Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Renew the Nonstandard Expirations Pilot Program, 56119-56121 [2018-24522]
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Federal Register / Vol. 83, No. 218 / Friday, November 9, 2018 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84534; File No. SR–CBOE–
2018–070]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Renew the
Nonstandard Expirations Pilot
Program
November 5, 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 November
2, 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
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to renew
an existing pilot program until May 6,
2019. Under the existing pilot program,
the Exchange is permitted to list P.M.settled options on broad-based indexes
that expire on: (a) Any Monday,
Wednesday, or Friday (‘‘Weekly
Expirations’’) and (b) the last trading
day of the month (‘‘End of Month
Expirations’’ or ‘‘EOMs’’).
(additions are italicized; deletions are
[bracketed])
*
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Cboe Exchange, Inc. Rules [sic]
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Rule 24.9. Terms of Index Option
Contracts
(a)–(d) (No change).
(e) Nonstandard Expirations Pilot
Program
(1)–(2) (No change).
(3) Duration of Nonstandard
Expirations Pilot Program. The
Nonstandard Expirations Pilot Program
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
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shall be through [November 5, 2018]
May 6, 2019.
(4) (No change).
. . . Interpretations and Policies:
.01–.14 (No change).
*
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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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On September 14, 2010, the
Commission approved a Cboe Options
proposal to establish a pilot program
under which the Exchange is permitted
to list P.M.-settled options on broadbased indexes to expire on (a) any
Friday of the month, other than the
third Friday-of-the-month, and (b) the
last trading day of the month.5 On
January 14, 2016, the Commission
approved a Cboe Options proposal to
expand the pilot program to allow P.M.settled options on broad-based indexes
to expire on any Wednesday of month,
other than those that coincide with an
EOM.6 On August 10, 2016, the
Commission approved a Cboe Options
proposal to expand the pilot program to
allow P.M.-settled options on broadbased indexes to expire on any Monday
of month, other than those that coincide
with an EOM.7 Under the terms of the
Nonstandard Expirations Pilot Program
5 See Securities Exchange Act Release 62911
(September 14, 2010), 75 FR 57539 (September 21,
2010) (order approving SR–CBOE–2009–075).
6 See Securities Exchange Act Release 76909
(January 14, 2016), 81 FR 3512 (January 21, 2016)
(order approving SR–CBOE–2015–106).
7 See Securities Exchange Act Release 78531
(August 10, 2016), 81 FR 54643 (August 16, 2016)
(order approving SR–CBOE–2016–046).
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56119
(‘‘Program’’), Weekly Expirations and
EOMs are permitted on any broad-based
index that is eligible for regular options
trading. Weekly Expirations and EOMs
are cash-settled and have Europeanstyle exercise. The proposal became
effective on a pilot basis for a period of
fourteen months that commenced on the
next full month after approval was
received to establish the Program 8 and
was subsequently extended.9 The
Program is scheduled to expire on
November 5, 2018. The Exchange
believes that the Program has been
successful and well received by its
Trading Permit Holders and the
investing public during that the time
that it has been in operation. The
Exchange hereby proposes to extend the
Program until May 6, 2019. This
proposal does not request any other
changes to the Program.
Pursuant to the order approving the
establishment of the Program, two
months prior to the conclusion of the
pilot period, Cboe Options is required to
submit an annual report to the
Commission, which addresses the
following areas: Analysis of Volume &
Open Interest, Monthly Analysis of
Weekly Expirations & EOM Trading
Patterns and Provisional Analysis of
Index Price Volatility. The Exchange has
submitted, under separate cover, the
annual report in connection with the
present proposed rule change.
Additionally, the Exchange will provide
the Commission with any additional
data or analyses the Commission
requests because it deems such data or
analyses necessary to determine
whether the Program is consistent with
the Exchange Act. The Exchange is in
the process of making public on its
website data and analyses previously
submitted to the Commission under the
Program, which it expects to complete
in the fourth quarter of 2018, and will
make public any data and analyses it
submits to the Commission under the
Program in the future.
8 Id.
9 See Securities Exchange Act Release 65741
(November 14, 2011), 76 FR 72016 (November 21,
2011) (immediately effective rule change extending
the Program through February 14, 2013). See also
Securities Exchange Act Release 68933 (February
14, 2013), 78 FR 12374 (February 22, 2013)
(immediately effective rule change extending the
Program through April 14, 2014); 71836 (April 1,
2014), 79 FR 19139 (April 7, 2014) (immediately
effective rule change extending the Program
through November 3, 2014); 73422 (October 24,
2014), 79 FR 64640 (October 30, 2014) (immediately
effective rule change extending the Program
through May 3, 2016); 76909 (January 14, 2016), 81
FR 3512 (January 21, 2016) (extending the Program
through May 3, 2017); 80387 (April 6, 2017), 82 FR
17706 (April 12, 2017) (extending the Program
through May 3, 2018); and 83165 (May 3, 2018), 83
FR 21316 (May 9, 2018) (SR–CBOE–2018–038)
(extending the Program through November 8, 2018).
