Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend Its Financial Incentive Program for Lead Market-Makers Appointed in MSCI EAFE Index (MXEA) Options and MSCI Emerging Markets Index (MXEF) Options, 4878-4880 [2019-02611]

Download as PDF 4878 Federal Register / Vol. 84, No. 33 / Tuesday, February 19, 2019 / Notices IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing. 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 e-mail to rule-comments@ sec.gov. Please include File Number 4– 551 on the subject line. tkelley on DSKBCP9HB2PROD with NOTICES 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 4–551. 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 plan that are filed with the Commission, and all written communications relating to the proposed plan 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 plan also will be available for inspection and copying at the principal offices of NYSE American, BZX, C2, Cboe, EDGX, Gemini, ISE, Mercury, FINRA, Arca, Nasdaq, BOX, BX, PHLX, MIAX, MIAX PEARL, and MIAX Emerald. 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 4–551 and should be submitted on or before March 12, 2019. V. Discussion The Commission continues to believe that the Plan, as proposed to be amended, is an achievement in cooperation among the SRO participants. The Plan, as amended, will VerDate Sep<11>2014 17:46 Feb 15, 2019 Jkt 247001 reduce unnecessary regulatory duplication by allocating to the designated SRO the responsibility for certain options-related market surveillance matters that would otherwise be performed by multiple SROs. The Plan promotes efficiency by reducing costs to firms that are members of more than one of the SRO participants. In addition, because the SRO participants coordinate their regulatory functions in accordance with the Plan, the Plan promotes, and will continue to promote, investor protection. Under paragraph (c) of Rule 17d–2, the Commission may, after appropriate notice and comment, declare a plan, or any part of a plan, effective. In this instance, the Commission believes that appropriate notice and comment can take place after the proposed amendment is effective. The primary purpose of the amendment is to add MIAX Emerald as a Participant and to reflect the name changes of certain Participating Organizations. By declaring it effective today, the amended Plan can become effective and be implemented without undue delay.21 In addition, the Commission notes that the prior version of this Plan was published for comment, and the Commission did not receive any comments thereon.22 Finally, the Commission does not believe that the amendment to the Plan raises any new regulatory issues that the Commission has not previously considered. VI. Conclusion This order gives effect to the amended Plan submitted to the Commission that is contained in File No. 4–551. It is therefore ordered, pursuant to Section 17(d) of the Act, that the Plan, as amended by and between NYSE American, BZX, C2, Cboe, EDGX, Gemini, ISE, Mercury, FINRA, Arca, Nasdaq, BOX, BX, PHLX, MIAX, MIAX PEARL, and MIAX Emerald filed with the Commission pursuant to Rule 17d2 on January 8, 2019 is hereby approved and declared effective. It is further ordered that those SRO participants that are not the DOSR as to a particular common member are relieved of those regulatory responsibilities allocated to the common member’s DOSR under the amended Plan to the extent of such allocation. 21 On December 20, 2018, the Commission approved MIAX Emerald’s application for registration as a national securities exchange. See Securities Exchange Act Release No. 84891, 83 FR 67421 (December 28, 2018). 22 See Securities Exchange Act Release No. 79930 (February 2, 2017), 82 FR 9807 (February 8, 2017) (File No. 4–551). PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–02595 Filed 2–15–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85114; File No. SR–CBOE– 2019–006] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend Its Financial Incentive Program for Lead Market-Makers Appointed in MSCI EAFE Index (MXEA) Options and MSCI Emerging Markets Index (MXEF) Options 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 February 1, 2019, Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III 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 Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) proposes to amend its financial incentive program for Lead Market-Makers appointed in MSCI EAFE Index (MXEA) options and MSCI Emerging Markets Index (MXEF) options. 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. 23 17 CFR 200.30–3(a)(34). