Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend the Exchange's Eighth Amended and Restated Bylaws (the “Exchange Bylaws”) the Fourth Amended and Restated Bylaws (the “Parent Bylaws”) of Its Parent Corporation, Cboe Global Markets, Inc. (“Cboe” or the “Parent”), 4880-4883 [2019-02605]

Download as PDF 4880 Federal Register / Vol. 84, No. 33 / Tuesday, February 19, 2019 / Notices requirement is reasonable as it only slightly reduces the amount of time a MSCI LMM must meet the heightened quoting standard in a month. Moreover, the Exchange believes reducing the amount of time a MSCI LMM must meet the heightened quoting standard is reasonable as extreme volatility in the market during a given month may make it more difficult for a MSCI LMM to meet the heightened quoting standard for the amount of time currently required. The proposed change, therefore, provides a MSCI LMM more flexibility in meeting the heightened quoting standard, even in extremely volatile months. Indeed, the Exchange wishes to ensure a MSCI LMM is adequately incentivized to provide liquid and active markets in the MSCI products to encourage its growth. Additionally, if a MSCI LMM does not satisfy the heightened quoting standard for the duration of the required time, even as amended, then it simply will not receive the offered per class payment for that month. The Exchange believes reducing the amount of time the LMM(s) needs to quote is still commensurate with the financial benefit offered. The Exchange believes that the program, even as amended, will continue to encourage increased quoting to add liquidity in MSCI products, thereby protecting investors and the public interest. tkelley on DSKBCP9HB2PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule changes will impose any burden on competition that are not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because it applies uniformly to any MSCI LMM, which market participant plays a crucial role in providing active and liquid markets in the MSCI products. 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 MSCI options are proprietary products that will only be traded on Cboe Options. To the extent that the proposed changes make Cboe Options a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become Cboe Options market participants. VerDate Sep<11>2014 17:46 Feb 15, 2019 Jkt 247001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and paragraph (f) of Rule 19b–4 9 thereunder. 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 will 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 rule-comments@ sec.gov. Please include File Number SR– CBOE–2019–006 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–2019–006. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2019–006 and should be submitted on or before March 12, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–02611 Filed 2–15–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85108; File No. SR– CboeBZX–2019–002] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend the Exchange’s Eighth Amended and Restated Bylaws (the ‘‘Exchange Bylaws’’) the Fourth Amended and Restated Bylaws (the ‘‘Parent Bylaws’’) of Its Parent Corporation, Cboe Global Markets, Inc. (‘‘Cboe’’ or the ‘‘Parent’’) February 12, 2019. 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 January 28, 2019, 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’’ 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b–4(f). PO 00000 Frm 00118 Fmt 4703 1 15 Sfmt 4703 E:\FR\FM\19FEN1.SGM 19FEN1 Federal Register / Vol. 84, No. 33 / Tuesday, February 19, 2019 / Notices 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 BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) proposes to amend the Exchange’s Eighth Amended and Restated Bylaws (the ‘‘Exchange Bylaws’’) the Fourth Amended and Restated Bylaws (the ‘‘Parent Bylaws’’) of its parent corporation, Cboe Global Markets, Inc. (‘‘Cboe’’ or the ‘‘Parent’’). The text of the proposed amendments to the Exchange Bylaws is included in Exhibit 5A, and the text of the proposed amendments to the Parent Bylaws is included in Exhibit 5B. 