Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend Its Provision Related to Its Risk Monitor Mechanism, 64397-64401 [2018-27085]
Agencies
[Federal Register Volume 83, Number 240 (Friday, December 14, 2018)]
[Notices]
[Pages 64397-64401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27085]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84777; File No. SR-CboeBZX-2018-086]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Amend Its Provision Related to Its Risk Monitor Mechanism
December 10, 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 29, 2018, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') 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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
amend its provision related to its Risk Monitor Mechanism. The text of
the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 21.16 which governs the Risk
Monitor Mechanism.
Background
By way of background, the Risk Monitor Mechanism providers Users
\5\ with the ability to manage their order and execution risk.
Particularly, Rule 21.16 provides that the System will maintain a
counting program for each User. A User may configure a single counting
program or multiple counting programs to govern its trading activity
(i.e., on a per port basis). The counting program counts executions,
contract volume and notional value, within a specified time period
established by each User (``specified time period'') and on an absolute
basis for the trading day (``absolute limits''). The specified time
period will commence for an option when a transaction occurs in any
series in such option. The counting program will also count a User's
executions, contract volume and notional value across all options which
a User trades (``Firm Category''). When the system determines that a
User's Specified Engagement Trigger (i.e., a volume trigger, notional
trigger, count trigger and percentage trigger) has reached its
established limit, the Risk Monitor Mechanism cancels or rejects such
User's orders or quotes \6\ in all series of the class and cancels or
rejects any additional orders or quotes from the User in the class
until the counting program resets.
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\5\ See Exchange Rule 1.5(ee). The term ``User'' means any
Member or Sponsored Participant who is authorized to obtain access
to the System pursuant to Rule 11.3. As discussed below, the
Exchange is proposing to replace references to ``Users'' in Rule
21.16 with ``Member''.
\6\ See infra discussion accompanying footnotes 6-7 [sic].
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Proposed Rule Change
The Exchange proposes to amend Rule 21.16 to (i) adopt the Risk
Monitor Mechanism rule language used by its affiliated exchange, Cboe
C2 Exchange, Inc. (``C2'') (ii) provide the ability for Users [sic] to
configure limits applicable to a group of EFIDs, and (iii) adopt a new
a new risk parameter.
Rule Harmonization
First, the Exchange proposes to harmonize its Risk Monitor
Mechanism Rule to that of its affiliated Exchange, C2. Particularly, C2
Rule 6.14 governs, among other things, its Risk Monitor Mechanism
functionality. The Exchange notes the functionality of the Risk Monitor
Mechanism is substantively the same as the Risk Monitor Mechanism on
BZX. Indeed, the Exchange notes that C2 just recently adopted Rule 6.14
in connection with the technology migration of C2 onto the options
platform of EDGX, and at such time conformed its previous Risk Monitor
Mechanism functionality to the functionality that already existed on
BZX.\7\ Although the functionality is substantively the same, the rule
structure and terminology used in the BZX and C2 rules differ. The
Exchange wishes to provide harmonization with respect to this rule
across the two exchanges and accordingly proposes to
[[Page 64398]]
conform BZX Rule 21.16 to C2 Rule 6.14(c)(5) (i.e., delete current Rule
21.16 in its entirety with the exception of subparagraphs (d) and (e),
which will be relocated as described below, and adopt in whole the
language from the relevant provisions of C2 Rule 6.14).\8\ As noted
above, the Exchange is also proposing substantive enhancements to its
current functionality, which is described further below. The Exchange
notes that C2 is simultaneously proposing the same Risk Monitor
Mechanism enhancements and those enhancements are included in the new
proposed conformed rule language.
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\7\ See Securities Exchange Act Release No. 83214 (May 11,
2018), 83 FR 22796 (May 16, 2018) (SR-C2-2018-005).
\8\ The Exchange notes that it is not proposing to adopt
subparagraph (c)(5)(E) of C2 Rule 6.14 as such provision relates to
complex orders, which functionality the Exchange currently does not
offer.
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First, the Exchange notes that proposed Rule 21.16 will not use the
term ``User'', and instead will use the term ``Member''.\9\ The
Exchange notes that the definition of User is broader than Member, as
it specifically captures Sponsored Participants. The Exchange believes
``Member'' is the more appropriate term to use with respect to the Risk
Monitor Mechanism as the rule describes how the functionality works
with respect to Members, and not necessarily Sponsored Participants.
