun 25, 2018 Jkt 244001 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) of the Act 8 and Rule 19b– 4(f)(6) thereunder.9 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 10 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 11 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 five-day prefiling requirement and the 30-day operative delay so that the proposal may become operative immediately upon filing. According to the Exchange, without the waivers, the Fees Schedule would reflect a quoting standard that may be confusing to SPX SMMs. The Commission hereby waives the prefiling requirement and finds that waiver of the operative delay is consistent with the protection of investors and the public interest. In particular, the proposal does not raise any new or novel issues, and waiver of the prefiling requirement and operative delay will allow to the Exchange to immediately clarify the operation of its SPX Select MarketMaker Program. Therefore, the Commission hereby waives the prefiling requirement and the operative delay and designates the proposal operative upon filing.12 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 change should be approved or disapproved. 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). Rule 19b–4(f)(6)(iii) requires the Exchange to provide the Commission with 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 asked the Commission to waive this requirement. 10 17 CFR 240.19b–4(f)(6). 11 17 CFR 240.19b–4(f)(6)(iii). 12 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). 9 17 PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 29849 IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CBOE–2018–044 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–2018–044. 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–2018–044 and should be submitted on or before July 17, 2018. E:\FR\FM\26JNN1.SGM 26JNN1 29850 Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–13615 Filed 6–25–18; 8:45 am] BILLING CODE 8011–01–P Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE, Washington, DC 20549 or send an email to: PRA_Mailbox@ sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: June 21, 2018. Eduardo A. Aleman, Assistant Secretary. SECURITIES AND EXCHANGE COMMISSION [FR Doc. 2018–13686 Filed 6–25–18; 8:45 am] BILLING CODE 8011–01–P Submission for OMB Review; Comment Request Upon Written Request Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 sradovich on DSK3GMQ082PROD with NOTICES Extension: Form F–X, SEC File No. 270–336, OMB Control No. 3235–0379 Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget this request for extension of the previously approved collection of information discussed below. Form F–X (17 CFR 239.42) is used to appoint an agent for service of process by Canadian issuers registering securities on Forms F–7, F–8, F–9 or F– 10 under the Securities Act of 1933 (15 U.S.C. 77a et seq.), or filing periodic reports on Form 40–F under the Exchange Act of 1934 (15 U.S.C. 78a et seq.). The information collected must be filed with the Commission and is publicly available. We estimate it takes approximately 2 hours per response to prepare Form F–X and the information is filed by approximately 114 respondents for a total annual reporting burden of 228 hours (2 hours per response × 114 responses). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. The public may view the background documentation for this information collection at the following website, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_ Ahmed@omb.eop.gov; and (ii) Pamela Dyson, Director/Chief Information SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83477; File No. 4–709] Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d– 2; Notice of Filing and Order Approving and Declaring Effective an Amended Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and BOX Options Exchange LLC June 20, 2018. Notice