Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 5.5A, Select Provisions of Options Listing Procedures Plan, 5.8, Long-Term Equity Option Series (LEAPS) and Rule 24.9, Terms of Index Option Contracts, 43946-43949 [2018-18574]
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43946
Federal Register / Vol. 83, No. 167 / Tuesday, August 28, 2018 / Notices
submissions should refer to File
Number SR–NYSENAT–2018–19 and
should be submitted on or before
September 18, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–18571 Filed 8–27–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83909; File No. SR–CBOE–
2018–061]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rule 5.5A,
Select Provisions of Options Listing
Procedures Plan, 5.8, Long-Term
Equity Option Series (LEAPS) and Rule
24.9, Terms of Index Option Contracts
August 22, 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 August
20, 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
Rules 5.5A, 5.8, and 24.9.
(additions are italicized; deletions are
[bracketed])
*
*
*
*
*
Rules of Cboe Exchange, Inc.
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*
*
*
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*
Rule 5.5A. Select Provisions of Options
Listing Procedures Plan
(a) No change.
16 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
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(b) The exercise price of each option
series listed by the Exchange shall be
fixed at a price per share which is
reasonably close to the price of the
underlying equity security, Exchange
Traded Fund (‘‘ETF’’ and referred to as
a ‘‘Unit’’ in Rule 5.3) or Trust Issued
Receipt (‘‘TIR’’) at or about the time the
Exchange determines to list such series.
Additionally,
(i) Exercise Price Range Limitations—
Except as provided in subparagraphs (ii)
through (iv) below, if the price of the
underlying security is less than or equal
to $20, the Exchange shall not list new
option series with an exercise price
more than 100% above or below the
price of the underlying security.
However, the foregoing restriction shall
not prohibit the listing of at least three
exercise prices per expiration month in
an option class. Except as provided in
Rule 5.5(d)(4), if the price of the
underlying security is greater than $20,
the Exchange shall not list new option
series with an exercise price more than
50% above or below the price of the
underlying security.
The price of the underlying security is
measured by:
(1) For intra-day add-on series and
next-day series additions, the daily high
and low of all prices reported by all
national securities exchanges;
(2) for new expiration months, the
daily high and low of all prices reported
by all national securities exchanges on
the day the Exchange determines its
preliminary notification of new series;
[and]
(3) for option series to be added as a
result of pre-market trading, the most
recent share price reported by all
national securities exchanges between
7:45 a.m. and 8:30 a.m. (Chicago
time)[.]; and
(4) for option series to be added based
on trading following regular trading
hours, the most recent share price
reported by all national securities
exchanges between 3:15 p.m. and 5:00
p.m. (Chicago time).
(ii)–(vi) No change.
*
*
*
*
*
Rule 5.8. Long-Term Equity Option
Series (LEAPS)
(a) No change.
(b) [When a new equity LEAPS series
is listed, such series will be opened for
trading either when there is buying or
selling interest, or 40 minutes prior to
the close, whichever occurs first. No
quotations will be posted for such
option series until they are opened for
trading.
(c)] With regard to the listing of new
January LEAPS series on equity option
classes, options on Exchange Traded
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
Funds (‘‘ETFs’’ and referred to as
‘‘Units’’ in Rule 5.3), or options on Trust
Issued Receipts (‘‘TIRs’’), the Exchange
shall not add new LEAP series on a
currently listed and traded option class
earlier than the Monday prior to the
September expiration (which is 28
months before the expiration)[:
(i) Earlier than September (which is
28 months before the expiration), for an
option class on the January expiration
cycle;
(ii) Earlier than October (which is 27
months before expiration), for an option
class on the February expiration cycle;
and
(iii) Earlier than November (which is
26 months before expiration), for an
option class on the March expiration
cycle].
Pursuant to the Options Listing
Procedures Plan, exchanges that list and
trade the same equity option class, ETF
option class, or TIR option class are
authorized to jointly determine and
coordinate with the Clearing
Corporation on the date of introduction
of new LEAP series for that option class
consistent with this paragraph ([c]b).
([d]c) The Exchange shall not list new
LEAP series on equity option classes,
options on ETFs, or options on TIRs in
a new expiration year if the national
average daily contract volume,
excluding LEAP and FLEX series, for
that option class during the preceding
three calendar months is less than 1,000
contracts, unless the new LEAP series
has an expiration year that has already
been listed on another exchange for that
option class. The preceding volume
threshold does not apply during the first
six months an equity option class,
option on an ETF, or option on a TIR
is listed on any exchange.
