Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Cboe Options Rule 6.2, 12308-12310 [2019-06177]
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Federal Register / Vol. 84, No. 62 / Monday, April 1, 2019 / Notices
A proposed rule change filed under
Rule 19b–4(f)(6) 10 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),11 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. The change will correct
erroneous information contained in the
Quarterly Replacement Filing 12
regarding six-month lookback the
Exchange will use to determine which
issues will added in April 2019.13
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 14 of the Act 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–
NYSEARCA–2019–17 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.
10 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
12 See supra note 4.
13 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
14 15 U.S.C. 78s(b)(2)(B).
11 17
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All submissions should refer to File
Number SR–NYSEARCA–2019–17. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEARCA–2019–17 and
should be submitted on or before April
22, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–06181 Filed 3–29–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Release No. 34–85419; File No. SR–
CBOE–2019–016]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Cboe Options
Rule 6.2
March 26, 2019.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
15 17
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CFR 200.30–3(a)(12).
Frm 00119
Fmt 4703
Sfmt 4703
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 14,
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 and II below, which Items have
been prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ 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 Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to amend
Cboe Options Rule 6.2. 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 update
Interpretation and Policy .06 of Rule 6.2
(Hybrid Opening (and Sometimes
Closing) System (‘‘HOSS’’)). By way of
background, Interpretation and Policy
.06(a) of Rule 6.2 provides that on the
last business day of each month, the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
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Federal Register / Vol. 84, No. 62 / Monday, April 1, 2019 / Notices
Exchange will conduct special end-ofmonth non-trading rotations for each
series of SPX options in order to
determine the theoretical ‘‘fair value’’ of
such series as of [sic] SPX as of the time
of close of trading in the underlying
cash market.5 Rule 6.2(.06)(a) also
provides during such special nontrading closing rotation (‘‘closing
rotation’’), a Lead Market-Maker
(‘‘LMM’’) in the SPX options designated
by the Exchange in each series of SPX
options will provide bid and offer
quotations. The Exchange notes that in
connection with recently retiring the
Hybrid 3.0 platform and transitioning
trading of SPX options onto the Hybrid
trading platform, the Exchange
determined to no longer appoint LMMs
in SPX.6 In lieu of LMMs, the Exchange
established a financial incentive
program for SPX Select Market-Makers
(‘‘SMMs’’), which provides that any
appointed SPX SMM will receive a
monthly waiver of the cost of one
Market-Maker Trading Permit and one
SPX Tier Appointment provided that
the SMM satisfies the standard set forth
in Footnote 49 of the Exchange’s Fees
Schedule. While SMMs must still
comply with continuous quoting
obligations of Market-Makers, they are
not otherwise obligated from a
regulatory standpoint to satisfy any
heightened quoting standard or meet
additional obligations. Rather, SPX
SMMs only receive a financial benefit
(i.e., waiver of fees otherwise assessed
for one Market-Maker Trading Permit
and one SPX Tier Appointment) if they
satisfy the standard set forth in Footnote
49. Accordingly, the Exchange proposes
to add references to SMMs in Rule
6.2(.06)(a).
Additionally, the Exchange proposes
to clarify that SMMs (and LMMs) 7
‘‘may’’, and not ‘‘must’’, participate in
the closing rotation. Indeed, the
Exchange notes that it recently
submitted a rule change to amend the
Fees Schedule to no longer require
SMMs to meet the fourth prong of the
standard set forth in Footnote 49 which
provided that a designated SMM must
provide quotes for the closing rotation
on a rotating basis in order for SMMs to
5 See Cboe Options Rule 6.2, Interpretation and
Policy .06.(a) [sic]
6 See Securities and Exchange Act Release No.
83089 (April 23, 2018), 83 FR 18605 (April 27,
2018) (SR–CBOE–2018–029).
7 As noted above, as there are no LMMs currently
appointed in SPX during Regular Trading Hours,
there is no requirement for LMMs to participate in
the closing rotation. To the extent the Exchange
determines to appoint LMMs in the future, it notes
that LMMs would no longer be obligated to
participate in the closing rotation.
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satisfy the fourth prong.8 In its place,
the Exchange now requires that within
30 minutes from the initiation of the
closing rotation, the Exchange must
disseminate end-of-month closing
quotations pursuant to Cboe Options
Rule 6.2(.06)(a). The Exchange proposed
the amendment to encourage all SMMs
to provide end-of-month non-trading
settlement pricing quotations in SPX
and SPXW, which would increase the
probability that the Exchange would be
able to disseminate fair value quotes
pursuant to Rule 6.2(.06)(a).9 The
Exchange believes the proposed changes
to Rule 6.2(.06)(a) will make the rule
text consistent with the current standard
set forth in Footnote 49 of the Fees
Schedule. The Exchange lastly notes
that although it currently does not
appoint LMMs in SPX, it proposes to
leave references to LMMs in Rule
6.2(.06)(a) in the event it determines to
appoint LMMs in the future.