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. tkelley on DSKBCP9HB2PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The proposed rule change amends the Exchange Bylaws to (1) amend the provision regarding which offices may be held by the same person and (2) amend the description of the duties of President of the Exchange. The proposed rule change also amends the Parent Bylaws to (1) amend the description of the duties of President of the Parent, (2) amend language relating to the definition of ‘‘director independence,’’ and (3) make a non3 15 4 17 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). VerDate Sep<11>2014 17:46 Feb 15, 2019 Jkt 247001 substantive update to the zip code for the registered office the Corporation. Offices Held by Same Person Section 5.1(b) of the Exchange Bylaws currently provides that two or more offices may be held by the same person, except the offices of Chief Executive Officer and President.5 The Exchange proposes to amend Section 5.1(b) of the Exchange Bylaws to eliminate this restriction, and thus permit the same person to hold the offices of Chief Executive Officer and President. This proposal will provide the Exchange with the flexibility to appoint the person or persons it deems qualified and appropriate to perform the duties of both Chief Executive Officer and the President. Description of President Section 5.3 of the Parent Bylaws and Section 5.3 of the Exchange Bylaws each provide that the President of the Parent or Exchange, as applicable, shall be the chief operating officer of the Parent or Exchange, as applicable. The Exchange proposes to amend Section 5.3 of each of the Parent Bylaws and Section 5.3 of the Exchange Bylaws to provide that the President of the Parent or Exchange, as applicable, may be the chief operating officer of the Parent or Exchange, as applicable. Pursuant to this proposed change, the President of the Parent or Exchange may also serve as the chief operating officer,6 but, rather than requiring that one individual serve in both capacities, Parent and the Exchange will each have flexibility to appoint the person or persons it deems qualified and appropriate to perform the duties of the President and duties of a chief operating officer. In either case, Parent and the Exchange each will have one or more persons performing the necessary duties of each role. Definition of Director Independence Cboe recently determined to remove from listing its common stock, par value $0.01 per share (the ‘‘Common Stock’’), on the Nasdaq Stock Market LLC (‘‘Nasdaq’’) and to designate BZX as the primary listing venue for Parent’s Common Stock, which became effective in September 2018. In connection with the delisting and primary listing venue designation, the Exchange proposes to 5 Section 5.1(b) also prohibits the Chief Executive Officer and President from also being the Secretary or Assistant Secretary, which prohibition the proposal does not substantively amend. 6 This is consistent with the provision in each of the Parent Bylaws and Exchange Bylaws that provide that two or more offices may be held by the same person, subject to certain exceptions. See Section 5.1 of the Parent Bylaws and Section 5.1 of the Exchange Bylaws. PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 4881 update certain corporate governance documents, including the Parent Bylaws. Particularly, the Exchange proposes to amend Section 3.3 of the Parent Bylaws to change the definition of director independence from referencing the listing standards of the New York Stock Exchange and Nasdaq to language referencing the listing standards of each national securities exchange on which the common stock of Parent is listed. Registered Office Zip Code The Exchange proposes to amend Section 1.1 of the Parent Bylaws to update the zip code of the Parent’s registered agent from 19805 to 19801. This change is in accordance with an update from the U.S. Postal Service. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.7 Specifically, the Exchange believes the proposed rule change is consistent with Section 6(b)(1) of the Act,8 which provides that the Exchange be organized and have the capacity to be able to carry out the purposes of the Act and to enforce compliance by the Exchange’s Trading Permit Holders and persons associated with its Trading Permit Holders with the Act, the rules and regulations thereunder, and the rules of the Exchange. In particular, the Exchange believes the proposed changes are not material and will have a de minimis impact on the governance, ownership, or operations of the Exchange. The proposed rule change to permit the same person to hold the offices of Chief Executive Officer and President of the Exchange will enable the Exchange to continue to be organized and have the capacity to be able to carry out the purposes of the Act, because it will provide the Exchange with flexibility to appoint the person or persons it deems qualified and appropriate to perform the duties of both Chief Executive Officer and the President. The Exchange will continue to have a Chief Executive Officer and President—the proposed change merely permits a single person rather than multiple people to hold these offices. This will ensure continued orderly operation of the Exchange in a 7 15 8 15 E:\FR\FM\19FEN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(1). 