is hereby given that the Securities and Exchange Commission (‘‘Commission’’) has issued an Order, pursuant to Section 17(d) of the Securities Exchange Act of 1934 (‘‘Act’’),1 approving and declaring effective an amendment to the plan for allocating regulatory responsibility (‘‘Plan’’) filed on June 13, 2018, pursuant to Rule 17d–2 of the Act,2 by the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) and BOX Options Exchange LLC (‘‘BOX’’) (collectively, ‘‘Participating Organizations’’ or ‘‘parties’’). This agreement amends and restates the agreement entered into between FINRA and BOX on March 2, 2017, entitled ‘‘Agreement Between Financial Industry Regulatory Authority, Inc. and BOX Options Exchange LLC Pursuant to Rule 17d–2 under the Securities Exchange Act of 1934,’’ and any subsequent amendments thereafter. I. Introduction Section 19(g)(1) of the Act,3 among other things, requires every selfregulatory organization (‘‘SRO’’) registered as either a national securities exchange or national securities association to examine for, and enforce compliance by, its members and persons associated with its members with the Act, the rules and regulations thereunder, and the SRO’s own rules, 1 15 U.S.C. 78q(d). CFR 240.17d–2. 3 15 U.S.C. 78s(g)(1). 2 17 13 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:24 Jun 25, 2018 Jkt 244001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 unless the SRO is relieved of this responsibility pursuant to Section 17(d) 4 or Section 19(g)(2) 5 of the Act. Without this relief, the statutory obligation of each individual SRO could result in a pattern of multiple examinations of broker-dealers that maintain memberships in more than one SRO (‘‘common members’’). Such regulatory duplication would add unnecessary expenses for common members and their SROs. Section 17(d)(1) of the Act 6 was intended, in part, to eliminate unnecessary multiple examinations and regulatory duplication.7 With respect to a common member, Section 17(d)(1) authorizes the Commission, by rule or order, to relieve an SRO of the responsibility to receive regulatory reports, to examine for and enforce compliance with applicable statutes, rules, and regulations, or to perform other specified regulatory functions. To implement Section 17(d)(1), the Commission adopted two rules: Rule 17d–1 and Rule 17d–2 under the Act.8 Rule 17d–1 authorizes the Commission to name a single SRO as the designated examining authority (‘‘DEA’’) to examine common members for compliance with the financial responsibility requirements imposed by the Act, or by Commission or SRO rules.9 When an SRO has been named as a common member’s DEA, all other SROs to which the common member belongs are relieved of the responsibility to examine the firm for compliance with the applicable financial responsibility rules. On its face, Rule 17d–1 deals only with an SRO’s obligations to enforce member compliance with financial responsibility requirements. Rule 17d–1 does not relieve an SRO from its obligation to examine a common member for compliance with its own rules and provisions of the federal securities laws governing matters other than financial responsibility, including sales practices and trading activities and practices. To address regulatory duplication in these and other areas, the Commission adopted Rule 17d–2 under the Act.10 Rule 17d–2 permits SROs to propose 4 15 U.S.C. 78q(d). U.S.C. 78s(g)(2). 6 15 U.S.C. 78q(d)(1). 7 See Securities Act Amendments of 1975, Report of the Senate Committee on Banking, Housing, and Urban Affairs to Accompany S. 249, S. Rep. No. 94– 75, 94th Cong., 1st Session 32 (1975). 8 17 CFR 240.17d–1 and 17 CFR 240.17d–2, respectively. 9 See Securities Exchange Act Release No. 12352 (April 20, 1976), 41 FR 18808 (May 7, 1976). 10 See Securities Exchange Act Release No. 12935 (October 28, 1976), 41 FR 49091 (November 8, 1976). 5 15 E:\FR\FM\26JNN1.SGM 26JNN1