The Exchange notes that it currently does not have any Sponsored
Participants, and to the extent it expects to have any in the future,
it will revise the rule as needed to incorporate how the Risk Monitor
Mechanism would function with respect to Sponsored Participants. The
Exchange notes that ``User'' will be referred to herein as ``Member''.
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\9\ See Exchange Rule 1.5(n). The term ``Member'' shall mean any
registered broker or dealer that has been admitted to membership in
the Exchange. A Member will have the status of a ``member'' of the
Exchange as that term is defined in Section 3(a)(3) of the Act.
Membership may be granted to a sole proprietor, partnership,
corporation, limited liability company or other organization which
is a registered broker or dealer pursuant to Section 15 of the Act,
and which has been approved by the Exchange. The Exchange notes that
corresponding C2 Rule 6.14(c)(5) will use the term ``TPH'', as
``Member'' is not a defined term used by C2.
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Next, in connection with adopting C2's Risk Monitor Mechanism Rule
language, the Exchange notes that it will be eliminating the term
``class'' and replacing it with ``underlying''. Specifically, the
Exchange notes that the Risk Monitor Mechanism is configured to count
the risk parameters (referred to as ``Specified Engagement Triggers''
in current BZX Rule 21.16) across underlying securities or indexes. As
an example, any option related to Apple (AAPL), would be considered to
have the same underlying. Accordingly, if a corporate action resulted
in AAPL1, AAPL and APPL1 one [sic] would be considered to share the
same underlying symbol AAPL. Only a single symbol-level rule for
underlying AAPL would be configurable by the Risk Monitor Mechanism.
The Exchange notes that the term ``underlying'' is also utilized in the
Exchange's technical specification documents. The Exchange therefore
believes underlying is a more accurate term to use.
The Exchange also intends to clarify and codify in the new rule
language what occurs in the event a Member does not reactivate its
ability to send quotes or orders after its configured risk parameter
limits have been reached. Currently, BZX Rule 21.16 explains how a
Member may reset its counting periods. The proposed rule language
includes a provision that provides that if the Exchange cancels all of
a Member's quotes and orders resting in the Book, and the Member does
not reactivate its ability to send quotes or orders, the block will be
in effect only for the trading day that the Member reached its limits.
The Exchange notes this is not a substantive change, but rather is
current practice, and that its affiliated Exchange, Cboe Options,
includes similar language in its rules.\10\ The Exchange believes
adding this provision to the rules provides further transparency in its
rules and reduces potential confusion as to what would happen in the
situation where a Member fails to reset the counting program.
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\10\ See Cboe Options Rule 8.18.
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In connection with adopting C2's Risk Monitor Mechanism Rule
language, the Exchange also proposes to include language regarding a
reset limit. Particularly, C2 Rule 6.14(c)(5)(d)(iii) [sic] (which will
be renumbered to C2 Rule 6.14(c)(5)(d)(iv) [sic]) provides that the
Exchange may restrict the number of Member underlying, EFID and EFID
Group resets per second. The Exchange believes adding this provision to
its rules provides transparency in the rules that the Exchange can
impose such a restriction. The Exchange notes this is not a substantive
change, but rather current practice.
In connection with the harmonization of C2 Rue [sic] 6.14, the
Exchange notes that certain terminology is also changing. For example,
current BZX Rule 21.16, provides that the counting program counts a
Member's executions, contract volume and notional value across all
options which a Member trades (``Firm Category''). Going forward, this
concept will be restated to provide generally that the System will
count the risk parameters across all underlyings of an EFID (``EFID
limit''). The Exchange reiterates the concept is the same, but the
language conforms to C2 rules and makes the rule easier to read.
The Exchange also proposes to adopt a definition of EFID as it
proposes to reference EFIDs in proposed BZX Rule 21.16. Particularly,
the Exchange proposes to add Rule 21.1(k) to define and describe EFIDs.
