Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Penny Pilot Program, 31592-31594 [2018-14467]
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31592
Federal Register / Vol. 83, No. 130 / Friday, July 6, 2018 / Notices
At any time within 60 days of the
filing of such 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
under Section 19(b)(2)(B) 16 of the Act 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:
daltland on DSKBBV9HB2PROD with 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–
C2–2018–015 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–C2–2018–015. 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
16 15
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–C2–2018–015 and should
be submitted on or before July 27, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–14468 Filed 7–5–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83567; File No. SR–CBOE–
2018–047]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to the Penny
Pilot Program
June 29, 2018.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder, 2
notice is hereby given that on June 26,
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 extend the
operation of Penny Pilot Program
through December 31, 2018. The text of
the proposed rule change is provided
below.
(additions are in italics; deletions are
[bracketed])
*
*
*
*
*
U.S.C. 78s(b)(2)(B).
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PO 00000
17 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)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
Frm 00067
Fmt 4703
Sfmt 4703
Cboe Exchange, Inc.
Rules
*
*
*
*
*
Rule 6.42. Minimum Increments for
Bids and Offers
The Board of Directors may establish
minimum increments for options traded
on the Exchange. When the Board of
Directors determines to change the
minimum increments, the Exchange
will designate such change as a stated
policy, practice, or interpretation with
respect to the administration of Rule
6.42 within the meaning of
subparagraph (3)(A) of subsection 19(b)
of the Exchange Act and will file a rule
change for effectiveness upon filing
with the Commission. Until such time
as the Board of Directors makes a
change to the minimum increments, the
following minimum increments shall
apply to options traded on the
Exchange:
(1) (No change).
(2) (No change).
(3) The decimal increments for bids
and offers for all series of the option
classes participating in the Penny Pilot
Program are: $0.01 for all option series
quoted below $3 (including LEAPS),
and $0.05 for all option series $3 and
above (including LEAPS). For QQQQs,
IWM, and SPY, the minimum increment
is $0.01 for all option series. The
Exchange may replace any option class
participating in the Penny Pilot Program
that has been delisted with the next
most actively-traded, multiply-listed
option class, based on national average
daily volume in the preceding six
calendar months that is not yet included
in the Pilot Program. Any replacement
class would be added on the second
trading day following [January 1, 2018]
July 1, 2018. The Penny Pilot shall
expire on [June 30, 2018] December 31,
2018.
(4) (No change).
. . . Interpretations and Policies:
.01–.04 (No change).
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/About
CBOE/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
E:\FR\FM\06JYN1.SGM
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Federal Register / Vol. 83, No. 130 / Friday, July 6, 2018 / Notices
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
daltland on DSKBBV9HB2PROD with NOTICES
The Penny Pilot Program (the ‘‘Pilot
Program’’) is scheduled to expire on
June 30, 2018. The Exchange proposes
to extend the Pilot Program until
December 31, 2018. The Exchange
believes that extending the Pilot
Program will allow for further analysis
of the Pilot Program and a
determination of how the Pilot Program
should be structured in the future.
During this extension of the Pilot
Program, the Exchange proposes that it
may replace any option class that is
currently included in the Pilot Program
and that has been delisted with the next
most actively traded, multiply listed
option class that is not yet participating
in the Pilot Program (‘‘replacement
class’’). Any replacement class would be
determined based on national average
daily volume in the preceding six
months,5 and would be added on the
second trading day following July 1,
2018. The Exchange will employ the
same parameters to prospective
replacement classes as approved and
applicable in determining the existing
classes in the Pilot Program, including
excluding high-priced underlying
securities.6 The Exchange will
announce to its Trading Permit Holders
by circular any replacement classes in
the Pilot Program.
The Exchange is specifically
authorized to act jointly with the other
options exchanges participating in the
Pilot Program in identifying any
replacement class. The Exchange lastly
represents that the Exchange has the
necessary system capacity to continue to
support operation of the Penny Pilot.
