Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend Rule 6.4-O, Series of Options Open for Trading, 61687-61689 [2018-25994]
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Federal Register / Vol. 83, No. 231 / Friday, November 30, 2018 / Notices
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:
• 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–
CboeBYX–2018–024 on the subject line.
Paper Comments
amozie on DSK3GDR082PROD with NOTICES1
• 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–CboeBYX–2018–024. 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–CboeBYX–2018–024 and
should be submitted on or before
December 21, 2018.
7 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:00 Nov 29, 2018
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Eduardo A. Aleman,
Assistant Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[FR Doc. 2018–25999 Filed 11–29–18; 8:45 am]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Amend Rule 6.4–O,
Series of Options Open for Trading
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
Jkt 247001
61687
[Release No. 34–84647; File No. SR–
NYSEArca–2018–84]
November 26, 2018.
[Release No. 34–84651; File No. SR–
PEARL–2018–19]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Withdrawal of
a Proposed Rule Change To Amend
the Fee Schedule Regarding
Connectivity Fees for Members and
Non-Members
November 26, 2018.
On September 18, 2018, MIAX
PEARL, LLC (‘‘MIAX PEARL’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend the MIAX PEARL Fee Schedule
to increase certain connectivity fees.
The proposed rule change was
immediately effective upon filing with
the Commission pursuant to Section
19(b)(3)(A) of the Act.3 On October 10,
2018 the proposed rule change was
published for comment in the Federal
Register and, pursuant to Section
19(b)(3)(C) of the Act, the Commission:
(1) Temporarily suspended the
proposed rule change; and (2) instituted
proceedings to determine whether to
approve or disapprove the proposal.4
The Commission received one
comment letter on the proposal.5 On
November 23, 2018, the Exchange
withdrew the proposed rule change
(SR–PEARL–2018–19).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–25995 Filed 11–29–18; 8:45 am]
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 See Securities Exchange Act Release No. 84358
(October 3, 2018), 83 FR 51022.
5 See Letter from Theodore R. Lazo, Managing
Director and Associate General Counsel, and Ellen
Greene, Managing Director, The Securities Industry
and Financial Markets Association, to Brent J.
Fields, Secretary, Commission, dated October 15,
2018.
6 17 CFR 200.30–3(a)(12).
2 17
PO 00000
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Fmt 4703
Sfmt 4703
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
November 19, 2018, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. 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
Rule 6.4–O. The proposed rule change
is available on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization 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 those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to amend
Rule 6.4–O, Series of Options Open for
Trading, to permit the listing and
trading of up to ten expiration months
for long term options on the SPDR® S&P
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
E:\FR\FM\30NON1.SGM
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61688
Federal Register / Vol. 83, No. 231 / Friday, November 30, 2018 / Notices
500® Exchange-Traded Fund (the ‘‘SPY
ETF’’).
Rule 6.4–O(d) provides that the
Exchange may list, with respect to any
class of stock or Exchange-Traded Fund
Share options series, options having
from twelve up to thirty-nine months
from the time they are listed until
expiration (‘‘LEAPS’’). Under the
current Rule, the Exchange may list up
to six LEAPS expiration months.4 The
Exchange proposes to amend Rule 6.4–
O(d) to permit up to ten LEAPS
expiration months for options on the
SPY ETF.5 This proposal, which is
substantially the same as a recent rule
amendment submitted by Nasdaq PHLX
LLC (‘‘PHLX’’) and driven by customer
demand,6 would add liquidity to the
SPY ETF options market by allowing
market participants to hedge risks
relating to SPY ETF positions over a
potentially longer time period with a
known and limited cost.
The SPY ETF options market today is
characterized by its tremendous daily
and annual liquidity. As a consequence
the Exchange believes that the listing of
additional SPY ETF LEAPS expiration
months would be well received by
investors. This proposal to expand the
number of permitted SPY ETF LEAPS
would not apply to LEAPS on any other
class of stock or Exchange-Traded Fund
Share options.7
amozie on DSK3GDR082PROD with NOTICES1
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) 8 of the
Securities Exchange Act of 1934 (the
‘‘Act’’), in general, and furthers the
objectives of Section 6(b)(5),9 in
particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
4 Strike price interval, bid/ask differential and
continuity rules shall not apply to equity options
or Exchange-Traded Fund Shares options until the
time to expiration is less than nine months. See
Rule 6.4–O(d).