19FEN1 4882 Federal Register / Vol. 84, No. 33 / Tuesday, February 19, 2019 / Notices manner the Exchange deems most appropriate.9 The proposed rule change to permit each of Parent and the Exchange to appoint different persons to serve as President and chief operating officer of each entity will enable the Exchange to continue to be organized and have the capacity to be able to carry out the purposes of the Act, because it will provide each entity with flexibility to appoint the person or persons it deems qualified and appropriate to perform the duties of President and a chief operating officer. Parent and the Exchange each will continue to have the necessary duties of each role performed—the proposed change merely permits multiple people rather than a single person to perform these duties. This will ensure continued orderly operation of the Exchange in a manner Parent and the Exchange deem most appropriate. The Exchange believes in light of the delisting of Parent’s Common Stock from Nasdaq, it is appropriate to remove the requirement to comply with the independence requirements contained in the listing standards of Nasdaq, as well as the independence requirements contained in the listing standards of NYSE. The Exchange notes that the independence requirements of BZX are substantially similar to the independence requirements contained in the listing standards of Nasdaq and NYSE. The Exchange believes that by ensuring its parent company’s governance documents accurately reflect the correct legal address of Parent’s registered office, the proposed rule change would reduce potential investor or market participant confusion. tkelley on DSKBCP9HB2PROD with NOTICES 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. The proposed rule change is not intended to address competitive issues but rather is concerned solely with updating the Parent Bylaws and Exchange Bylaws to reflect the changes described above. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 10 and Rule 19b–4(f)(6) thereunder.11 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) by its terms, become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b– 4(f)(6) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 12 normally does not become operative for 30 days after the date of filing. However, pursuant to Rule 19b–4(f)(6),13 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 proposal may become operative upon filing. The Exchange states that the proposed changes relating to the ability of the same person to hold multiple officer titles and the amended independence requirements are consistent with other national securities exchanges and will enable the Exchange to continue to be organized and have the capacity to be able to carry out the purposes of the Act, including protecting investors and the public interest. Further, the proposed change of updating the zip code of the Parent’s registered office does not raise any regulatory issues. For the foregoing reasons, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest and, therefore, the Commission designates the proposed rule change to be operative upon filing.14 10 15 11 17 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 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 will 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 rule-comments@ sec.gov. Please include File Number SR– CboeBZX–2019–002 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–2019–002. 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 12 Id. 9 The proposed change also conforms this provision to the corresponding provision in Parent’s Bylaws. See Section 5.1 of Parent’s Bylaws. VerDate Sep<11>2014 17:46 Feb 15, 2019 Jkt 247001 13 Id. 14 For purposes only of waiving the 30-day operative delay, the Commission has also PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). E:\FR\FM\19FEN1.SGM 19FEN1 Federal Register / Vol. 84, No. 33 / Tuesday, February 19, 2019 / Notices 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–2019–002 and should be submitted on or before March 12, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–02605 Filed 2–15–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85111; File No. SR– NASDAQ–2019–005] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Certain Rules of the Rule 7000A Series Concerning the Order Audit Trail System February 12, 2019. tkelley on DSKBCP9HB2PROD with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 1, 2019, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) 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 Exchange. 