5 The month immediately preceding a
replacement class’s addition to the Pilot Program
(i.e., June) would not be used for purposes of the
six-month analysis. Thus, a replacement class to be
added on the second trading day following July 1,
2018 would be identified based on The Option
Clearing Corporation’s trading volume data from
December 1, 2017 through May 31, 2018.
6 See Securities Exchange Act Release No. 60864
(October 22, 2009), 74 FR 55876 (October 29, 2009)
(SR–CBOE–2009–76).
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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.7 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 8 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 facilitation 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) 9 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the proposed rule change
allows for an extension of the Pilot
Program for the benefit of market
participants. The Exchange notes that
this proposal does not propose any new
policies or provisions that are unique or
unproven, but instead relates to the
continuation of an existing program that
operates on a pilot basis.
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. Specifically,
the Exchange believes that, by extending
the expiration of the Pilot Program, the
proposed rule change will allow for
further analysis of the Pilot Program and
a determination of how the Program
shall be structured in the future. In
doing so, the proposed rule change will
also serve to promote regulatory clarity
and consistency, thereby reducing
burdens on the marketplace and
facilitating investor protection. In
addition, the Exchange has been
authorized to act jointly in extending
the Pilot Program and believes the other
exchanges will be filing similar
extensions.
PO 00000
7 15
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 Id.
Frm 00068
Fmt 4703
Sfmt 4703
31593
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and Rule
19b–4(f)(6) thereunder.11 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
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to
Section 19(b)(3)(A) of the Act and
Rule 19b–4(f)(6)(iii) thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 12 normally does not
become operative prior to 30 days after
the date of the filing.13 However,
pursuant to Rule 19b–4(f)(6)(iii),14 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because doing so will allow the Pilot
Program to continue without
interruption in a manner that is
consistent with the Commission’s prior
approval of the extension and expansion
of the Pilot Program and will allow the
Exchange and the Commission
additional time to analyze the impact of
10 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6).
13 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 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 pre-filing requirement.
14 17 CFR 240.19b–4(f)(6)(iii).
11 17
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31594
Federal Register / Vol. 83, No. 130 / Friday, July 6, 2018 / Notices
the Pilot Program.15 Accordingly, the
Commission designates the proposed
rule change as operative upon filing
with the Commission.16
At any time within 60 days of the
filing of such 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
under Section 19(b)(2)(B) 17 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
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–2018–047 and
should be submitted on or before July
27, 2018.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Eduardo A. Aleman,
Assistant Secretary.
Electronic Comments
[FR Doc. 2018–14467 Filed 7–5–18; 8:45 am]
• 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–2018–047 on the subject line.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83561; File No. SR–OCC–
2018–803]
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
Number SR–CBOE–2018–047 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
15 See Securities Exchange Act Release No. 61061
(November 24, 2009), 74 FR 62857 (December 1,
2009) (SR–NYSEArca–2009–44).
16 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
17 15 U.S.C. 78s(b)(2)(B).
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Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of Advance Notice, as
Modified by Amendment No. 1,
Concerning Proposed Changes to The
Options Clearing Corporation’s Stress
Testing and Clearing Fund
Methodology
June 29, 2018.
Pursuant to Section 806(e)(1) of Title
VIII of the Dodd-Frank Wall Street
Reform and Consumer Protection Act,
entitled Payment, Clearing and
Settlement Supervision Act of 2010
(‘‘Clearing Supervision Act’’) 1 and Rule
19b–4(n)(1)(i) 2 under the Securities
Exchange Act of 1934 (‘‘Exchange Act’’
or ‘‘Act’’),3 notice is hereby given that
on May 30, 2018, the Options Clearing
Corporation (‘‘OCC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) an advance notice as
described in Items I, II and III below,
which Items have been prepared by
OCC. On June 7, 2018, OCC filed
Amendment No. 1 to the advance
PO 00000
CFR 200.30–3(a)(12).
