Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Cboe Order Routing Subsidy Program (“ORS”) and Complex Order Routing Subsidy Program (“CORS”) To Exclude Subsidy Payments for Contracts Executed as Qualified Contingent Cross (“QCC”) Orders, 5517-5519 [2019-02902]
Download as PDF
Federal Register / Vol. 84, No. 35 / Thursday, February 21, 2019 / Notices
amozie on DSK3GDR082PROD with NOTICES1
codes. The Exchange believes that
specifying the routing strategies to
which this fee code would be applied
will increase transparency around the
pricing for orders routed using
Exchange provided routing strategies.
With this change, only a limited number
of routing strategies would be subject to
a higher default routing fee. The
Exchange believes that it is reasonable
and equitable to limit its pass through
rebates to specified routing strategies
where the Exchange has determined to
offer such pricing as an inducement for
members to utilize such strategies. The
Exchange’s routing functionality is
offered on a purely voluntary basis and
members that utilize routing strategies
that are not subject to such an incentive
are free to route their orders directly to
EDGA, or to use other routing strategies
where the Exchange has determined to
provide pass through rebates.
Finally, the Exchange believes that
the proposed changes are equitable and
not unfairly discriminatory as the
proposed fees and rebates would apply
equally to all members that use the
Exchange to route orders using the
associated routing strategy. The
proposed fees are designed to reflect the
fees charged and rebates offered by
certain away trading centers that are
accessed by Exchange routing strategies,
and are being made in conjunction with
changes to the System routing table
designed to provide members with low
cost executions for their routable order
flow. Furthermore, if members do not
favor the proposed pricing, they can
send their routable orders directly to
away markets instead of using routing
functionality provided by the Exchange.
Routing through the Exchange is
voluntary, and the Exchange operates in
a competitive environment where
market participants can readily direct
order flow to competing venues or
providers of routing services if they
deem fee levels to be excessive.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
The proposed routing fee changes are
designed to reflect changes being made
to the System routing table used to
determine where to send certain
routable orders, and generally provide
better pricing to members for orders
routed to low cost protected market
centers using the Exchange’s routing
strategies. The Exchange operates in a
highly competitive market in which
market participants can readily direct
VerDate Sep<11>2014
17:08 Feb 20, 2019
Jkt 247001
their order flow to competing venues. In
such an environment, the Exchange
must continually review, and consider
adjusting, its fees and rebates to remain
competitive with other exchanges. For
the reasons described above, the
Exchange believes that the proposed fee
changes reflect this competitive
environment.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
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 13 and paragraph (f) of Rule
19b–4 14 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–
CboeEDGX–2019–004 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–CboeEDGX–2019–004. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
13 15
14 17
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
Frm 00114
Fmt 4703
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 this
filing will also 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–CboeEDGX–2019–004 and
should be submitted on or before March
14, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–02890 Filed 2–20–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85141; File No. SR–CBOE–
2019–008]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Cboe
Order Routing Subsidy Program
(‘‘ORS’’) and Complex Order Routing
Subsidy Program (‘‘CORS’’) To Exclude
Subsidy Payments for Contracts
Executed as Qualified Contingent
Cross (‘‘QCC’’) Orders
February 14, 2019.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
15 17
Sfmt 4703
5517
E:\FR\FM\21FEN1.SGM
CFR 200.30–3(a)(12).
21FEN1
5518
Federal Register / Vol. 84, No. 35 / Thursday, February 21, 2019 / Notices
‘‘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
the Cboe Order Routing Subsidy
Program (‘‘ORS’’) and Complex Order
Routing Subsidy Program (‘‘CORS’’) to
exclude subsidy payments for contracts
executed as Qualified Contingent Cross
(‘‘QCC’’) orders. 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/CBOELegalRegulatory
Home.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.
amozie on DSK3GDR082PROD with NOTICES1
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
ORS and CORS Programs (collectively
‘‘Programs’’) by eliminating the payment
of subsidies for contracts executed as
QCC orders. Currently, the ORS and
CORS Programs allow the Exchange to
enter into subsidy arrangements with
any Cboe Trading Permit Holder
(‘‘TPH’’) (each, a ‘‘Participating TPH’’)
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
VerDate Sep<11>2014
17:08 Feb 20, 2019
Jkt 247001
or Non-Cboe TPH broker-dealer (each a
‘‘Participating Non-Cboe TPH’’) that
meet certain criteria and provide certain
order routing functionalities to other
TPHs, Non-Cboe TPHs and/or use such
functionalities themselves.3
Participating TPHs or Participating NonCboe TPHs in the ORS and CORS
Programs (the ‘‘Participants’’) receive a
payment from the Exchange for every
executed contract routed to the
Exchange through their system in all
classes excluding classes in Underlying
Symbols List A, Sector Indexes, DJX,
MXEA, MXEF, XSP and XSPAM.