5 See proposed Rule 6.4–O(d) (providing in
relevant part, that ‘‘[t]he Exchange may open for
trading up to ten expiration months for options on
the [SPY ETF] and up to six extended far term
expiration months for options on any ExchangeTrade Fund Share or equity option class’’).
6 See also Securities Exchange Act Release No.
84449 (October 18, 2018), 83 FR 53699 (October 24,
2018) (SR–Phlx–2018–64) (‘‘PHLX Rule Change’’).
Rule 5.19–O(b)(1) likewise provides for up to ten
expirations months in LEAPS on index options.
Thus, the Exchange proposes to delete reference
[sic] to index options in proposed Rule 6.4–O to
enhance internal consistency and reduced [sic] as
relates to the number of expiration months (i.e., ten)
allowed for index options. See proposed Rule 6.4–
O(d).
7 Historically, SPY is the largest and most actively
traded ETF in the United States as measured by its
assets under management and the value of shares
traded.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
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Jkt 247001
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest, by
offering market participants additional
LEAPS on SPY options for their
investment and risk management
purposes. The proposal is intended
simply to provide additional trading
opportunities which have been
requested by customers, thereby
facilitating transactions in options and
contributing to the protection of
investors and the maintenance of fair
and orderly markets. The proposed rule
change responds to the continuing
needs of market participants,
particularly portfolio managers and
other institutional customers, by
providing protection from long-term
market moves and by offering an
alternative to hedging portfolios with
futures positions or off-exchange
customized derivative instruments.
The Exchange believes that the
addition today of four additional
expiration months for SPY ETF LEAPS
does not represent a proliferation of
expiration months, but is instead a very
modest expansion of LEAPS options in
response to stated customer demand.
Significantly, the proposal would
feature new LEAPS expiration months
in only a single class of options—the
SPY ETF—that are very liquid and
heavily traded, as discussed above.
Additionally, the Exchange notes that
ten expiration months are already
permitted for stock index LEAPS
options on the Exchange as well as on
other markets.10 Further, the Exchange
has the necessary systems capacity to
support the new SPY ETF LEAPS
expiration months.
The Exchange notes that this proposal
is substantially the same as a recent rule
amendment submitted by PHLX.11
The Exchange respectfully requests
that the Commission waive the 30-day
operative delay so that the proposed
rule change may become effective and
operative upon filing with the
Commission pursuant to Section
19(b)(3)(A) of the Act 12 and paragraph
(f)(6) of Rule 19b–4 thereunder.13 The
Exchange believes that waiving the
operative delay would be consistent
with the protection of investors and the
public interest because the proposed
rule change would allow the Exchange
to implement the modified rule, which
10 See Rule 5.19–O(b)(1) and PHLX Rule
1101A(b)(iii).
11 See PHLX Rule Change, supra note 6.
12 15 U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(6).
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
aligns with the rules of another options
exchange, without delay.14
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The proposal
merely provides investors additional
investment and risk management
opportunities by providing flexibility to
the Exchange to list additional long term
options expiration series, expanding the
number of SPY ETF LEAPS offered on
the Exchange from six expiration
months to ten expiration months.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 15 and Rule 19b–
4(f)(6) thereunder.16
A proposed rule change filed under
Rule 19b–4(f)(6) 17 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),18 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 upon filing. The
Exchange’s proposal would eliminate an
internal inconsistency in the Exchange’s
rules and also conform the Exchange’s
rules relating to the permitted number
14 See
Phlx Rule Change, supra note 6.
U.S.C. 78s(b)(3)(A).
16 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.
17 Id.
18 17 CFR 240.19b–4(f)(6)(iii).
15 15
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Federal Register / Vol. 83, No. 231 / Friday, November 30, 2018 / Notices
of SPY ETF LEAPS expiration months to
those of PHLX.19 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
proposal operative upon filing.20
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.