*
*
*
*
*
Rule 24.9. Terms of Index Option
Contracts
(a) No change.
(b) Long-Term Index Option Series
(‘‘LEAPS’’).
(1) Notwithstanding the provisions of
Paragraph (a)(2) above, the Exchange
may list long-term index option series
that expire from 12 to 180 months from
the date of issuance.
(A) Index LEAPS may be based on
either the full or reduced value of the
underlying index.
(B) There may be up to 10 expiration
months, none further out than onehundred eighty (180) months.
[(B) When a new Index LEAPS series
is listed, such series will be opened for
trading either when there is buying or
selling interest, or 40 minutes prior to
the close, whichever occurs first. No
quotations will be posted for such
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Federal Register / Vol. 83, No. 167 / Tuesday, August 28, 2018 / Notices
option series until they are opened for
trading.]
(2) No change.
(c)–(e) No change.
. . . Interpretations and Policies:
.01–.14 No change.
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/
AboutCBOE/CBOELegal
RegulatoryHome.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
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The purpose of this proposed rule
change is to amend Rules 5.5A, 5.8, and
24.9 to conform to recently approved
changes to the Options Listing
Procedures Plan (‘‘OLPP’’).5 The
Exchange, which is one of the
Participant Exchanges 6 to the OLPP,
currently has rules that are designed to
incorporate the requirements of the
OLPP. All Participant Exchanges have
similar such (essentially uniform) rules
to ensure consistency and compliance
with the OLPP. The Exchange proposes
to modify such rules to reflect the recent
updates as described below.
5 See Securities Exchange Act Release Nos. 82235
(December 7, 2017), 82 FR 58668 (December 13,
2017) (order approving the Fourth Amendment to
the OLPP); 81893 (October 18, 2017), 82 FR 49249
(‘‘OLPP Notice’’).
6 In addition to the Exchange, the ‘‘Participant
Exchanges’’ are: Box Options Exchange, LLC; Cboe
BZX Exchange, Inc.; Cboe C2 Exchange, Inc.; Cboe
EDGX Exchange, Inc.; Miami International
Securities Exchange, LLC; MIAX PEARL, LLC;
Nasdaq BX, Inc.; Nasdaq GEMX, LLC; Nasdaq ISE,
LLC; Nasdaq MRX, LLC; Nasdaq Options Market,
LLC; Nasdaq PHLX, LLC; NYSE American, LLC;
and NYSE Arca, Inc.
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20:00 Aug 27, 2018
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Addition of Long-Term Equity Options
(‘‘LEAPS’’)
First, the OLPP has been amended to
change the earliest date on which new
January LEAPS on equity options,
options on Exchange Traded Funds
(‘‘ETF’’), or options on Trust Issued
Receipts (‘‘TIR’’) may be added to a
single date (from three separate
months). As noted in the OLPP Notice,
in the past, there were operational
concerns related to adding new January
LEAPs series for all options classes on
which LEAPs were listed on a single
trading day.7 And, the addition of new
series in a pre-electronic trading
environment was a manual process. To
accommodate this, the addition of new
January LEAPs series was spread across
three months (September, October, and
November). Today, however, these
operational concerns related to January
LEAPs have been alleviated as new
series can be added in bulk
electronically. The Plan Participants,
including the Exchange, believe that
moving the addition of new January
LEAPs series to no earlier than the
Monday prior to the September
expiration would reduce marketplace
confusion about available January
LEAPs series. Where previously January
LEAPs series for options classes on the
February or March expiration cycles
would not have been available as early
as January LEAPs series for options
classes on the January expiration cycle,
under the proposed change, all January
LEAPs series will be available
concurrently. Accordingly, to conform
to this change, the Exchange proposes to
modify current Rule 5.8(c) to reflect that
new January LEAPS series on equity
options classes, options on ETFs, or
options on TIRs, may not be added on
a currently listed and traded option
class earlier than the Monday prior to
the September expiration (which is 28
months before the expiration).8
Addition of Equity, ETF, and TIR
Option Series After Regular Trading
Hours
Second, the OLPP has been amended
to allow equity, ETF, and TIR option
series to be added based on trading after
regular trading hours (i.e., after-market).