Additionally, Participants do not
receive payment for contracts executed
in the Automated Improvement
Mechanism (‘‘AIM’’),4 as contracts that
execute via AIM already have an
opportunity to earn various rebates and
discounts. Similarly, contracts executed
as QCC orders also have other
opportunities to earn various rebates
and discounts.5 Therefore, the Exchange
proposes to expressly exclude contracts
executed as QCC orders from the ORS
and CORS Programs’ payment of
subsidies.
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.6 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 7 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
3 See Cboe Fees Schedule, ‘‘Order Router Subsidy
Program’’ and ‘‘Complex Order Router Subsidy
Program’’ tables for more details on the ORS and
CORS Programs.
4 See Securities and Exchange Act Release 34–
73354 (October 15, 2015) 79 FR 62988 (October 21,
2014) (SR–CBOE–2014–075) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
To Amend the CBOE Order Routing Subsidy
Program and the Complex Order Routing Subsidy
Program).
5 See e.g., Cboe Fees Schedule, ‘‘QCC Rate Table’’,
which provides a $0.10 per contract credit to the
initiating side of a non-customer QCC transaction
and ‘‘ETF and ETN Options Rate Table’’ Footnote
8, which provides that the Exchange will waive the
transaction fee for public customer orders in all ETF
and ETN options that are executed, among other
order types, as a QCC.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00115
Fmt 4703
Sfmt 4703
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) 8 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange believes
the proposed change to the ORS and
CORS Programs to expressly exclude
contracts executed as QCC orders from
the Programs’ payment of subsidies is
reasonable as Participants will merely
no longer receive a subsidy for QCC
orders. The Exchange notes that AIM
orders also are not eligible to receive a
subsidy under the Programs. The
Exchange believes it is equitable and not
unfairly discriminatory to exclude QCC
trades from both Programs because, like
AIM orders, orders executed as a QCC
already have an opportunity to earn
various rebates or discounts.9 Lastly, the
Exchange believes that the proposed
change is equitable and not unfairly
discriminatory because the change is
applicable to all Participants and any
Cboe TPH or broker-dealer that is not a
Cboe TPH may continue to avail itself
of the arrangements under the Programs,
provided that their routing functionality
incorporates the respective
requirements of each Program.
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
Exchange does not believe that the
proposed change will impose an
unnecessary burden on intramarket
competition because it will apply
equally to all Participants in the
Programs. Although the subsidy for
orders routed to the Exchange through
a Participant’s system only applies to
Participants of the Programs, the
subsidies are designed to encourage the
sending of more orders to the Exchange,
which should provide greater liquidity
and trading opportunities for all market
participants. Further, the Exchange does
not believe that such change will
impose any burden on intermarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act. The Exchange notes
that excluding an order type from
eligibility for a subsidy under the Cboe
Fee Schedule does not pose any
8 Id.
9 See
E:\FR\FM\21FEN1.SGM
supra note 5.
21FEN1
Federal Register / Vol. 84, No. 35 / Thursday, February 21, 2019 / Notices
competitive advantages over other
exchanges. Further, the proposed
changes only affect trading on the
Exchange. 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 10 and paragraph (f) of Rule
19b–4 11 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:
amozie on DSK3GDR082PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2019–008 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–2019–008. 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–2019–008 and
should be submitted on or before March
14, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–02902 Filed 2–20–19; 8:45 am]
BILLING CODE 8011–01–P
U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f).
VerDate Sep<11>2014
17:08 Feb 20, 2019
Jkt 247001
‘‘Exchange’’ or ‘‘NYSE National’’) 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 self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to amend
Rule 7.31 relating to the Minimum
Trade Size Modifier. The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85144; File No. SR–
NYSENAT–2019–02]
Self-Regulatory Organizations; NYSE
National, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 7.31
Relating to the Minimum Trade Size
Modifier
February 14, 2019.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’),2 and Rule 19b–4 thereunder,3
notice is hereby given that on February
6, 2019, NYSE National, Inc. (the
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
The Exchange proposes to amend
Rule 7.31 relating to the Minimum
Trade Size (‘‘MTS’’) Modifier.
Specifically, the Exchange proposes to
make the MTS Modifier available for
Non-Displayed Limit Orders.4 The
Exchange also proposes to provide
additional optionality for ETP Holders
using the MTS Modifier with Limit IOC
Orders, Non-Displayed Limit Orders,
Midpoint Liquidity (‘‘MPL’’) Orders,
and Tracking Orders. As proposed, ETP
Holders could choose how such orders
would trade on arrival to trade either
with (i) orders that in the aggregate meet
the MTS (current functionality), or (ii)
individual orders that each meet the
MTS (proposed functionality).
12 17
1 15
10 15
5519
PO 00000
Frm 00116
Fmt 4703
Sfmt 4703
4 See Rule 7.31(d)(2). In sum, A Non-Displayed
Limit Order is a Limit Order that is not displayed
and does not route. Id.