Specifically, a Member may obtain one or more EFIDs from the Exchange
(in a form and manner determined by the Exchange). The Exchange assigns
an EFID to a Member, which the System uses to identify the Member and
clearing number for the execution of orders and quotes submitted to the
System with that EFID.\11\ Each EFID corresponds to a single Member and
a single clearing number of a Clearing Member with the Clearing
Corporation. A Member may obtain multiple EFIDs, which may be for the
same or different clearing numbers. A Member may only identify for any
of its EFIDs the clearing number of a Clearing Member that is a
Designated Give Up or Guarantor of the Trading Permit Holder as set
forth in Rule 21.12. [sic] A Member is able (in a form and manner
determined by the Exchange) to designate which of its EFIDs may be used
for each of its ports. If a Member submits an order or quote through a
port with an EFID not enabled for that port, the System cancels or
rejects the order or quote. The proposed rule change regarding EFIDs is
not a substantive change but rather codifies current functionality and
mirrors current C2 Rule 6.8(b). The Exchange believes including a
description of the use of EFIDs in the Rules adds transparency to the
Rules.
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\11\ The Exchange notes that currently EDGX's [sic] rules refer
only to the term ``MPID'', which is a Member's market participant
identifier used for equities trading. The Exchange does not utilize
MPIDs on its options platform and uses EFIDS instead. EFIDS are
generally equivalent to MPIDs.
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The Exchange also notes that the new harmonized rule language
incorporates the use of the term ``quote'' and ``quotes''.\12\
Currently, however, when describing what happens when a Specified
Engagement Trigger is reached, Rule 21.16(b)(i) only references what
happens to a Member's ``orders''. The Exchange notes however, that the
term ``order'' as is used in Rule 21.16 was intended to capture both
orders and quotes. Particularly, an ``order'' is defined as a firm
commitment to buy or sell option contracts submitted to the System by a
Member, and a ``quote'' is defined as a bid or offer entered by a
Market-Maker as a firm order that updates the Market-Maker's previous
[[Page 64399]]
bid or offer, if any.\13\ Indeed, the Exchange notes that the proposed
reference to ``quote'' and ``quotes'' is not a substantive change to
how the Risk Monitor Mechanism currently works or will work going
forward. Accordingly, the Exchange believes incorporating the term
``quote'' and ``quotes'' alleviates confusion and better reflects how
the Risk Monitor Mechanism operates (i.e., both orders and quotes, as
defined, can be affected). Similarly, the Exchange believes the
proposal to eliminate the references to a ``User's order size'',
``Market-Maker's quote size'' and ``displayed and non-displayed size'',
with respect to how the percentage trigger is calculated is not a
substantive change. The Exchange notes the trigger is calculated the
same on BZX and C2, and although proposed BZX Rule 21.16(a)(iv) doesn't
reference orders and Market-Maker quotes in particular, the calculation
will not be changing and the Exchange doesn't believe a reference to
orders and Market-Maker quote size in particular under this provision
is necessary. Similarly, the Exchange does not believe maintaining a
reference to ``displayed'' and ``non-displayed'' size is necessary, as
the Exchange believes the proposed language is broad enough to capture
both types of orders. The Exchange also reiterates the absence of such
references is not a substantive change and the calculation of the
percentage trigger is not changing.
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\12\ See subparagraph (b), (c) and (d) of proposed EDGX [sic]
Rule 21.16.
\13\ See BZX Rules 16.1(a)(42) and (51) and 21.1(c).
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As noted above, the Exchange is not proposing to eliminate
subparagraphs (d) or (e) of current BZX Rule 21.16, but rather relocate
these provisions. The Exchange proposes to first relocate the contents
of current subparagraph (d) to new subparagraph (d)(vi) of proposed BZX
Rule 21.16 and clarify that the proposed provision governs ``other
resets'' (i.e., resets that are not a result from a limit being
reached).\14\ Particularly, the provision provides the System will
reset the counting period for absolute limits when a Member refreshes
its risk limit thresholds. The System will also reset the counting
program and commence a new specified time period when (i) a previous
specified time period has expired and a transaction occurs in any
series of an underlying or (ii) a Member refreshes its risk limit
thresholds prior to the expiration of the specified time period. The
Exchange proposes to keep this language as it provides transparency in
the rules as to when other resets occur without limits being reached.
Lastly, the Exchange notes that that current subparagraph (e) will be
included under subparagraph (e) of the new proposed Rule 21.16.
Particularly, ``new'' subparagraph (e) provides that a Member may also
engage the Risk Monitor Mechanism to cancel resting bids and offers, as
well as subsequent orders as set forth in BZX Rule 22.11.\15\
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\14\ The Exchange notes that C2 is also proposing to add this
provision to its C2 Rule 6.14 in order to provide further
transparency in its rules governing the Risk Monitor Mechanism.