As noted in the OLPP Notice, the prior
version of the OLPP did not allow for
option series to be added based on
trading following regular trading hours.9
As such, the Exchange Participants were
are unable to add new option series that
may result from trading following
regular trading hours until the next
7 See
OLPP Notice at 49249.
proposed Rule 5.8(b).
9 See OLPP Notice at 49250.
8 See
PO 00000
Frm 00106
Fmt 4703
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43947
morning, depending on the range of
prices in pre-market trading, which is
significant because events that occur
after regular trading hours, such as
earnings releases, often have an
important impact on the price of an
underlying security. In addition, there
are operational difficulties for market
participants throughout the industry
adding series after system startup. To
avoid the potential burden that would
result from the inability to add series as
a result of trading following regular
trading hours, the OLPP was amended
to allow an additional category by
which the price of an underlying
security may be measured. Specifically,
to conform to the amended OLPP, the
Exchange proposes to add subparagraph
(b)(i)(4) to Rule 5.5A to provide that ‘‘for
option series to be added based on
trading following regular trading
hours,’’ the price of the underlying
security is measured by ‘‘the most
recent share price reported by all
national securities exchanges between
3:15 p.m. and 5:00 p.m. (Chicago
time).’’ 10
Technical Changes
The Exchange proposes to modify
Rules to delete now obsolete operational
language, which dates back to when
LEAPs were first adopted. This language
provides that when a new equity or
index LEAPS series, as applicable, is
listed, such series will be opened for
trading either when there is buying or
selling interest, or 40 minutes prior to
the close, whichever occurs first. No
quotations will be posted for such
option series until they are opened for
trading. The Exchange proposes to
delete this language because when this
language was adopted, LEAPs were not
opened for trading until late in the
trading day unless there was buying or
selling interest.11 Today, however,
technological improvements allow the
Exchange to open all LEAP series at the
same time as all other series in an
option class.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
10 See proposed Rule 5.5A(b)(i)(4). The Exchange
proposes to relocate ‘‘and’’ from subparagraph (2)
to (3) to conform to the change. See proposed Rule
5.5A(b)(i)(2) and (3).
11 See current Rules 5.8(b) and 24.9(b)(1)(B). The
proposed rule change amends a cross-reference to
current Rule 5.8(c) (proposed Rule 5.8(b)), and
changes current Rule 5.8(d) to proposed Rule 5.8(c),
to conform to the deletion of current Rule 5.8(b).
See proposed Rule 5.8(b) and (c). The proposed rule
change splits current Rule 24.9(b)(1)(A) into two
provisions (proposed Rule 24.9(b)(1)(A) and (B)) to
separate two different rule provisions. See proposed
Rule 24.9(b)(1).
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daltland on DSKBBV9HB2PROD with NOTICES
43948
Federal Register / Vol. 83, No. 167 / Tuesday, August 28, 2018 / Notices
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.12 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 13 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 14 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, which conforms to the recently
adopted provisions of the OLPP, as
amended, allows the Exchange to
continue to list extended far term option
series that have been viewed as
beneficial to traders, investors and
public customers. Accordingly, the
Exchange believes that the proposal is
consistent with the Act because it will
allow the Exchange to list all January
2021 expiration series on the Monday
prior to the September 2018 expiration.
Moreover, this change would simplify
the process for adding new January
LEAP options series and reduce
potential for investor confusion because
all new January LEAP options would be
made available beginning at the same
time, consistent with the amended
OLPP. The Exchange notes that this
proposal does not propose any new
provisions that have not already been
approved by the Commission in the
amended OLPP, but instead maintains
series listing rules that conform to the
amended OLPP.
The proposal to permit series to be
added based on after-market trading is
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
and to remove impediments to and
perfect the mechanisms of a free and
open market and a national market
system, by allowing the Exchange to
make series available for trading with
12 15
13 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Cboe Options 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
conforming Exchange rules to the
amended OLPP, the Exchange would
promote regulatory clarity and
consistency, thereby reducing burdens
on the marketplace and facilitating
investor protection. The Exchange
believes that adopting rules, which it
anticipates will likewise be adopted by
Participant Exchanges, would allow for
continued competition between
Exchange market participants trading
similar products as their counterparts
on other exchanges, while at the same
time allowing the Exchange to continue
to compete for order flow with other
exchanges in option 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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 15 and Rule
19b–4(f)(6) thereunder.16 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
15 15
14 Id.
VerDate Sep<11>2014
reduced operational difficulties. The
Exchange notes that this proposed
change, which is consistent with the
amended OLPP should provide market
participants with earlier notice
regarding what options series will be
available for trading the following day,
and should help to enhance investors’
ability to plan their options trading. The
Exchange also believes that the
proposed technical changes, including
deleting obsolete language and
reorganizing and consolidating the rule,
promote just and equitable principles of
trade, foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and remove impediments to and perfect
the mechanism of a free and open
market and a national market system.