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Federal Register / Vol. 83, No. 218 / Friday, November 9, 2018 / Notices
If, in the future, the Exchange
proposes an additional extension of the
Program, or should the Exchange
propose to make the Program permanent
(which the Exchange currently intends
to do), the Exchange will submit an
annual report (addressing the same
areas referenced above and consistent
with the order approving the
establishment of the Program) to the
Commission at least two months prior to
the expiration date of the Program. Any
positions established under the Program
will not be impacted by the expiration
of the Program.
The Exchange believes there is
sufficient investor interest and demand
in the Program to warrant its extension.
The Exchange believes that the Program
has provided investors with additional
means of managing their risk exposures
and carrying out their investment
objectives. Furthermore, the Exchange
has not experienced any adverse market
effects with respect to the Program.
The Exchange believes that the
proposed extension of the Program will
not have an adverse impact on capacity.
for the benefit of market participants.
Additionally, the Exchange believes that
there is demand for the expirations
offered under the Program and believes
that that Weekly Expirations and EOMs
will continue to provide the investing
public and other market participants
increased opportunities to better
manage their risk exposure.
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.10 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 11 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) 12 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange believes
that the Program has been successful to
date and states that it has not
encountered any problems with the
Program. The proposed rule change
allows for an extension of the Program
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
10 15
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12 Id.
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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 extending
the expiration of the Program, the
proposed rule change will allow for
further analysis of the 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.
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 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 13 and Rule 19b–4(f)(6)
thereunder.14
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
13 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
15 17 CFR 240.19b–4(f)(6).
14 17
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Rule 19b–4(f)(6)(iii),16 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 Exchange
states that such waiver will allow the
Exchange to extend the pilot program
prior to its expiration on November 5,
2018, and maintain the status quo,
thereby reducing market disruption. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest as it will allow the pilot
program to continue uninterrupted,
thereby avoiding investor confusion that
could result from a temporary
interruption in the pilot program. For
this reason, the Commission designates
the proposed rule change to be operative
upon filing.17
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
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 rule-comments@
sec.gov. Please include File Number SR–
CBOE–2018–070 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–2018–070. This file
number should be included on the
16 17
CFR 240.19b–4(f)(6)(iii).
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).
17 For
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Federal Register / Vol. 83, No. 218 / Friday, November 9, 2018 / Notices
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
a.m. and 3 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–
2018–070, and should be submitted on
or before November 30, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–24522 Filed 11–8–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
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
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Extension:
Rule 204, SEC File No. 270–586, OMB
Control No. 3235–0647
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
18 17
CFR 200.30–3(a)(12).
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(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 204 (17 CFR 242.204), under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.).
Rule 204(a) provides that a participant
of a registered clearing agency must
deliver securities to a registered clearing
agency for clearance and settlement on
a long or short sale in any equity
security by settlement date, or if a
participant of a registered clearing
agency has a fail to deliver position at
a registered clearing agency in any
equity security for a long or short sale
transaction in the equity security, the
participant shall, by no later than the
beginning of regular trading hours on
the applicable close-out date,
immediately close out its fail to deliver
positions by borrowing or purchasing
securities of like kind and quantity. For
a short sale transaction, the participant
must close out a fail to deliver by no
later than the beginning of regular
trading hours on the settlement day
following the settlement date. If a
participant has a fail to deliver that the
participant can demonstrate on its books
and records resulted from a long sale, or
that is attributable to bona-fide market
making activities, the participant must
close out the fail to deliver by no later
than the beginning of regular trading
hours on the third consecutive
settlement day following the settlement
date. Rule 204 is intended to help
further the Commission’s goal of
reducing fails to deliver by maintaining
the reductions in fails to deliver
achieved by the adoption of temporary
Rule 204T, as well as other actions
taken by the Commission. In addition,
Rule 204 is intended to help further the
Commission’s goal of addressing
potentially abusive ‘‘naked’’ short
selling in all equity securities.
The information collected under Rule
204 will continue to be retained and/or
provided to other entities pursuant to
the specific rule provisions and will be
available to the Commission and selfregulatory organization (‘‘SRO’’)
examiners upon request. The
information collected will continue to
aid the Commission and SROs in
monitoring compliance with these
requirements. In addition, the
information collected will aid those
subject to Rule 204 in complying with
its requirements. These collections of
information are mandatory.
Several provisions under Rule 204
will impose a ‘‘collection of
information’’ within the meaning of the
Paperwork Reduction Act.