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.10 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 11 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.
The Exchange believes updating Rule
6.2(.06)(a) with respect to references to
SMMs and eliminating the language
which provides the Exchange will
designate a particular LMM each month,
alleviates potential confusion as it more
accurately describes the Exchange’s
current end-of-month fair value closing
rotation procedures. The proposed
changes also make Rule 6.2(.06)(a)
consistent with Footnote 49 of the Fees
Schedule, which as described above,
governs the financial incentive program
relating to SMMs. The alleviation of
8 See Securities and Exchange Act Release No.
85018 (January 31, 2019), 84 FR 1810 (February 5,
2019) (SR–CBOE–2018–075).
9 Id.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
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12309
potential confusion removes
impediments to and perfects the
mechanism of a free and open market
and a national market system, and, in
general, protects investors and the
public interest.
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 merely updates outdated rule
text and applies to all SPX SMMs (and
potential LMMs). 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 SPX
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
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 12 and Rule 19b–
4(f)(6) thereunder.13
At any time within 60 days of the
filing of the proposed rule change, the
12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
13 17
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12310
Federal Register / Vol. 84, No. 62 / Monday, April 1, 2019 / Notices
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
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–2019–016 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–2019–016. 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
VerDate Sep<11>2014
17:22 Mar 29, 2019
Jkt 247001
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CBOE–2019–016, and
should be submitted on or before April
16, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Eduardo A. Aleman,
Deputy Secretary.
change.7 On January 29, 2019, the
Exchange filed Amendment No. 1 to the
proposed rule change.
On March 22, 2019, the Exchange
withdrew the proposed rule change
(SR–NYSEArca–2018–43), as modified
by Amendment No. 1.
[FR Doc. 2019–06177 Filed 3–29–19; 8:45 am]
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Eduardo A. Aleman,
Deputy Secretary.
BILLING CODE 8011–01–P
[FR Doc. 2019–06175 Filed 3–29–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85422; File No. SR–
NYSEArca–2018–43]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Withdrawal of a
Proposed Rule Change, as Modified by
Amendment No. 1, Regarding
Investments of the First Trust TCW
Unconstrained Plus Bond ETF
March 26, 2019.
On July 11, 2018, NYSE Arca, Inc.
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change
seeking to modify certain investments of
the First Trust TCW Unconstrained Plus
Bond ETF, the shares of which are
currently listed and traded on the
Exchange pursuant to NYSE Arca Rule
8.600–E.
The proposed rule change was
published for comment in the Federal
Register on August 1, 2018.3 On
September 14, 2018, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change.5 On October 30, 2018, the
Commission instituted proceedings to
determine whether to approve or
disapprove the proposed rule change.6
On January 25, 2019, the Commission
designated a longer period for
Commission action on the proposed rule
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Securities Exchange Act Release No. 83720 (July
26, 2018), 83 FR 37560.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 84123,
83 FR 47654 (September 20, 2018).
6 See Securities Exchange Act Release No. 84504,
83 FR 55439 (November 5, 2018).
1 15
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SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
11:30 a.m. on
Wednesday, April 3, 2019.
PLACE: The meeting will be held at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
Commissioner Jackson, as duty
officer, voted to consider the items
listed for the closed meeting in closed
session.
The subject matters of the closed
meeting will be:
Institution and settlement of
injunctive actions; Institution and
settlement of administrative
proceedings; and Other matters relating
to enforcement proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
TIME AND DATE:
7 See Securities Exchange Act Release No. 84990,
84 FR 868 (January 31, 2019).
8 17 CFR 200.30–3(a)(12).