16 17
20:00 Aug 27, 2018
Jkt 244001
PO 00000
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
Frm 00107
Fmt 4703
Sfmt 4703
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.17
A proposed rule change filed under
Rule 19b–4(f)(6) 18 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),19 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 notes that the Exchange’s
proposal would conform the Exchange’s
rules to the amended OLPP, which the
Commission previously approved.20
Accordingly, the Commission believes
that the proposal raises no new or novel
regulatory issues and waiver of the 30day operative delay is consistent with
the protection of investors and the
public interest. The Commission
therefore waives the 30-day operative
delay and designates the proposed rule
change to be operative upon filing.21
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) 22 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
17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
18 17 CFR 240.19b–4(f)(6).
19 17 CFR 240.19b–4(f)(6)(iii).
20 See OLPP Notice, supra note 5.
21 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).
22 15 U.S.C. 78s(b)(2)(B).
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Federal Register / Vol. 83, No. 167 / Tuesday, August 28, 2018 / Notices
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:
[FR Doc. 2018–18574 Filed 8–27–18; 8:45 am]
Electronic Comments
BILLING CODE 8011–01–P
• 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–2018–061 on the subject line.
Paper Comments
daltland on DSKBBV9HB2PROD with NOTICES
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Assistant Secretary.
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
43949
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #15664 and #15665;
Wisconsin Disaster Number WI–00065]
Presidential Declaration of a Major
Disaster for Public Assistance Only for
the State of Wisconsin
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Wisconsin (FEMA–4383–
DR), dated 08/10/2018.
Incident: Severe Storms, Straight-line
Winds, and Flooding.
Incident Period: 06/15/2018 through
06/19/2018.
DATES: Issued on 08/10/2018.
Physical Loan Application Deadline
Date: 10/09/2018.
Economic Injury (EIDL) Loan
Application Deadline Date: 05/10/2019.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
08/10/2018, Private Non-Profit
organizations that provide essential
services of a governmental nature may
file disaster loan applications at the
address listed above or other locally
announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Ashland, Bayfield,
Burnett, Clark, Douglas, Iron.
The Interest Rates are:
SUMMARY:
2:30 p.m. on Thursday,
August 30, 2018.
TIME AND DATE:
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
PLACE:
All submissions should refer to File
Number SR–CBOE–2018–061. 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–SR–CBOE–2018–061 and
should be submitted on or before
September 18, 2018.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
Commissioner Jackson, as duty
officer, voted to consider the items
listed for the closed meeting in closed
session.
The subject matters of the closed
meeting will be:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
Closed Commission Hearing
Room 10800.
This meeting will be closed to
the public.
STATUS:
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed; please contact
Brent J. Fields from the Office of the
Secretary at (202) 551–5400.
Dated: August 23, 2018.
Brent J. Fields,
Secretary.
Percent
For Physical Damage:
Non-Profit Organizations with
Credit Available Elsewhere ...
Non-Profit Organizations without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit
Organizations
without Credit Available
Elsewhere ..........................
2.500
2.500
2.500
[FR Doc. 2018–18679 Filed 8–24–18; 11:15 am]
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20:00 Aug 27, 2018
Jkt 244001
PO 00000
CFR 200.30–3(a)(12).
Frm 00108
Fmt 4703
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The number assigned to this disaster
for physical damage is 156646 and for
economic injury is 156650.
E:\FR\FM\28AUN1.SGM
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]]>Agencies
[Federal Register Volume 83, Number 167 (Tuesday, August 28, 2018)]
[Notices]
[Pages 43946-43949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18574]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83909; File No. SR-CBOE-2018-061]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 5.5A, Select Provisions of Options Listing Procedures Plan, 5.8,
Long-Term Equity Option Series (LEAPS) and Rule 24.9, Terms of Index
Option Contracts
August 22, 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 August 20, 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).