\15\ The Exchange notes that C2 is proposing to also add this
provision to its C2 Rule 6.14 in order to provide further
transparency in its rules governing the Risk Monitor Mechanism.
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EFID Groups
The Exchange next proposes to provide in the rules that in addition
to underlying limits and EFID limits, the System will be able to count
each of the risk parameters across all underlyings for a group of EFIDs
(``EFID Group'')(``EFID Group limit'').\16\ Similar to when a
underlying limit or EFID limit are reached, when a Member's EFID Group
limit is reached, the Risk Monitor Mechanism will cancel or reject such
Member's orders or quotes in all underlying and cancel or reject any
additional orders or quotes from any EFID within that EFID Group in all
underlyings until the counting program resets. The System will not
accept new orders or quotes from any EFID within an EFID Group after an
EFID Group limit is reached until the Member manually notifies the
Trade Desk to reset the counting program for the EFID Group, unless the
Member instructs the Exchange to permit it to reset the counting
program by submitting an electronic message to the System. The Exchange
believes each Member is in the best position to determine risk settings
appropriate for its firm based on its trading activity and business
needs and that it may be based on a single EFID or EFID Group(s). The
Exchange notes that its affiliate Exchange, Cboe Exchange, Inc. (``Cboe
Options'') similarly allows its members to set similar risk parameters
at the acronym-level (which is similar to an EFID) or firm level
(similar to an EFID Group).\17\
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\16\ An EFID may not belong to more than one EFID Group. The
Exchange notes that the Members determine how many, if any, EFID
Groups to establish and determine which EFIDs belong to a particular
EFID Group, if any.
\17\ See Cboe Options Rule 8.18.
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New Risk Parameter
The Exchange lastly proposes to adopt a new risk parameter.
Specifically, under the proposed functionality, a Member may specify a
maximum number of times that the risk parameters (i.e., volume,
notional, count and/or percentage) are reached over a specified
interval or absolute period (``risk trips''). When a risk trip limit
has been reached, the Risk Monitor Mechanism will cancel or reject a
Member's orders or quotes pursuant to subparagraph (b) of Rule 21.16.
The Exchange notes that a similar risk parameter (i.e., a parameter
based on the number of risk ``incidents'' that occur over a specified
time) is available on its affiliate Exchange, Cboe Options.\18\ The
Exchange believes the proposed changes to its Risk Monitor Mechanism
rule sufficiently allows Members to adjust and adopt parameter inputs
in accordance with their business models and risk management needs.
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\18\ See Cboe Options Rule 8.18, which provides that a Hybrid
Market Maker or a TPH Organization may specify a maximum number of
Quote Risk Monitor Mechanism (``QRM'') QRM Incidents on an Exchange-
wide basis.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\19\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \20\ 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) \21\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(5).
\21\ Id.
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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.\22\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \23\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable
[[Page 64400]]
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) \24\ requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
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\22\ 15 U.S.C. 78f(b).
\23\ 15 U.S.C. 78f(b)(5).
\24\ Id.
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First, the Exchange believes its proposal to harmonize Rule 21.16
to C2 Rule 6.14 provides uniformity across affiliated exchange rules
that govern the same functionality and makes the rule easier to read,
which reduces potential confusion. The Exchange also proposes to mirror
C2 Rule 6.14 because it believes consistent rules will increase the
understanding of the Exchange's operations for Members that are also
participants on C2. As discussed above, notwithstanding the proposal to
adopt new terminology and/or the absence of certain references, the
Exchange intends no substantive changes to the meaning or application
of Rule 21.16 other than what is described above with respect to EFID
Groups and the new risk trips parameter. Particularly, the Exchange
believes the adoption of the definition of ``EFID'' provides
transparency in the rules and alleviates confusion, as the Exchange
references EFIDs multiple times throughout proposed Rule 21.16 and
utilizes EFIDs generally on the Exchange with respect to its options
platform. The Exchange notes the proposed definition is substantively
the same as the definition of EFIDs under C2's rules.\25\ The Exchange
believes the use of ``quote'' and ``quotes'' also alleviates confusion
as the current Risk Monitor Mechanism in fact affects both orders and
quotes, as defined, and was intended to cover both a Member's orders
and Market Maker quotes. Similarly, the Exchange believes using the
term ``underlying'' instead of ``class'' and ``Member'' instead of
``user'' alleviates potential confusion as the proposed terms more
accurately reflect how the Risk Monitor Mechanism operates.