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:
amozie on DSK3GDR082PROD with NOTICES1
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–
NYSEArca–2018–84 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–NYSEArca–2018–84. 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
19 See
supra, note 6.
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).
20 For
VerDate Sep<11>2014
17:00 Nov 29, 2018
Jkt 247001
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–NYSEArca–2018–84 and
should be submitted on or before
December 21, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–25994 Filed 11–29–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84646; File No. SR–FINRA–
2018–039]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a
Proposed Rule Change Relating to
FINRA Rule 4570 (Custodian of Books
and Records)
November 26, 2018.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘SEA,’’ ‘‘Act’’ or ‘‘Exchange Act’’) 1 and
Rule 19b–4 thereunder,2 notice is
hereby given that on November 15,
2018, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by FINRA. 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
FINRA is proposing to amend FINRA
Rule 4570 (Custodian of Books and
Records) to: (1) Provide a member that
is filing a Form BDW (Uniform Request
for Broker-Dealer Withdrawal) the
option of designating another FINRA
member as the custodian of its books
and records on the form; (2) clarify the
obligations of the designated custodian;
and (3) require the designated custodian
to consent to act in such a capacity.
The text of the proposed rule change
is available on FINRA’s website at
https://www.finra.org, at the principal
office of FINRA 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,
FINRA 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. FINRA 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
SEA Rule 17a–4 (Records to be
Preserved by Certain Exchange
Members, Brokers and Dealers) 3
requires broker-dealers to retain their
books and records for specified
retention periods.4 Pursuant to SEA
Rule 17a–4(g),5 a firm that stops doing
business as a registered broker-dealer
has a continuing obligation to retain its
required books and records for the
remainder of the specified retention
periods. Form BDW requires that a firm
that is withdrawing its registration
identify and provide the contact
information of the person who will have
custody of the firm’s books and records
after the firm has discontinued its
business operations. Form BDW also
requires that the firm provide the
address where the books and records
will be located, if different than the
custodian’s address. In addition, the
Form BDW provides that the firm and
person signing the form on behalf of the
firm must certify that the firm’s books
and records will be preserved and made
available for inspection.
FINRA Rule 4570 currently requires a
member to designate as the custodian of
its required books and records on the
3 17
21 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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61689
CFR 240.17a–4.
also FINRA Rule 4511 (General
Requirements).
5 17 CFR 240.17a–4(g).
4 See
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]]>Agencies
[Federal Register Volume 83, Number 231 (Friday, November 30, 2018)]
[Notices]
[Pages 61687-61689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25994]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84647; File No. SR-NYSEArca-2018-84]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change to Amend Rule 6.4-
O, Series of Options Open for Trading
November 26, 2018.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on November 19, 2018, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 6.4-O. The proposed rule change
is available on the Exchange's website at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to amend Rule 6.4-O, Series of
Options Open for Trading, to permit the listing and trading of up to
ten expiration months for long term options on the SPDR[supreg] S&P
[[Page 61688]]
500[supreg] Exchange-Traded Fund (the ``SPY ETF'').
Rule 6.4-O(d) provides that the Exchange may list, with respect to
any class of stock or Exchange-Traded Fund Share options series,
options having from twelve up to thirty-nine months from the time they
are listed until expiration (``LEAPS''). Under the current Rule, the
Exchange may list up to six LEAPS expiration months.\4\ The Exchange
proposes to amend Rule 6.4-O(d) to permit up to ten LEAPS expiration
months for options on the SPY ETF.\5\ This proposal, which is
substantially the same as a recent rule amendment submitted by Nasdaq
PHLX LLC (``PHLX'') and driven by customer demand,\6\ would add
liquidity to the SPY ETF options market by allowing market participants
to hedge risks relating to SPY ETF positions over a potentially longer
time period with a known and limited cost.
---------------------------------------------------------------------------
\4\ Strike price interval, bid/ask differential and continuity
rules shall not apply to equity options or Exchange-Traded Fund
Shares options until the time to expiration is less than nine
months. See Rule 6.4-O(d).
\5\ See proposed Rule 6.4-O(d) (providing in relevant part, that
``[t]he Exchange may open for trading up to ten expiration months
for options on the [SPY ETF] and up to six extended far term
expiration months for options on any Exchange-Trade Fund Share or
equity option class'').