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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 Rules 5.5A, 5.8, and 24.9.
(additions are italicized; deletions are [bracketed])
* * * * *
Rules of Cboe Exchange, Inc.
* * * * *
Rule 5.5A. Select Provisions of Options Listing Procedures Plan
(a) No change.
(b) The exercise price of each option series listed by the Exchange
shall be fixed at a price per share which is reasonably close to the
price of the underlying equity security, Exchange Traded Fund (``ETF''
and referred to as a ``Unit'' in Rule 5.3) or Trust Issued Receipt
(``TIR'') at or about the time the Exchange determines to list such
series. Additionally,
(i) Exercise Price Range Limitations--Except as provided in
subparagraphs (ii) through (iv) below, if the price of the underlying
security is less than or equal to $20, the Exchange shall not list new
option series with an exercise price more than 100% above or below the
price of the underlying security. However, the foregoing restriction
shall not prohibit the listing of at least three exercise prices per
expiration month in an option class. Except as provided in Rule
5.5(d)(4), if the price of the underlying security is greater than $20,
the Exchange shall not list new option series with an exercise price
more than 50% above or below the price of the underlying security.
The price of the underlying security is measured by:
(1) For intra-day add-on series and next-day series additions, the
daily high and low of all prices reported by all national securities
exchanges;
(2) for new expiration months, the daily high and low of all prices
reported by all national securities exchanges on the day the Exchange
determines its preliminary notification of new series; [and]
(3) for option series to be added as a result of pre-market
trading, the most recent share price reported by all national
securities exchanges between 7:45 a.m. and 8:30 a.m. (Chicago time)[.];
and
(4) for option series to be added based on trading following
regular trading hours, the most recent share price reported by all
national securities exchanges between 3:15 p.m. and 5:00 p.m. (Chicago
time).
(ii)-(vi) No change.
* * * * *
Rule 5.8. Long-Term Equity Option Series (LEAPS)
(a) No change.
(b) [When a new equity LEAPS series is listed, such series will be
opened for trading either when there is buying or selling interest, or
40 minutes prior to the close, whichever occurs first. No quotations
will be posted for such option series until they are opened for
trading.
(c)] With regard to the listing of new January LEAPS series on
equity option classes, options on Exchange Traded Funds (``ETFs'' and
referred to as ``Units'' in Rule 5.3), or options on Trust Issued
Receipts (``TIRs''), the Exchange shall not add new LEAP series on a
currently listed and traded option class earlier than the Monday prior
to the September expiration (which is 28 months before the
expiration)[:
(i) Earlier than September (which is 28 months before the
expiration), for an option class on the January expiration cycle;
(ii) Earlier than October (which is 27 months before expiration),
for an option class on the February expiration cycle; and
(iii) Earlier than November (which is 26 months before expiration),
for an option class on the March expiration cycle].
Pursuant to the Options Listing Procedures Plan, exchanges that
list and trade the same equity option class, ETF option class, or TIR
option class are authorized to jointly determine and coordinate with
the Clearing Corporation on the date of introduction of new LEAP series
for that option class consistent with this paragraph ([c]b).
([d]c) The Exchange shall not list new LEAP series on equity option
classes, options on ETFs, or options on TIRs in a new expiration year
if the national average daily contract volume, excluding LEAP and FLEX
series, for that option class during the preceding three calendar
months is less than 1,000 contracts, unless the new LEAP series has an
expiration year that has already been listed on another exchange for
that option class. The preceding volume threshold does not apply during
the first six months an equity option class, option on an ETF, or
option on a TIR is listed on any exchange.
* * * * *
Rule 24.9. Terms of Index Option Contracts
(a) No change.
(b) Long-Term Index Option Series (``LEAPS'').
(1) Notwithstanding the provisions of Paragraph (a)(2) above, the
Exchange may list long-term index option series that expire from 12 to
180 months from the date of issuance.
(A) Index LEAPS may be based on either the full or reduced value of
the underlying index.
(B) There may be up to 10 expiration months, none further out than
one-hundred eighty (180) months.
[(B) When a new Index LEAPS series is listed, such series will be
opened for trading either when there is buying or selling interest, or
40 minutes prior to the close, whichever occurs first. No quotations
will be posted for such
[[Page 43947]]
option series until they are opened for trading.]
(2) No change.