E:\FR\FM\21FEN1.SGM
21FEN1
Agencies
[Federal Register Volume 84, Number 35 (Thursday, February 21, 2019)]
[Notices]
[Pages 5517-5519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02902]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85141; File No. SR-CBOE-2019-008]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Cboe Order Routing Subsidy Program (``ORS'') and Complex Order
Routing Subsidy Program (``CORS'') To Exclude Subsidy Payments for
Contracts Executed as Qualified Contingent Cross (``QCC'') Orders
February 14, 2019.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the
[[Page 5518]]
``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 the Cboe Order Routing Subsidy Program (``ORS'') and Complex
Order Routing Subsidy Program (``CORS'') to exclude subsidy payments
for contracts executed as Qualified Contingent Cross (``QCC'') orders.
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 its ORS and CORS Programs
(collectively ``Programs'') by eliminating the payment of subsidies for
contracts executed as QCC orders. Currently, the ORS and CORS Programs
allow the Exchange to enter into subsidy arrangements with any Cboe
Trading Permit Holder (``TPH'') (each, a ``Participating TPH'') or Non-
Cboe TPH broker-dealer (each a ``Participating Non-Cboe TPH'') that
meet certain criteria and provide certain order routing functionalities
to other TPHs, Non-Cboe TPHs and/or use such functionalities
themselves.\3\ Participating TPHs or Participating Non-Cboe TPHs in the
ORS and CORS Programs (the ``Participants'') receive a payment from the
Exchange for every executed contract routed to the Exchange through
their system in all classes excluding classes in Underlying Symbols
List A, Sector Indexes, DJX, MXEA, MXEF, XSP and XSPAM. Additionally,
Participants do not receive payment for contracts executed in the
Automated Improvement Mechanism (``AIM''),\4\ as contracts that execute
via AIM already have an opportunity to earn various rebates and
discounts. Similarly, contracts executed as QCC orders also have other
opportunities to earn various rebates and discounts.\5\ Therefore, the
Exchange proposes to expressly exclude contracts executed as QCC orders
from the ORS and CORS Programs' payment of subsidies.
---------------------------------------------------------------------------
\3\ See Cboe Fees Schedule, ``Order Router Subsidy Program'' and
``Complex Order Router Subsidy Program'' tables for more details on
the ORS and CORS Programs.
\4\ See Securities and Exchange Act Release 34-73354 (October
15, 2015) 79 FR 62988 (October 21, 2014) (SR-CBOE-2014-075) (Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the CBOE Order Routing Subsidy Program and the Complex Order
Routing Subsidy Program).
\5\ See e.g., Cboe Fees Schedule, ``QCC Rate Table'', which
provides a $0.10 per contract credit to the initiating side of a
non-customer QCC transaction and ``ETF and ETN Options Rate Table''
Footnote 8, which provides that the Exchange will waive the
transaction fee for public customer orders in all ETF and ETN
options that are executed, among other order types, as a QCC.
---------------------------------------------------------------------------
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.\6\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ 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) \8\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
---------------------------------------------------------------------------
In particular, the Exchange believes the proposed change to the ORS
and CORS Programs to expressly exclude contracts executed as QCC orders
from the Programs' payment of subsidies is reasonable as Participants
will merely no longer receive a subsidy for QCC orders. The Exchange
notes that AIM orders also are not eligible to receive a subsidy under
the Programs. The Exchange believes it is equitable and not unfairly
discriminatory to exclude QCC trades from both Programs because, like
AIM orders, orders executed as a QCC already have an opportunity to
earn various rebates or discounts.\9\ Lastly, the Exchange believes
that the proposed change is equitable and not unfairly discriminatory
because the change is applicable to all Participants and any Cboe TPH
or broker-dealer that is not a Cboe TPH may continue to avail itself of
the arrangements under the Programs, provided that their routing
functionality incorporates the respective requirements of each Program.
---------------------------------------------------------------------------
\9\ See supra note 5.
---------------------------------------------------------------------------
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 Exchange does not
believe that the proposed change will impose an unnecessary burden on
intramarket competition because it will apply equally to all
Participants in the Programs. Although the subsidy for orders routed to
the Exchange through a Participant's system only applies to
Participants of the Programs, the subsidies are designed to encourage
the sending of more orders to the Exchange, which should provide
greater liquidity and trading opportunities for all market
participants. Further, the Exchange does not believe that such change
will impose any burden on intermarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act. The Exchange
notes that excluding an order type from eligibility for a subsidy under
the Cboe Fee Schedule does not pose any
[[Page 5519]]
competitive advantages over other exchanges. Further, the proposed
changes only affect trading on the Exchange. 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 \10\ and paragraph (f) of Rule 19b-4 \11\
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.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f).
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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-2019-008 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-2019-008. 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-2019-008 and should be submitted on
or before March 14, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-02902 Filed 2-20-19; 8:45 am]
BILLING CODE 8011-01-P