I. Allocation Notification
Requirement: As of December 31, 2017,
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56121
there were 3,893 registered brokerdealers. Each of these broker-dealers
could clear trades through a participant
of a registered clearing agency and,
therefore, become subject to the
notification requirements of Rule
204(d). If a participant allocates a fail to
deliver position to a broker or dealer
pursuant to Rule 204(d), the broker or
dealer that has been allocated the fail to
deliver position in an equity security
must determine whether or not such fail
to deliver position was closed out in
accordance with Rule 204(a). If such
broker or dealer does not comply with
the provisions of Rule 204(a), such
broker or dealer must immediately
notify the participant that it has become
subject to the requirements of Rule
204(b). We estimate that a broker or
dealer could have to make such
determination and notification with
respect to approximately 1.76 equity
securities per day.1 We estimate a total
of 1,719,772 potential notifications in
accordance with Rule 204(d) across all
registered broker-dealers (that could be
allocated responsibility to close out a
fail to deliver position) per year (3,893
registered broker-dealers notifying
participants once per day 2 on 1.76
equity securities, multiplied by 251
trading days in 2017). The total
estimated annual burden hours per year
will be approximately 275,164 burden
hours (1,719,772 multiplied by 0.16
hours/notification).
II. Demonstration Requirement for
Fails to Deliver on Long Sales: As of
December 5, 2017, there were 132
participants of NSCC that were
registered as broker-dealers. If a
participant of a registered clearing
agency has a fail to deliver position in
an equity security at a registered
clearing agency and determined that
such fail to deliver position resulted
from a long sale, we estimate that a
participant of a registered clearing
agency will have to make such
determination with respect to
approximately 33 securities per day.3
1 The Commission’s Division of Economic and
Risk Analysis (‘‘DERA’’) estimates that there were
approximately 6,868 average daily fail to deliver
positions during 2017. Across 3,893 registered
broker-dealers, the number of securities per
registered broker-dealer per trading day is
approximately 1.76 equity securities.
2 Because failure to comply with the close-out
requirements of Rule 204(a) is a violation of the
rule, we believe that a broker or dealer would make
the notification to a participant that it is subject to
the borrowing requirements of Rule 204(b) at most
once per day.
3 DERA estimates that during 2017 approximately
62.93% of trade volume was long. DERA estimates
that there were approximately 6,868 average daily
fail to deliver positions during 2017. Across 132
broker-dealer participants of the NSCC, the number
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[Federal Register Volume 83, Number 218 (Friday, November 9, 2018)]
[Notices]
[Pages 56119-56121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24522]
[[Page 56119]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84534; File No. SR-CBOE-2018-070]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Renew
the Nonstandard Expirations Pilot Program
November 5, 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 November 2, 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
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to renew an existing pilot program until May 6, 2019. Under the
existing pilot program, the Exchange is permitted to list P.M.-settled
options on broad-based indexes that expire on: (a) Any Monday,
Wednesday, or Friday (``Weekly Expirations'') and (b) the last trading
day of the month (``End of Month Expirations'' or ``EOMs'').
(additions are italicized; deletions are [bracketed])
* * * * *
Cboe Exchange, Inc. Rules [sic]
* * * * *
Rule 24.9. Terms of Index Option Contracts
(a)-(d) (No change).
(e) Nonstandard Expirations Pilot Program
(1)-(2) (No change).
(3) Duration of Nonstandard Expirations Pilot Program. The
Nonstandard Expirations Pilot Program shall be through [November 5,
2018] May 6, 2019.
(4) (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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
On September 14, 2010, the Commission approved a Cboe Options
proposal to establish a pilot program under which the Exchange is
permitted to list P.M.-settled options on broad-based indexes to expire
on (a) any Friday of the month, other than the third Friday-of-the-
month, and (b) the last trading day of the month.\5\ On January 14,
2016, the Commission approved a Cboe Options proposal to expand the
pilot program to allow P.M.-settled options on broad-based indexes to
expire on any Wednesday of month, other than those that coincide with
an EOM.\6\ On August 10, 2016, the Commission approved a Cboe Options
proposal to expand the pilot program to allow P.M.-settled options on
broad-based indexes to expire on any Monday of month, other than those
that coincide with an EOM.\7\ Under the terms of the Nonstandard
Expirations Pilot Program (``Program''), Weekly Expirations and EOMs
are permitted on any broad-based index that is eligible for regular
options trading. Weekly Expirations and EOMs are cash-settled and have
European-style exercise. The proposal became effective on a pilot basis
for a period of fourteen months that commenced on the next full month
after approval was received to establish the Program \8\ and was
subsequently extended.\9\ The Program is scheduled to expire on
November 5, 2018. The Exchange believes that the Program has been
successful and well received by its Trading Permit Holders and the
investing public during that the time that it has been in operation.