(c)-(e) No change.
. . . Interpretations and Policies:
.01-.14 No change.
* * * * *
The text of the proposed rule change is also available on the
Exchange's website (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this proposed rule change is to amend Rules 5.5A,
5.8, and 24.9 to conform to recently approved changes to the Options
Listing Procedures Plan (``OLPP'').\5\ The Exchange, which is one of
the Participant Exchanges \6\ to the OLPP, currently has rules that are
designed to incorporate the requirements of the OLPP. All Participant
Exchanges have similar such (essentially uniform) rules to ensure
consistency and compliance with the OLPP. The Exchange proposes to
modify such rules to reflect the recent updates as described below.
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\5\ See Securities Exchange Act Release Nos. 82235 (December 7,
2017), 82 FR 58668 (December 13, 2017) (order approving the Fourth
Amendment to the OLPP); 81893 (October 18, 2017), 82 FR 49249
(``OLPP Notice'').
\6\ In addition to the Exchange, the ``Participant Exchanges''
are: Box Options Exchange, LLC; Cboe BZX Exchange, Inc.; Cboe C2
Exchange, Inc.; Cboe EDGX Exchange, Inc.; Miami International
Securities Exchange, LLC; MIAX PEARL, LLC; Nasdaq BX, Inc.; Nasdaq
GEMX, LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC; Nasdaq Options Market,
LLC; Nasdaq PHLX, LLC; NYSE American, LLC; and NYSE Arca, Inc.
---------------------------------------------------------------------------
Addition of Long-Term Equity Options (``LEAPS'')
First, the OLPP has been amended to change the earliest date on
which new January LEAPS on equity options, options on Exchange Traded
Funds (``ETF''), or options on Trust Issued Receipts (``TIR'') may be
added to a single date (from three separate months). As noted in the
OLPP Notice, in the past, there were operational concerns related to
adding new January LEAPs series for all options classes on which LEAPs
were listed on a single trading day.\7\ And, the addition of new series
in a pre-electronic trading environment was a manual process. To
accommodate this, the addition of new January LEAPs series was spread
across three months (September, October, and November). Today, however,
these operational concerns related to January LEAPs have been
alleviated as new series can be added in bulk electronically. The Plan
Participants, including the Exchange, believe that moving the addition
of new January LEAPs series to no earlier than the Monday prior to the
September expiration would reduce marketplace confusion about available
January LEAPs series. Where previously January LEAPs series for options
classes on the February or March expiration cycles would not have been
available as early as January LEAPs series for options classes on the
January expiration cycle, under the proposed change, all January LEAPs
series will be available concurrently. Accordingly, to conform to this
change, the Exchange proposes to modify current Rule 5.8(c) to reflect
that new January LEAPS series on equity options classes, options on
ETFs, or options on TIRs, may not be added on a currently listed and
traded option class earlier than the Monday prior to the September
expiration (which is 28 months before the expiration).\8\
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\7\ See OLPP Notice at 49249.
\8\ See proposed Rule 5.8(b).
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Addition of Equity, ETF, and TIR Option Series After Regular Trading
Hours
Second, the OLPP has been amended to allow equity, ETF, and TIR
option series to be added based on trading after regular trading hours
(i.e., after-market). As noted in the OLPP Notice, the prior version of
the OLPP did not allow for option series to be added based on trading
following regular trading hours.\9\ As such, the Exchange Participants
were are unable to add new option series that may result from trading
following regular trading hours until the next morning, depending on
the range of prices in pre-market trading, which is significant because
events that occur after regular trading hours, such as earnings
releases, often have an important impact on the price of an underlying
security. In addition, there are operational difficulties for market
participants throughout the industry adding series after system
startup. To avoid the potential burden that would result from the
inability to add series as a result of trading following regular
trading hours, the OLPP was amended to allow an additional category by
which the price of an underlying security may be measured.
Specifically, to conform to the amended OLPP, the Exchange proposes to
add subparagraph (b)(i)(4) to Rule 5.5A to provide that ``for option
series to be added based on trading following regular trading hours,''
the price of the underlying security is measured by ``the most recent
share price reported by all national securities exchanges between 3:15
p.m. and 5:00 p.m. (Chicago time).'' \10\
---------------------------------------------------------------------------
\9\ See OLPP Notice at 49250.