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 certain rules of the Rule 7000A Series concerning the Order Audit Trail System to make conforming and technical changes. The text of the proposed rule change is available on the Exchange’s website at https:// nasdaq.cchwallstreet.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 17:46 Feb 15, 2019 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to amend certain rules of the Rule 7000A Series concerning FINRA’s Order Audit Trail System (‘‘OATS’’) to make conforming and technical changes. The Exchange’s Rule 7000A Series imposes an obligation on Exchange members to record in electronic form and report to FINRA on a daily basis certain information with respect to orders originated, received, transmitted, modified, canceled, or executed by members in Nasdaq-listed stocks. OATS captures this order information and integrates it with quote and transaction information to create a time-sequenced record of orders, quotes, and transactions. This information is used by FINRA staff to conduct surveillance and investigations of members for potential violation of Exchange rules, federal securities laws, and FINRA rules. As such, the Exchange and its sister exchanges, Nasdaq BX, Inc. (‘‘BX’’) and Nasdaq PHLX LLC (‘‘PHLX’’), endeavor to keep their OATS rules consistent with FINRA’s OATS rules, as well as with each other’s. BX and PHLX recently updated and harmonized their respective OATS rules with those of the Exchange and FINRA. Through this process, several technical issues were identified with the Exchange’s OATS rules that require a rule change. This proposed rule change makes those changes.3 First, the Exchange is proposing to amend Rule 7410A, which defines terms used in the OATS rules. The Exchange is proposing to change the reference to the Rule 7400A Series immediately under the title of the Rule to instead 3 The Exchange is making a technical change to the rule numbering under the Rule 7000A Series to add a period after the individual rule numbers under the Series. 15 17 VerDate Sep<11>2014 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. Jkt 247001 PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 4883 reference the Rule 7000A Series, which is the correct citation. The Exchange is also proposing to amend the definition of ‘‘Nasdaq Market Center’’ under Rule 7410A(d). Nasdaq has a more comprehensive definition of the ‘‘Nasdaq Market Center’’ under Rule 4701(a). As a consequence, the Exchange is proposing to amend Rule 7410A(d) to note that the term ‘‘Nasdaq Market Center’’ has the same meaning as that term has under Rule 4701(a). The Exchange is adding an omitted hyphen to the term ‘‘over-the-counter’’ within the definition of ‘‘Electronic Communication Network.’’ The Exchange is also proposing to delete the defined term ‘‘NMS stock’’ from paragraph (j) of the rule, and re-letter the remaining rules accordingly. The term ‘‘NMS stock’’ is not used in Nasdaq’s OATS rules. The term is used in FINRA Rule 7410(k), defining ‘‘Order Audit Trail System, whereas the Exchange instead references Nasdaq listed securities under Rule 7410A(l). Moreover, neither BX nor PHLX defines the term in its respective OATS rules. Thus, the Exchange believes that the defined term is not needed for purposes of its OATS rules, and is accordingly deleting the definition and re-lettering the subparagraphs that follow. The Exchange is proposing to apply lower case letters to the term bona fide hedge transaction within the definition of ‘‘Order’’ under re-lettered paragraph (j). The Exchange notes that it currently capitalizes the term ‘‘Bona Fide Hedge Transaction’’ under the rule, although the term is not defined in Nasdaq’s rules. The Exchange believes that capitalizing the term was an error and is therefore not capitalizing the term in Rule 7410A(j). The Exchange notes that neither BX nor PHLX chose to capitalize the term for purposes of their [sic] OATS rules. The Exchange is proposing to move text within the definition of ‘‘Reporting Member’’ to conform it to how BX and PHLX present the subparagraphs within their definition of ‘‘Reporting Member’’ and ‘‘Reporting Member Organization,’’ respectively. Last, the Exchange is proposing to amend Rule 7410A(o) to cross-reference the definition of [sic] term ‘‘customer’’ under Rule 7410A(c) instead of crossreferencing the definition under Rule 0120(g), which is equivalent to the definition under Rule 7410A(c). Second, the Exchange is proposing to amend Rule 7440A to delete a sentence from Rule 7440A(a), which notes that members are complying with these rules by complying with the related FINRA rules 7440(a). The Exchange believes these sentences are duplicative of the E:\FR\FM\19FEN1.SGM 19FEN1