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\19FEN1.SGM 19FEN1 Federal Register / Vol. 84, No. 33 / Tuesday, February 19, 2019 / Notices 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 tkelley on DSKBCP9HB2PROD with NOTICES 1. Purpose The Exchange proposes to amend its Fees Schedule to amend its financial incentive program for Lead MarketMakers (‘‘LMMs’’) appointed in MSCI EAFE Index (MXEA) options and MSCI Emerging Markets Index (MXEF) options (collectively, MSCI options), effective February 1, 2019. By way of background, the Exchange recently adopted a program which provided through December 31, 2018, a financial incentive to any Market-Maker that was appointed as a LMM in MXEA and/or MXEF (‘‘MSCI LMM’’) and met a heightened quoting standard, which is set forth in the Fees Schedule.3 MSCI LMM(s) that meet the heightened quoting standard, receive $20,000 per month/per product. The LMM receives $20,000 per month/per class if it provides continuous electronic quotes that meet or exceed a the heightened quoting standard set forth in the Fees Schedule in at least 90% of the MXEA and/or MXEF series it must quote pursuant to Rule 8.15(b) 90% of the time in a given month. The Exchange first proposes to renew the MSCI program. Particularly, as noted above, the Fees Schedule currently provides that LMM(s) appointed in MXEA and MXEF will receive a payment of $20,000 per class when they meet prescribed heightened quoting standards in a given month and provides that the program will be in place through December 31, 2018. In order to continue to encourage LMM(s) in MXEA and MXEF to provide significant liquidity in these options, the Exchange proposes to renew this program through June 30, 2019. Next, the Exchange proposes to increase the payment per class for the month of February 2019. Specifically, the Exchange proposes to provide that LMM(s) appointed in MXEA and MXEF will receive a payment of $40,000 per class when it meets prescribed heightened quoting standards in the month of February 2019. For the months of March 2019 through June 2019, the payment would be $20,000 per class per month. Lastly, the Exchange proposes to amend the program to reduce the amount of time a MSCI LMM needs to quote. Particularly, the Exchange proposes to provide that in order to receive the financial benefit, a MSCI LMM must meet the heightened quoting standard set forth in the Fees Schedule in at least 90% of the MXEA and/or MXEF series it must quote pursuant to Rule 8.15(b) 80% of the time in a given month (instead of 90% of the time in a given month). Particularly, the Exchange notes that if there is extreme volatility in the market during a given month, it may become more difficult for a MSCI LMM to satisfy the heightened quoting standard for 90% of the time in that given month. As such, the Exchange proposes to provide the LMM more flexibility by slightly reducing the amount of time it must meet the heightened quoting standard. The Exchange believes the proposed change is still commensurate with the financial benefit offered and that the MSCI LMM financial program still encourages a MSCI LMM to provide significant liquidity in MSCI options. 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.4 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 5 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 Section 6(b)(4) of the Act,6 which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its Trading Permit Holders and other persons using its facilities. First, the Exchange believes that it is reasonable, equitable and not unfairly discriminatory to renew the compensation plan for LMM(s) appointed in MXEA and MXEF because the Exchange wants to ensure it continues incentivizing the LMM(s) in these products to provide liquid and active markets in these products to encourage its growth. The Exchange notes that it had anticipated extending the MSCI Program for the month of January 2019 as well, but due to the government shutdown, was unexpectedly unable to do so.7 The Exchange also notes that the current MSCI LMM met the heightened quoting standard for January 2019, but because the Exchange was unable to extend the program as anticipated, the LMM will not be receiving a payment under the program for the month of January. In light of not being able to compensate the LMM for the month of January, notwithstanding the LMM’s continued commitment to providing liquid and active markets in the MSCI products, the Exchange believes it’s reasonable to offer a payment of $40,000 per class to the MSCI LMM for the month of February 2019, provided it meets the heightened quoting standard for February 2019. The Exchange believes it is equitable and not unfairly discriminatory to only offer this financial incentive to the MSCI LMM because it benefits all market participants trading in MSCI options to encourage the MSCI LMM to satisfy the heightened quoting standard, which may increase liquidity and provide more trading opportunities and tighter spreads. Indeed, the Exchange notes that the LMM provides a crucial role in providing quotes and the opportunity for market participants to trade MSCI products, which can lead to increased volume, thereby providing a robust market. The Exchange also notes that the MSCI LMM may have added costs each month that it needs to undertake in order to satisfy that heightened quoting standard (e.g., having to purchase additional bandwidth). The Exchange believes the proposed change to reduce the quoting time 6 15 U.S.C. 78f(b)(4). Cboe Options Notice, ‘‘Cboe Options Exchange Fee Schedule Changes Effective January 2, 2019’’ Reference ID: C2018122000. 7 See 3 MSCI LMMs serve as MSCI LMMs during the RTH session only. VerDate Sep<11>2014 17:46 Feb 15, 2019 Jkt 247001 4 15 5 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00117 Fmt 4703 Sfmt 4703 4879 E:\FR\FM\19FEN1.SGM 19FEN1 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