U.S.C. 5465(e)(1).
2 17 CFR 240.19b–4(n)(1)(i).
3 15 U.S.C. 78a et seq.
notice.4 The Commission is publishing
this notice to solicit comments on the
advance notice from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Advance
Notice
This advance notice is filed in
connection with proposed changes to
OCC’s By-Laws and Rules, the
formalization of a substantially new
Clearing Fund Methodology Policy
(‘‘Policy’’), and the adoption of a
document describing OCC’s new
Clearing Fund and stress testing
methodology (‘‘Methodology
Description’’). The proposed changes
are primarily designed to enhance
OCC’s overall resiliency, particularly
with respect to the level of OCC’s prefunded financial resources. Specifically,
the proposed changes would:
(1) Reorganize, restate, and
consolidate the provisions of OCC’s ByLaws and Rules relating to the Clearing
Fund into a newly revised Chapter X of
OCC’s Rules;
(2) modify the coverage level of OCC’s
Clearing Fund sizing requirement to
protect OCC against losses stemming
from the default of the two Clearing
Member Groups that would potentially
cause the largest aggregate credit
exposure for OCC in extreme but
plausible market conditions (i.e., adopt
a ‘‘Cover 2 Standard’’ for sizing the
Clearing Fund);
(3) adopt a new risk tolerance for OCC
to cover a 1-in-50 year hypothetical
market event at a 99.5% confidence
level over a two-year look-back period;
(4) adopt a new Clearing Fund and
stress testing methodology, which
would be underpinned by a new
scenario-based one-factor risk model
stress testing approach, as detailed in
the newly proposed Policy and
Methodology Description;
(5) document governance, monitoring,
and review processes related to Clearing
Fund and stress testing;
(6) provide for certain anti-procyclical
limitations on the reduction in Clearing
Fund size from month to month;
(7) increase the minimum Clearing
Fund contribution requirement for
Clearing Members to $500,000;
(8) modify OCC’s allocation weighting
methodology for Clearing Fund
contributions;
(9) reduce from five to two business
days the timeframe within which
Clearing Members are required to fund
Clearing Fund deficits due to monthly
or intra-month resizing or due to Rule
amendments;
18 17
1 12
Frm 00069
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4 In Amendment No. 1, OCC corrected formatting
errors in Exhibits 5A and 5B without changing the
substance of the advance notice.
E:\FR\FM\06JYN1.SGM
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]]>Agencies
[Federal Register Volume 83, Number 130 (Friday, July 6, 2018)]
[Notices]
[Pages 31592-31594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14467]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83567; File No. SR-CBOE-2018-047]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
to the Penny Pilot Program
June 29, 2018.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder, \2\ notice is hereby given
that on June 26, 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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend the operation of Penny Pilot
Program through December 31, 2018. The text of the proposed rule change
is provided below.
(additions are in italics; deletions are [bracketed])
* * * * *
Cboe Exchange, Inc.
Rules
* * * * *
Rule 6.42. Minimum Increments for Bids and Offers
The Board of Directors may establish minimum increments for options
traded on the Exchange. When the Board of Directors determines to
change the minimum increments, the Exchange will designate such change
as a stated policy, practice, or interpretation with respect to the
administration of Rule 6.42 within the meaning of subparagraph (3)(A)
of subsection 19(b) of the Exchange Act and will file a rule change for
effectiveness upon filing with the Commission. Until such time as the
Board of Directors makes a change to the minimum increments, the
following minimum increments shall apply to options traded on the
Exchange:
(1) (No change).
(2) (No change).