Agencies

[Federal Register Volume 84, Number 33 (Tuesday, February 19, 2019)]
[Notices]
[Pages 4880-4883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02605]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85108; File No. SR-CboeBZX-2019-002]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
To Amend the Exchange's Eighth Amended and Restated Bylaws (the 
``Exchange Bylaws'') the Fourth Amended and Restated Bylaws (the 
``Parent Bylaws'') of Its Parent Corporation, Cboe Global Markets, Inc. 
(``Cboe'' or the ``Parent'')

February 12, 2019.
    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 January 28, 2019, 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''

[[Page 4881]]

proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 
\3\ and Rule 19b-4(f)(6) thereunder.\4\ The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to 
amend the Exchange's Eighth Amended and Restated Bylaws (the ``Exchange 
Bylaws'') the Fourth Amended and Restated Bylaws (the ``Parent 
Bylaws'') of its parent corporation, Cboe Global Markets, Inc. 
(``Cboe'' or the ``Parent''). The text of the proposed amendments to 
the Exchange Bylaws is included in Exhibit 5A, and the text of the 
proposed amendments to the Parent Bylaws is included in Exhibit 5B.
    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 proposed rule change amends the Exchange Bylaws to (1) amend 
the provision regarding which offices may be held by the same person 
and (2) amend the description of the duties of President of the 
Exchange. The proposed rule change also amends the Parent Bylaws to (1) 
amend the description of the duties of President of the Parent, (2) 
amend language relating to the definition of ``director independence,'' 
and (3) make a non-substantive update to the zip code for the 
registered office the Corporation.
Offices Held by Same Person
    Section 5.1(b) of the Exchange Bylaws currently provides that two 
or more offices may be held by the same person, except the offices of 
Chief Executive Officer and President.\5\ The Exchange proposes to 
amend Section 5.1(b) of the Exchange Bylaws to eliminate this 
restriction, and thus permit the same person to hold the offices of 
Chief Executive Officer and President. This proposal will provide the 
Exchange with the flexibility to appoint the person or persons it deems 
qualified and appropriate to perform the duties of both Chief Executive 
Officer and the President.
---------------------------------------------------------------------------

    \5\ Section 5.1(b) also prohibits the Chief Executive Officer 
and President from also being the Secretary or Assistant Secretary, 
which prohibition the proposal does not substantively amend.
---------------------------------------------------------------------------

Description of President
    Section 5.3 of the Parent Bylaws and Section 5.3 of the Exchange 
Bylaws each provide that the President of the Parent or Exchange, as 
applicable, shall be the chief operating officer of the Parent or 
Exchange, as applicable. The Exchange proposes to amend Section 5.3 of 
each of the Parent Bylaws and Section 5.3 of the Exchange Bylaws to 
provide that the President of the Parent or Exchange, as applicable, 
may be the chief operating officer of the Parent or Exchange, as 
applicable. Pursuant to this proposed change, the President of the 
Parent or Exchange may also serve as the chief operating officer,\6\ 
but, rather than requiring that one individual serve in both 
capacities, Parent and the Exchange will each have flexibility to 
appoint the person or persons it deems qualified and appropriate to 
perform the duties of the President and duties of a chief operating 
officer. In either case, Parent and the Exchange each will have one or 
more persons performing the necessary duties of each role.
---------------------------------------------------------------------------

    \6\ This is consistent with the provision in each of the Parent 
Bylaws and Exchange Bylaws that provide that two or more offices may 
be held by the same person, subject to certain exceptions. See 
Section 5.1 of the Parent Bylaws and Section 5.1 of the Exchange 
Bylaws.
---------------------------------------------------------------------------

Definition of Director Independence
    Cboe recently determined to remove from listing its common stock, 
par value $0.01 per share (the ``Common Stock''), on the Nasdaq Stock 
Market LLC (``Nasdaq'') and to designate BZX as the primary listing 
venue for Parent's Common Stock, which became effective in September 
2018. In connection with the delisting and primary listing venue 
designation, the Exchange proposes to update certain corporate 
governance documents, including the Parent Bylaws. Particularly, the 
Exchange proposes to amend Section 3.3 of the Parent Bylaws to change 
the definition of director independence from referencing the listing 
standards of the New York Stock Exchange and Nasdaq to language 
referencing the listing standards of each national securities exchange 
on which the common stock of Parent is listed.
Registered Office Zip Code
    The Exchange proposes to amend Section 1.1 of the Parent Bylaws to 
update the zip code of the Parent's registered agent from 19805 to 
19801. This change is in accordance with an update from the U.S. Postal 
Service.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\7\ Specifically, the Exchange believes the proposed rule change is 
consistent with Section 6(b)(1) of the Act,\8\ which provides that the 
Exchange be organized and have the capacity to be able to carry out the 
purposes of the Act and to enforce compliance by the Exchange's Trading 
Permit Holders and persons associated with its Trading Permit Holders 
with the Act, the rules and regulations thereunder, and the rules of 
the Exchange.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(1).
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    In particular, the Exchange believes the proposed changes are not 
material and will have a de minimis impact on the governance, 
ownership, or operations of the Exchange.
    The proposed rule change to permit the same person to hold the 
offices of Chief Executive Officer and President of the Exchange will 
enable the Exchange to continue to be organized and have the capacity 
to be able to carry out the purposes of the Act, because it will 
provide the Exchange with flexibility to appoint the person or persons 
it deems qualified and appropriate to perform the duties of both Chief 
Executive Officer and the President. The Exchange will continue to have 
a Chief Executive Officer and President--the proposed change merely 
permits a single person rather than multiple people to hold these 
offices. This will ensure continued orderly operation of the Exchange 
in a