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]]>Agencies
- SECURITIES AND EXCHANGE COMMISSION
- Release No. 34-85419; File No. SR-CBOE-2019-016]
[Federal Register Volume 84, Number 62 (Monday, April 1, 2019)]
[Notices]
[Pages 12308-12310]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06177]
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SECURITIES AND EXCHANGE COMMISSION
Release No. 34-85419; File No. SR-CBOE-2019-016]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Cboe Options Rule 6.2
March 26, 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 March 14, 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 and II
below, which Items have been prepared by the Exchange. The Exchange
filed the proposal as a ``non-controversial'' proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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 Cboe Options Rule 6.2. 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 update Interpretation and Policy .06 of
Rule 6.2 (Hybrid Opening (and Sometimes Closing) System (``HOSS'')). By
way of background, Interpretation and Policy .06(a) of Rule 6.2
provides that on the last business day of each month, the
[[Page 12309]]
Exchange will conduct special end-of-month non-trading rotations for
each series of SPX options in order to determine the theoretical ``fair
value'' of such series as of [sic] SPX as of the time of close of
trading in the underlying cash market.\5\ Rule 6.2(.06)(a) also
provides during such special non-trading closing rotation (``closing
rotation''), a Lead Market-Maker (``LMM'') in the SPX options
designated by the Exchange in each series of SPX options will provide
bid and offer quotations. The Exchange notes that in connection with
recently retiring the Hybrid 3.0 platform and transitioning trading of
SPX options onto the Hybrid trading platform, the Exchange determined
to no longer appoint LMMs in SPX.\6\ In lieu of LMMs, the Exchange
established a financial incentive program for SPX Select Market-Makers
(``SMMs''), which provides that any appointed SPX SMM will receive a
monthly waiver of the cost of one Market-Maker Trading Permit and one
SPX Tier Appointment provided that the SMM satisfies the standard set
forth in Footnote 49 of the Exchange's Fees Schedule. While SMMs must
still comply with continuous quoting obligations of Market-Makers, they
are not otherwise obligated from a regulatory standpoint to satisfy any
heightened quoting standard or meet additional obligations. Rather, SPX
SMMs only receive a financial benefit (i.e., waiver of fees otherwise
assessed for one Market-Maker Trading Permit and one SPX Tier
Appointment) if they satisfy the standard set forth in Footnote 49.
Accordingly, the Exchange proposes to add references to SMMs in Rule
6.2(.06)(a).
---------------------------------------------------------------------------
\5\ See Cboe Options Rule 6.2, Interpretation and Policy .06.(a)
[sic]
\6\ See Securities and Exchange Act Release No. 83089 (April 23,
2018), 83 FR 18605 (April 27, 2018) (SR-CBOE-2018-029).
---------------------------------------------------------------------------
Additionally, the Exchange proposes to clarify that SMMs (and LMMs)
\7\ ``may'', and not ``must'', participate in the closing rotation.
Indeed, the Exchange notes that it recently submitted a rule change to
amend the Fees Schedule to no longer require SMMs to meet the fourth
prong of the standard set forth in Footnote 49 which provided that a
designated SMM must provide quotes for the closing rotation on a
rotating basis in order for SMMs to satisfy the fourth prong.\8\ In its
place, the Exchange now requires that within 30 minutes from the
initiation of the closing rotation, the Exchange must disseminate end-
of-month closing quotations pursuant to Cboe Options Rule 6.2(.06)(a).
The Exchange proposed the amendment to encourage all SMMs to provide
end-of-month non-trading settlement pricing quotations in SPX and SPXW,
which would increase the probability that the Exchange would be able to
disseminate fair value quotes pursuant to Rule 6.2(.06)(a).\9\ The
Exchange believes the proposed changes to Rule 6.2(.06)(a) will make
the rule text consistent with the current standard set forth in
Footnote 49 of the Fees Schedule. The Exchange lastly notes that
although it currently does not appoint LMMs in SPX, it proposes to
leave references to LMMs in Rule 6.2(.06)(a) in the event it determines
to appoint LMMs in the future.
---------------------------------------------------------------------------
\7\ As noted above, as there are no LMMs currently appointed in
SPX during Regular Trading Hours, there is no requirement for LMMs
to participate in the closing rotation. To the extent the Exchange
determines to appoint LMMs in the future, it notes that LMMs would
no longer be obligated to participate in the closing rotation.
\8\ See Securities and Exchange Act Release No. 85018 (January
31, 2019), 84 FR 1810 (February 5, 2019) (SR-CBOE-2018-075).
\9\ Id.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\10\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \11\ 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.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes updating Rule 6.2(.06)(a) with respect to
references to SMMs and eliminating the language which provides the
Exchange will designate a particular LMM each month, alleviates
potential confusion as it more accurately describes the Exchange's
current end-of-month fair value closing rotation procedures. The
proposed changes also make Rule 6.2(.06)(a) consistent with Footnote 49
of the Fees Schedule, which as described above, governs the financial
incentive program relating to SMMs. The alleviation of potential
confusion removes impediments to and perfects the mechanism of a free
and open market and a national market system, and, in general, protects
investors and the public interest.
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 merely updates
outdated rule text and applies to all SPX SMMs (and potential LMMs).
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 SPX
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the
[[Page 12310]]
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2019-016 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-2019-016. 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-2019-016, and should be submitted
on or before April 16, 2019.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-06177 Filed 3-29-19; 8:45 am]
BILLING CODE 8011-01-P