Agencies

[Federal Register Volume 83, Number 123 (Tuesday, June 26, 2018)]
[Notices]
[Pages 29848-29850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13615]



[[Page 29848]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83476; File No. SR-CBOE-2018-044]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Clarify 
the SPX Select Market-Maker Program

June 20, 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 June 8, 2018, 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 proposes to amend its Fees Schedule relating to the 
SPX Select Market-Maker Program.
    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 is proposing to clarify text in its Fees Schedule 
relating to the SPX Select Market-Maker (``SMM'') Program. By way of 
background, the Exchange recently established a financial incentive 
program for SPX SMMs, which provides that any appointed SPX SMM will 
receive a monthly waiver of the cost of one Market-Maker Trading Permit 
and one SPX Tier Appointment provided that the SMM satisfies a 
heightened quoting standard for that month, which standard is set forth 
in Footnote 49 of the Fees Schedule. Footnote 49 currently provides 
that an SMM will receive the monthly Trading Permit and SPX Tier 
Appointment waiver if it (1) provides continuous electronic quotes in 
95% of all SPX series 90% of the time in a given month, (2) submits 
opening quotes that are no wider than the Opening Exchange Prescribed 
Width (``OEPW'') within one minute of the initiation of an opening 
rotation in any series that is not open due to the lack of a qualifying 
quote, on all trading days, to ensure electronic quotes on the open 
that allow the series to open, (3) submits opening quotes that are no 
wider than the OEPW quote by 8:00 a.m. (CT) on volatility settlement 
days and (4) provides quotes for the end-of-month fair value closing 
rotation on a rotating basis.
    The Exchange proposes to clarify the criteria currently set forth 
in the third prong of the heightened quoting standard, described above. 
Specifically, the Exchange proposes to add text that explicitly 
provides that to satisfy the third prong, an SMM must submit opening 
quotes that are no wider than the OEPW quote by 8:00 a.m. CST on 
volatility ``index derivative'' settlement days ``in the SPX series 
that expire in the month used to calculate the settlement value for 
expiring volatility index derivatives.'' The Exchange notes that this 
prong was included as part of the heightened quoting standard to 
encourage SMM participation prior to the opening on volatility index 
derivative settlement days to increase liquidity in the SPX series used 
to calculate the settlement value, which is desirable to ensure these 
series open at competitive prices on expiration days for volatility 
index derivatives and thus ensure a fair and orderly opening and 
settlement process. While liquidity is important to open all series on 
the Exchange, given the potential impact on the exercise settlement 
value determined for expiring volatility index derivatives, the 
Exchange believes it is appropriate to ensure a fair and orderly 
opening of the series used to calculate the exercise settlement value. 
The Exchange calculates the settlement value for expiring volatility 
index derivatives using the opening pricings of SPX options that expire 
30 days later. All other SPX series are not used by the Exchange to 
determine the exercise settlement value. As such, the Exchange doesn't 
believe that it is appropriate to require SMMs to submit opening quotes 
that are no wider than the OEPW by 8:00 a.m. (CT) on volatility index 
derivative settlement days in all SPX options series, if only a subset 
of SPX options series are used in the settlement value calculation. In 
order to alleviate any confusion, the Exchange wishes to make clear 
that the third prong, as originally written, does not encompass all SPX 
options series. Rather, the third prong requires only the submission of 
opening quotes prior to 8:00 a.m. CT on volatility index derivative 
settlement days that are no wider than the OEPW in the series that 
expire in the month used to calculate the volatility index derivative 
settlement value. With respect to the remaining SPX options series, the 
Exchange notes that SMMs already are required pursuant to prong 2 to 
submit opening quotes that are no wider than the OEPW within one minute 
of the initiation of an opening rotation in any series that is not open 
due to the lack of a qualifying quote, on all trading days, to ensure 
electronic quotes on the open that allow the series to open.
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.\5\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \6\ 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

[[Page 29849]]

investors and the public interest. Additionally, the Exchange believes 
the proposed rule change is consistent with Section 6(b)(4) of the 
Act,\7\ which requires that Exchange rules provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
Trading Permit Holders and other persons using its facilities.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes clarifying the third prong in Footnote 49 
helps avoid confusion by making clear which SPX series are subject to 
the quoting criteria in the third prong of the SMM heighted quoting 
standard. The alleviation of confusion removes impediments to, and 
perfects the mechanism of, a free and open market and a national market 
system and protects investors and the public interest. Additionally, 
the Exchange believes that the proposed clarification in Footnote 49 is 
reasonable because the third prong is meant to specifically address 
liquidity on volatility index derivative settlement days that ensure a 
fair and orderly opening and settlement process and not address 
liquidity in SPX options series generally.

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 intramarket or intermarket competition that is not 
necessary or appropriate in furtherance of the purposes of the Act. The 
proposed clarification is intended to make clear in the Fees Schedule 
which SPX options series are subject to the criteria contained in the 
third prong of the heightened quoting standard in order to maintain 
transparency in the rules and alleviate confusion. The proposed change 
also applies to SPX, which is only traded on Cboe Options. The Exchange 
believes the proposed change therefore does not raise any competitive 
issues.

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 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) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6)(iii) requires the 
Exchange to provide the Commission with 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 asked 
the Commission to waive this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \11\ 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 five-day prefiling requirement 
and the 30-day operative delay so that the proposal may become 
operative immediately upon filing. According to the Exchange, without 
the waivers, the Fees Schedule would reflect a quoting standard that 
may be confusing to SPX SMMs. The Commission hereby waives the 
prefiling requirement and finds that waiver of the operative delay is 
consistent with the protection of investors and the public interest. In 
particular, the proposal does not raise any new or novel issues, and 
waiver of the prefiling requirement and operative delay will allow to 
the Exchange to immediately clarify the operation of its SPX Select 
Market-Maker Program. Therefore, the Commission hereby waives the 
prefiling requirement and the operative delay and designates the 
proposal operative upon filing.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ 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 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:

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-2018-044 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-2018-044. 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-2018-044 and should be submitted on 
or before July 17, 2018.


[[Page 29850]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-13615 Filed 6-25-18; 8:45 am]
 BILLING CODE 8011-01-P
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