The Exchange hereby proposes to extend the Program until May 6, 2019.
This proposal does not request any other changes to the Program.
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\5\ See Securities Exchange Act Release 62911 (September 14,
2010), 75 FR 57539 (September 21, 2010) (order approving SR-CBOE-
2009-075).
\6\ See Securities Exchange Act Release 76909 (January 14,
2016), 81 FR 3512 (January 21, 2016) (order approving SR-CBOE-2015-
106).
\7\ See Securities Exchange Act Release 78531 (August 10, 2016),
81 FR 54643 (August 16, 2016) (order approving SR-CBOE-2016-046).
\8\ Id.
\9\ See Securities Exchange Act Release 65741 (November 14,
2011), 76 FR 72016 (November 21, 2011) (immediately effective rule
change extending the Program through February 14, 2013). See also
Securities Exchange Act Release 68933 (February 14, 2013), 78 FR
12374 (February 22, 2013) (immediately effective rule change
extending the Program through April 14, 2014); 71836 (April 1,
2014), 79 FR 19139 (April 7, 2014) (immediately effective rule
change extending the Program through November 3, 2014); 73422
(October 24, 2014), 79 FR 64640 (October 30, 2014) (immediately
effective rule change extending the Program through May 3, 2016);
76909 (January 14, 2016), 81 FR 3512 (January 21, 2016) (extending
the Program through May 3, 2017); 80387 (April 6, 2017), 82 FR 17706
(April 12, 2017) (extending the Program through May 3, 2018); and
83165 (May 3, 2018), 83 FR 21316 (May 9, 2018) (SR-CBOE-2018-038)
(extending the Program through November 8, 2018).
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Pursuant to the order approving the establishment of the Program,
two months prior to the conclusion of the pilot period, Cboe Options is
required to submit an annual report to the Commission, which addresses
the following areas: Analysis of Volume & Open Interest, Monthly
Analysis of Weekly Expirations & EOM Trading Patterns and Provisional
Analysis of Index Price Volatility. The Exchange has submitted, under
separate cover, the annual report in connection with the present
proposed rule change. Additionally, the Exchange will provide the
Commission with any additional data or analyses the Commission requests
because it deems such data or analyses necessary to determine whether
the Program is consistent with the Exchange Act. The Exchange is in the
process of making public on its website data and analyses previously
submitted to the Commission under the Program, which it expects to
complete in the fourth quarter of 2018, and will make public any data
and analyses it submits to the Commission under the Program in the
future.
[[Page 56120]]
If, in the future, the Exchange proposes an additional extension of
the Program, or should the Exchange propose to make the Program
permanent (which the Exchange currently intends to do), the Exchange
will submit an annual report (addressing the same areas referenced
above and consistent with the order approving the establishment of the
Program) to the Commission at least two months prior to the expiration
date of the Program. Any positions established under the Program will
not be impacted by the expiration of the Program.
The Exchange believes there is sufficient investor interest and
demand in the Program to warrant its extension. The Exchange believes
that the Program has provided investors with additional means of
managing their risk exposures and carrying out their investment
objectives. Furthermore, the Exchange has not experienced any adverse
market effects with respect to the Program.
The Exchange believes that the proposed extension of the Program
will not have an adverse impact on capacity.
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.\10\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \11\ 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) \12\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
\12\ Id.
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In particular, the Exchange believes that the Program has been
successful to date and states that it has not encountered any problems
with the Program. The proposed rule change allows for an extension of
the Program for the benefit of market participants. Additionally, the
Exchange believes that there is demand for the expirations offered
under the Program and believes that that Weekly Expirations and EOMs
will continue to provide the investing public and other market
participants increased opportunities to better manage their risk
exposure.
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 extending the expiration of the Program, the proposed
rule change will allow for further analysis of the 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.
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 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 \13\ and Rule 19b-4(f)(6)
thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\16\ 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 Exchange states that
such waiver will allow the Exchange to extend the pilot program prior
to its expiration on November 5, 2018, and maintain the status quo,
thereby reducing market disruption. The Commission believes that
waiving the 30-day operative delay is consistent with the protection of
investors and the public interest as it will allow the pilot program to
continue uninterrupted, thereby avoiding investor confusion that could
result from a temporary interruption in the pilot program. For this
reason, the Commission designates the proposed rule change to be
operative upon filing.\17\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ 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 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-2018-070 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-2018-070. This file
number should be included on the
[[Page 56121]]
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 a.m. and 3 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-2018-070, and should be submitted on or before November 30, 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. 2018-24522 Filed 11-8-18; 8:45 am]
BILLING CODE 8011-01-P