\6\ See also Securities Exchange Act Release No. 84449 (October
18, 2018), 83 FR 53699 (October 24, 2018) (SR-Phlx-2018-64) (``PHLX
Rule Change''). Rule 5.19-O(b)(1) likewise provides for up to ten
expirations months in LEAPS on index options. Thus, the Exchange
proposes to delete reference [sic] to index options in proposed Rule
6.4-O to enhance internal consistency and reduced [sic] as relates
to the number of expiration months (i.e., ten) allowed for index
options. See proposed Rule 6.4-O(d).
---------------------------------------------------------------------------
The SPY ETF options market today is characterized by its tremendous
daily and annual liquidity. As a consequence the Exchange believes that
the listing of additional SPY ETF LEAPS expiration months would be well
received by investors. This proposal to expand the number of permitted
SPY ETF LEAPS would not apply to LEAPS on any other class of stock or
Exchange-Traded Fund Share options.\7\
---------------------------------------------------------------------------
\7\ Historically, SPY is the largest and most actively traded
ETF in the United States as measured by its assets under management
and the value of shares traded.
---------------------------------------------------------------------------
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \8\ of the
Securities Exchange Act of 1934 (the ``Act''), in general, and furthers
the objectives of Section 6(b)(5),\9\ in particular, in that it is
designed to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general to protect investors and the
public interest, by offering market participants additional LEAPS on
SPY options for their investment and risk management purposes. The
proposal is intended simply to provide additional trading opportunities
which have been requested by customers, thereby facilitating
transactions in options and contributing to the protection of investors
and the maintenance of fair and orderly markets. The proposed rule
change responds to the continuing needs of market participants,
particularly portfolio managers and other institutional customers, by
providing protection from long-term market moves and by offering an
alternative to hedging portfolios with futures positions or off-
exchange customized derivative instruments.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the addition today of four additional
expiration months for SPY ETF LEAPS does not represent a proliferation
of expiration months, but is instead a very modest expansion of LEAPS
options in response to stated customer demand. Significantly, the
proposal would feature new LEAPS expiration months in only a single
class of options--the SPY ETF--that are very liquid and heavily traded,
as discussed above. Additionally, the Exchange notes that ten
expiration months are already permitted for stock index LEAPS options
on the Exchange as well as on other markets.\10\ Further, the Exchange
has the necessary systems capacity to support the new SPY ETF LEAPS
expiration months.
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\10\ See Rule 5.19-O(b)(1) and PHLX Rule 1101A(b)(iii).
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The Exchange notes that this proposal is substantially the same as
a recent rule amendment submitted by PHLX.\11\
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\11\ See PHLX Rule Change, supra note 6.
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The Exchange respectfully requests that the Commission waive the
30-day operative delay so that the proposed rule change may become
effective and operative upon filing with the Commission pursuant to
Section 19(b)(3)(A) of the Act \12\ and paragraph (f)(6) of Rule 19b-4
thereunder.\13\ The Exchange believes that waiving the operative delay
would be consistent with the protection of investors and the public
interest because the proposed rule change would allow the Exchange to
implement the modified rule, which aligns with the rules of another
options exchange, without delay.\14\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ See Phlx Rule Change, supra note 6.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposal merely provides
investors additional investment and risk management opportunities by
providing flexibility to the Exchange to list additional long term
options expiration series, expanding the number of SPY ETF LEAPS
offered on the Exchange from six expiration months to ten expiration
months.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 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.
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A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\18\ 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 upon filing. The Exchange's proposal would
eliminate an internal inconsistency in the Exchange's rules and also
conform the Exchange's rules relating to the permitted number
[[Page 61689]]
of SPY ETF LEAPS expiration months to those of PHLX.\19\ 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 proposal operative upon filing.\20\
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\17\ Id.
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ See supra, note 6.
\20\ 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 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.
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-NYSEArca-2018-84 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-NYSEArca-2018-84. 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-NYSEArca-2018-84 and should be submitted
on or before December 21, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-25994 Filed 11-29-18; 8:45 am]
BILLING CODE 8011-01-P