[[Page 4882]]

manner the Exchange deems most appropriate.\9\
---------------------------------------------------------------------------

    \9\ The proposed change also conforms this provision to the 
corresponding provision in Parent's Bylaws. See Section 5.1 of 
Parent's Bylaws.
---------------------------------------------------------------------------

    The proposed rule change to permit each of Parent and the Exchange 
to appoint different persons to serve as President and chief operating 
officer of each entity will enable the Exchange to continue to be 
organized and have the capacity to be able to carry out the purposes of 
the Act, because it will provide each entity with flexibility to 
appoint the person or persons it deems qualified and appropriate to 
perform the duties of President and a chief operating officer. Parent 
and the Exchange each will continue to have the necessary duties of 
each role performed--the proposed change merely permits multiple people 
rather than a single person to perform these duties. This will ensure 
continued orderly operation of the Exchange in a manner Parent and the 
Exchange deem most appropriate.
    The Exchange believes in light of the delisting of Parent's Common 
Stock from Nasdaq, it is appropriate to remove the requirement to 
comply with the independence requirements contained in the listing 
standards of Nasdaq, as well as the independence requirements contained 
in the listing standards of NYSE. The Exchange notes that the 
independence requirements of BZX are substantially similar to the 
independence requirements contained in the listing standards of Nasdaq 
and NYSE.
    The Exchange believes that by ensuring its parent company's 
governance documents accurately reflect the correct legal address of 
Parent's registered office, the proposed rule change would reduce 
potential investor or market participant confusion.

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. The proposed rule change is 
not intended to address competitive issues but rather is concerned 
solely with updating the Parent Bylaws and Exchange Bylaws to reflect 
the changes described above.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) by its terms, become 
operative prior to 30 days from the date on which it was filed, or such 
shorter time as the Commission may designate, if consistent with the 
protection of investors and the public interest, the proposed rule 
change has become effective pursuant to Section 19(b)(3)(A) of the Act 
and Rule 19b-4(f)(6) thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6),\13\ 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 proposal may 
become operative upon filing. The Exchange states that the proposed 
changes relating to the ability of the same person to hold multiple 
officer titles and the amended independence requirements are consistent 
with other national securities exchanges and will enable the Exchange 
to continue to be organized and have the capacity to be able to carry 
out the purposes of the Act, including protecting investors and the 
public interest. Further, the proposed change of updating the zip code 
of the Parent's registered office does not raise any regulatory issues. 
For the foregoing reasons, the Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and 
the public interest and, therefore, the Commission designates the 
proposed rule change to be operative upon filing.\14\
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    \12\ Id.
    \13\ Id.
    \14\ 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 will 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 rule-comments@sec.gov. Please include 
File Number SR-CboeBZX-2019-002 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-2019-002. 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

[[Page 4883]]

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-2019-002 and should 
be submitted on or before March 12, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-02605 Filed 2-15-19; 8:45 am]
 BILLING CODE 8011-01-P
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