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\25\ See C2 Rule 6.8(b). The Exchange notes that proposed Rule
21.1(k)(2) does not include a cross reference to a rule regarding
Designated Give Ups and Guarantors as BZX rules do not have a
similar corresponding rule as C2 Rule 6.30.
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The Exchange believes the rule changes to codify current practice
alleviates potential confusion, provides transparency in the rules and
makes the rules easier to read. For example, providing language
regarding (i) a Member's failure to reset or initiate a reset of the
counting program and (ii) the Exchange's ability to restrict resets,
provides transparency in the rules as to what occurs in those
situations, harmonizes rule language with that of the Exchange's
affiliated Exchanges, and reduces potential confusion. The alleviation
of confusion removes impediments to, and perfects the mechanism of, a
free and open market and a national market system, and, in general,
protects investors and the public interest.
The Exchange believes providing Members the ability to configure
certain risk parameters across underlyings for an EFID Group is also
appropriate because it permits a Member to protect itself from
inadvertent exposure to excessive risk on an additional level (i.e., on
an EFID group-level, not just underlying- or EFID-level). Reducing such
risk will enable Members to enter quotes and orders with protection
against inadvertent exposure to excessive risk, which in turn will
benefit investors through increased liquidity for the execution of
their orders. Such increased liquidity benefits investors because they
may receive better prices and because it may lower volatility in the
options market. The Exchange also believes each Member is in the best
position to determine risk settings appropriate for its firm based on
its trading activity and business needs and that that may be based on
an EFID Group(s). Additionally, as discussed above, Cboe Options
similarly allows its members to set risk parameters at the acronym-
level (which is similar to an EFID) or firm-level (similar to an EFID
Group).\26\
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\26\ See Cboe Options Rule 8.18.
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Lastly, the Exchange believes the proposal to adopt the new risk
parameter based on number of times a risk parameter or group of risk
parameters are reached will provide Members with an additional tool for
managing risks. Furthermore, as noted above, the Exchange's affiliated
exchange offers similar functionality.\27\ Overall, the proposed rule
change provides Members more protections that reduce the risks from
potential system errors and market events. As a result, the proposed
changes, including the new risk parameter for the Risk Monitor
Mechanism, have the potential to promote just and equitable principles
of trade. Additionally, the proposed changes apply to all Members.
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\27\ See Cboe Options Rule 8.18.
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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 that is not necessary or appropriate
in furtherance of the purposes of the Act. Rather, the Exchange
believes that the proposed changes with respect to its Risk Monitor
Mechanism help promote fair and orderly markets and provide clarity and
transparency the Rule. For example, the proposed rule change adds an
additional risk control parameter and flexibility to help further
prevent potentially erroneous executions, which benefits all market
participants. The proposed changes apply uniformly to all Members and
the Exchange notes that the proposed changes apply to all quotes and
orders in the same manner. Additionally, the Exchange does not believe
that the proposed rule change will impose any burden on intermarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because the proposed enhancements apply only to
trading on the Exchange. Additionally, the Exchange notes that it is
voluntary for the Members to determine whether to make use of the new
enhancements of the Risk Monitor Mechanism. To the extent that the
proposed changes may make the Exchange a more attractive trading venue
for market participants on other exchanges, such market participants
may elect to become Exchange market participants.
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 foregoing proposed rule change does not:
A. significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. 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
[[Page 64401]]
Act \28\ and Rule 19b-4(f)(6) thereunder.\29\
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\28\ 15 U.S.C. 78s(b)(3)(A).
\29\ 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 pursuant to Rule 19b-4(f)(6) under the
Act \30\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \31\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay to provide
Members with additional tools and greater flexibility for managing
their potential risk as soon as possible. Accordingly, the Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest. Therefore, the
Commission hereby waives the operative delay and designates the
proposal as operative upon filing.\32\
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\30\ 17 CFR 240.19b-4(f)(6).
\31\ 17 CFR 240.19b-4(f)(6)(iii).
\32\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CboeBZX-2018-086 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-CboeBZX-2018-086. 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-CboeBZX-2018-086 and should be submitted
on or before January 4, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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\33\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27085 Filed 12-13-18; 8:45 am]
BILLING CODE 8011-01-P