(3) The decimal increments for bids and offers for all series of
the option classes participating in the Penny Pilot Program are: $0.01
for all option series quoted below $3 (including LEAPS), and $0.05 for
all option series $3 and above (including LEAPS). For QQQQs, IWM, and
SPY, the minimum increment is $0.01 for all option series. The Exchange
may replace any option class participating in the Penny Pilot Program
that has been delisted with the next most actively-traded, multiply-
listed option class, based on national average daily volume in the
preceding six calendar months that is not yet included in the Pilot
Program. Any replacement class would be added on the second trading day
following [January 1, 2018] July 1, 2018. The Penny Pilot shall expire
on [June 30, 2018] December 31, 2018.
(4) (No change).
. . . Interpretations and Policies:
.01-.04 (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
[[Page 31593]]
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 Penny Pilot Program (the ``Pilot Program'') is scheduled to
expire on June 30, 2018. The Exchange proposes to extend the Pilot
Program until December 31, 2018. The Exchange believes that extending
the Pilot Program will allow for further analysis of the Pilot Program
and a determination of how the Pilot Program should be structured in
the future.
During this extension of the Pilot Program, the Exchange proposes
that it may replace any option class that is currently included in the
Pilot Program and that has been delisted with the next most actively
traded, multiply listed option class that is not yet participating in
the Pilot Program (``replacement class''). Any replacement class would
be determined based on national average daily volume in the preceding
six months,\5\ and would be added on the second trading day following
July 1, 2018. The Exchange will employ the same parameters to
prospective replacement classes as approved and applicable in
determining the existing classes in the Pilot Program, including
excluding high-priced underlying securities.\6\ The Exchange will
announce to its Trading Permit Holders by circular any replacement
classes in the Pilot Program.
---------------------------------------------------------------------------
\5\ The month immediately preceding a replacement class's
addition to the Pilot Program (i.e., June) would not be used for
purposes of the six-month analysis. Thus, a replacement class to be
added on the second trading day following July 1, 2018 would be
identified based on The Option Clearing Corporation's trading volume
data from December 1, 2017 through May 31, 2018.
\6\ See Securities Exchange Act Release No. 60864 (October 22,
2009), 74 FR 55876 (October 29, 2009) (SR-CBOE-2009-76).
---------------------------------------------------------------------------
The Exchange is specifically authorized to act jointly with the
other options exchanges participating in the Pilot Program in
identifying any replacement class. The Exchange lastly represents that
the Exchange has the necessary system capacity to continue to support
operation of the Penny Pilot.
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.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ 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 facilitation
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) \9\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. In particular, the proposed rule change allows for
an extension of the Pilot Program for the benefit of market
participants. The Exchange notes that this proposal does not propose
any new policies or provisions that are unique or unproven, but instead
relates to the continuation of an existing program that operates on a
pilot basis.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
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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. Specifically, the Exchange
believes that, by extending the expiration of the Pilot Program, the
proposed rule change will allow for further analysis of the Pilot
Program and a determination of how the Program shall be structured in
the future. In doing so, the proposed rule change will also serve to
promote regulatory clarity and consistency, thereby reducing burdens on
the marketplace and facilitating investor protection. In addition, the
Exchange has been authorized to act jointly in extending the Pilot
Program and believes the other exchanges will be filing similar
extensions.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6).
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Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii)
thereunder.
A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing.\13\ However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the
Commission may designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because doing so will allow the Pilot Program to continue without
interruption in a manner that is consistent with the Commission's prior
approval of the extension and expansion of the Pilot Program and will
allow the Exchange and the Commission additional time to analyze the
impact of
[[Page 31594]]
the Pilot Program.\15\ Accordingly, the Commission designates the
proposed rule change as operative upon filing with the Commission.\16\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 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 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 pre-filing requirement.
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ See Securities Exchange Act Release No. 61061 (November 24,
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
\16\ For purposes only of waiving the operative delay for this
proposal, the Commission has 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 such 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 under
Section 19(b)(2)(B) \17\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\17\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2018-047 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-2018-047 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-2018-047 and should be submitted on
or before July 27, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14467 Filed 7-5-18; 8:45 am]
BILLING CODE 8011-01-P