\10\ See proposed Rule 5.5A(b)(i)(4). The Exchange proposes to
relocate ``and'' from subparagraph (2) to (3) to conform to the
change. See proposed Rule 5.5A(b)(i)(2) and (3).
---------------------------------------------------------------------------
Technical Changes
The Exchange proposes to modify Rules to delete now obsolete
operational language, which dates back to when LEAPs were first
adopted. This language provides that when a new equity or index LEAPS
series, as applicable, is listed, such series will be opened for
trading either when there is buying or selling interest, or 40 minutes
prior to the close, whichever occurs first. No quotations will be
posted for such option series until they are opened for trading. The
Exchange proposes to delete this language because when this language
was adopted, LEAPs were not opened for trading until late in the
trading day unless there was buying or selling interest.\11\ Today,
however, technological improvements allow the Exchange to open all LEAP
series at the same time as all other series in an option class.
---------------------------------------------------------------------------
\11\ See current Rules 5.8(b) and 24.9(b)(1)(B). The proposed
rule change amends a cross-reference to current Rule 5.8(c)
(proposed Rule 5.8(b)), and changes current Rule 5.8(d) to proposed
Rule 5.8(c), to conform to the deletion of current Rule 5.8(b). See
proposed Rule 5.8(b) and (c). The proposed rule change splits
current Rule 24.9(b)(1)(A) into two provisions (proposed Rule
24.9(b)(1)(A) and (B)) to separate two different rule provisions.
See proposed Rule 24.9(b)(1).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the
[[Page 43948]]
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.\12\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \13\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \14\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ Id.
---------------------------------------------------------------------------
In particular, the proposed rule change, which conforms to the
recently adopted provisions of the OLPP, as amended, allows the
Exchange to continue to list extended far term option series that have
been viewed as beneficial to traders, investors and public customers.
Accordingly, the Exchange believes that the proposal is consistent with
the Act because it will allow the Exchange to list all January 2021
expiration series on the Monday prior to the September 2018 expiration.
Moreover, this change would simplify the process for adding new January
LEAP options series and reduce potential for investor confusion because
all new January LEAP options would be made available beginning at the
same time, consistent with the amended OLPP. The Exchange notes that
this proposal does not propose any new provisions that have not already
been approved by the Commission in the amended OLPP, but instead
maintains series listing rules that conform to the amended OLPP.
The proposal to permit series to be added based on after-market
trading is designed to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
facilitating transactions in securities, and to remove impediments to
and perfect the mechanisms of a free and open market and a national
market system, by allowing the Exchange to make series available for
trading with reduced operational difficulties. The Exchange notes that
this proposed change, which is consistent with the amended OLPP should
provide market participants with earlier notice regarding what options
series will be available for trading the following day, and should help
to enhance investors' ability to plan their options trading. The
Exchange also believes that the proposed technical changes, including
deleting obsolete language and reorganizing and consolidating the rule,
promote just and equitable principles of trade, foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and remove impediments to and perfect the mechanism of a
free and open market and a national market system.
B. Self-Regulatory Organization's Statement on Burden on Competition
Cboe Options 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 conforming Exchange rules to the amended OLPP, the
Exchange would promote regulatory clarity and consistency, thereby
reducing burdens on the marketplace and facilitating investor
protection. The Exchange believes that adopting rules, which it
anticipates will likewise be adopted by Participant Exchanges, would
allow for continued competition between Exchange market participants
trading similar products as their counterparts on other exchanges,
while at the same time allowing the Exchange to continue to compete for
order flow with other exchanges in option 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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \15\ and Rule 19b-4(f)(6) thereunder.\16\
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.\17\
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\15\ 15 U.S.C. 78s(b)(3)(A)(iii).
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \18\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\19\ 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 notes that
the Exchange's proposal would conform the Exchange's rules to the
amended OLPP, which the Commission previously approved.\20\
Accordingly, the Commission believes that the proposal raises no new or
novel regulatory issues and waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest.
The Commission therefore waives the 30-day operative delay and
designates the proposed rule change to be operative upon filing.\21\
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\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6)(iii).
\20\ See OLPP Notice, supra note 5.
\21\ 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 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) \22\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\22\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
[[Page 43949]]
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-2018-061 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-2018-061. 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-SR-CBOE-2018-061 and should be submitted
on or before September 18, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-18574 Filed 8-27-18; 8:45 am]
BILLING CODE 8011-01-P