Agencies

[Federal Register Volume 84, Number 33 (Tuesday, February 19, 2019)]
[Notices]
[Pages 4878-4880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02611]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85114; File No. SR-CBOE-2019-006]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
To Amend Its Financial Incentive Program for Lead Market-Makers 
Appointed in MSCI EAFE Index (MXEA) Options and MSCI Emerging Markets 
Index (MXEF) Options

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 February 1, 2019, Cboe Exchange, Inc. (the ``Exchange'' or 
``Cboe Options'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II, and III 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend its financial incentive program for Lead Market-Makers 
appointed in MSCI EAFE Index (MXEA) options and MSCI Emerging Markets 
Index (MXEF) options. 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.

[[Page 4879]]

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 its Fees Schedule to amend its 
financial incentive program for Lead Market-Makers (``LMMs'') appointed 
in MSCI EAFE Index (MXEA) options and MSCI Emerging Markets Index 
(MXEF) options (collectively, MSCI options), effective February 1, 
2019. By way of background, the Exchange recently adopted a program 
which provided through December 31, 2018, a financial incentive to any 
Market-Maker that was appointed as a LMM in MXEA and/or MXEF (``MSCI 
LMM'') and met a heightened quoting standard, which is set forth in the 
Fees Schedule.\3\ MSCI LMM(s) that meet the heightened quoting 
standard, receive $20,000 per month/per product. The LMM receives 
$20,000 per month/per class if it provides continuous electronic quotes 
that meet or exceed a the heightened quoting standard set forth in the 
Fees Schedule in at least 90% of the MXEA and/or MXEF series it must 
quote pursuant to Rule 8.15(b) 90% of the time in a given month.
---------------------------------------------------------------------------

    \3\ MSCI LMMs serve as MSCI LMMs during the RTH session only.
---------------------------------------------------------------------------

    The Exchange first proposes to renew the MSCI program. 
Particularly, as noted above, the Fees Schedule currently provides that 
LMM(s) appointed in MXEA and MXEF will receive a payment of $20,000 per 
class when they meet prescribed heightened quoting standards in a given 
month and provides that the program will be in place through December 
31, 2018. In order to continue to encourage LMM(s) in MXEA and MXEF to 
provide significant liquidity in these options, the Exchange proposes 
to renew this program through June 30, 2019.
    Next, the Exchange proposes to increase the payment per class for 
the month of February 2019. Specifically, the Exchange proposes to 
provide that LMM(s) appointed in MXEA and MXEF will receive a payment 
of $40,000 per class when it meets prescribed heightened quoting 
standards in the month of February 2019. For the months of March 2019 
through June 2019, the payment would be $20,000 per class per month.
    Lastly, the Exchange proposes to amend the program to reduce the 
amount of time a MSCI LMM needs to quote. Particularly, the Exchange 
proposes to provide that in order to receive the financial benefit, a 
MSCI LMM must meet the heightened quoting standard set forth in the 
Fees Schedule in at least 90% of the MXEA and/or MXEF series it must 
quote pursuant to Rule 8.15(b) 80% of the time in a given month 
(instead of 90% of the time in a given month). Particularly, the 
Exchange notes that if there is extreme volatility in the market during 
a given month, it may become more difficult for a MSCI LMM to satisfy 
the heightened quoting standard for 90% of the time in that given 
month. As such, the Exchange proposes to provide the LMM more 
flexibility by slightly reducing the amount of time it must meet the 
heightened quoting standard. The Exchange believes the proposed change 
is still commensurate with the financial benefit offered and that the 
MSCI LMM financial program still encourages a MSCI LMM to provide 
significant liquidity in MSCI options.
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.\4\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \5\ 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 
Section 6(b)(4) of the Act,\6\ which requires that Exchange rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its Trading Permit Holders and other persons using 
its facilities.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    First, the Exchange believes that it is reasonable, equitable and 
not unfairly discriminatory to renew the compensation plan for LMM(s) 
appointed in MXEA and MXEF because the Exchange wants to ensure it 
continues incentivizing the LMM(s) in these products to provide liquid 
and active markets in these products to encourage its growth. The 
Exchange notes that it had anticipated extending the MSCI Program for 
the month of January 2019 as well, but due to the government shutdown, 
was unexpectedly unable to do so.\7\ The Exchange also notes that the 
current MSCI LMM met the heightened quoting standard for January 2019, 
but because the Exchange was unable to extend the program as 
anticipated, the LMM will not be receiving a payment under the program 
for the month of January. In light of not being able to compensate the 
LMM for the month of January, notwithstanding the LMM's continued 
commitment to providing liquid and active markets in the MSCI products, 
the Exchange believes it's reasonable to offer a payment of $40,000 per 
class to the MSCI LMM for the month of February 2019, provided it meets 
the heightened quoting standard for February 2019. The Exchange 
believes it is equitable and not unfairly discriminatory to only offer 
this financial incentive to the MSCI LMM because it benefits all market 
participants trading in MSCI options to encourage the MSCI LMM to 
satisfy the heightened quoting standard, which may increase liquidity 
and provide more trading opportunities and tighter spreads. Indeed, the 
Exchange notes that the LMM provides a crucial role in providing quotes 
and the opportunity for market participants to trade MSCI products, 
which can lead to increased volume, thereby providing a robust market. 
The Exchange also notes that the MSCI LMM may have added costs each 
month that it needs to undertake in order to satisfy that heightened 
quoting standard (e.g., having to purchase additional bandwidth).
---------------------------------------------------------------------------

    \7\ See Cboe Options Notice, ``Cboe Options Exchange Fee 
Schedule Changes Effective January 2, 2019'' Reference ID: 
C2018122000.
---------------------------------------------------------------------------

    The Exchange believes the proposed change to reduce the quoting 
time

[[Page 4880]]

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.

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.

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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-02611 Filed 2-15-19; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.