Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Allow for Replacement Issues To Be Added to the Penny Pilot Program (“Pilot Program”) on a Quarterly Basis, 13382-13384 [2019-06512]
Download as PDF
13382
Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Notices
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.29
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) 30 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–2019–07 on the subject
line.
jbell on DSK30RV082PROD 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 SR–NYSEARCA–2019–07. 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/
29 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires the Exchange 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.
30 15 U.S.C. 78s(b)(2)(B).
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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–2019–07 and
should be submitted on or before April
25, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–06508 Filed 4–3–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85453; File No. SR–BOX–
2019–08]
Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Allow for Replacement
Issues To Be Added to the Penny Pilot
Program (‘‘Pilot Program’’) on a
Quarterly Basis
March 29, 2019.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 22,
2019, BOX Exchange LLC (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
31 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00140
Fmt 4703
Sfmt 4703
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
BOX Rule 7260 (Penny Pilot Program) to
allow for replacement issues to be
added to the Pilot Program on a
quarterly basis, without altering the
expiration date of the Pilot Program,
which is June 30, 2019. The text of the
proposed rule change is available from
the principal office of the Exchange, at
the Commission’s Public Reference
Room and also on the Exchange’s
internet website at https://
boxoptions.com.
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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization 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
BOX Rule 7260 (Penny Pilot Program) to
allow for replacement issues to be
added to the Pilot Program on a
quarterly basis, without altering the
expiration date of the Pilot Program.
This is a competitive filing that is based
on a proposal recently submitted by
NYSE American LLC (‘‘NYSEAMER’’).3
The Exchange recently filed to extend
the Pilot Program until June 30, 2019
(from December 31, 2018) and also
updated the rule text to provide that
replacement issues may be added to the
Pilot on the second trading day
following January 1, 2019.4 The Rule
3 See Securities Exchange Act Release No. 34–
85348 (March 18, 2019) (Order Approving SR–
NYSEAMER–2019–05).
4 See Securities Exchange Act Release No. 34–
84869 (December 19, 2018), 83 FR 66806 (December
27, 2018) (SR–BOX–2018–38). On January 3, 2019,
the Exchange added new issues to replace delisted
Pilot Program issues, as announced by Regulatory
Circular, available here, https://boxoptions.com/
E:\FR\FM\04APN1.SGM
04APN1
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authorizes the Exchange to replace any
options issues in the Pilot Program that
have been delisted with the next most
actively traded multiply listed options
classes that are not yet included in the
Pilot Program, based on trading activity
in the previous six months.5 The
Exchange proposes to modify BOX Rule
7260 to allow the Exchange to add
replacement issues (for Pilot issues that
have been delisted) on a quarterly basis.
The Exchange added replacement issues
in January 2019 and would be eligible
to add replacement issues in April, July,
and October. The Exchange believes this
change would allow the Exchange to
update issues eligible for the Pilot
Program (by replacing delisted issues)
on a quarterly basis (as opposed to semiannual) and would enable further
analysis of the Pilot Program and a
determination of how the Pilot Program
should be structured in the future.
As is the case today, the Exchange
will determine replacement issues based
on trading activity in the previous six
months (the ‘‘six month lookback’’) but
will not use the month immediately
preceding the addition of a replacement
to the Pilot Program. Thus, a
replacement class to be added on the
second trading day following April 1,
2019 would be identified based on The
Option Clearing Corporation’s trading
volume data from September 1, 2018
through February 28, 2019.6 The
Exchange believes the six month
lookback is appropriate because this
time period would help reduce the
impact of unusual trading activity as a
result of unique market events, such as
corporate action (i.e., it would result in
a more reliable measure of average daily
trading volume than would a shorter
period).
This filing does not propose any
substantive changes to the Pilot
Program: All classes currently
participating will remain the same and
all minimum increments will remain
unchanged. The Exchange believes the
benefits to public customers and other
market participants who will be able to
express their true prices to buy and sell
options have been demonstrated to
outweigh the increase in quote traffic.
Lastly, in order to conform to the
proposed Pilot Program, the Exchange
proposes to remove the specific dates
for the lookback period and replace it
with language referencing the previous
six months. This language replacement
assets/RC-2019-01-Penny-Pilot-Issue-ReplacementsUpdate-v2.pdf.
5 See BOX Rule 7260.
6 The Rule continues to obligate the Exchange to
announce the replacement issues by Regulatory
Circular. See id.
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17:25 Apr 03, 2019
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will have no substantive impact on the
rule.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),7 in general, and Section 6(b)(5)
of the Act,8 in particular, in that it is
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
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. In particular, the
Exchange believes the proposal to allow
the addition of replacement issues to the
Pilot Program on a quarterly basis
would result in a more current list of
Pilot-eligible issues and would enable
further analysis of the Pilot Program,
including for a determination of how
the Pilot Program should be structured
in the future. Further, the Exchange
believes the six month lookback is
appropriate because this time period
would help reduce the impact of
unusual trading activity as a result of
unique market events, such as a
corporate action (i.e., it would result in
a more reliable measure of average daily
trading volume than would a shorter
period). Thus, the Exchange believes
this proposal would promote just and
equitable principles of trade, foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system.
The Exchanges notes that it [sic] not
making any other substantive changes to
the Pilot Program, other than modifying
the timing for replacement issues and
therefore the Exchange will continue to
participate in a program that has been
viewed as beneficial to traders, investors
and public customers and viewed as
successful by the other options
exchanges participating in it.
The Exchange believes that the Pilot
Program would continue to promote just
and equitable principles of trade by
enabling public customers and other
market participants to express their true
prices to buy and sell options to the
benefit of all market participants.
7 15
8 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00141
Fmt 4703
Sfmt 4703
13383
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 not
necessary or appropriate in furtherance
of the purposes of the Act. In this regard
and as indicated above, the Exchange
notes that the rule change is being
proposed as a competitive response to a
filing submitted by NYSEAMER.9 In
addition, the Exchange believes that
allowing the Exchange to add
replacement issues to the Pilot Program
on a quarterly basis would make the list
of Pilot-eligible issues more current and
would enable further analysis of the
Pilot, including for a determination of
how the Pilot Program should be
structured in the future. In doing so, the
proposed rule change will also serve to
promote regulatory clarity and
consistency, thereby reducing burdens
on the marketplace and facilitating
investor protection. The Pilot Program is
an industry-wide initiative supported by
all other option exchanges. The
Exchange believes that the proposed
change would allow for continued
competition between Exchange market
participants trading similar products as
their counterparts on other exchanges,
while at the same time allowing the
Exchange to continue to compete for
order flow with other exchanges in
option issues trading as part of the Pilot
Program.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and Rule
19b–4(f)(6) thereunder.11 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
9 See
supra, note 3.
U.S.C. 78s(b)(3)(A)(iii).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
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.
10 15
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Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Notices
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 12 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),13 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that 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 allow the Exchange to add
classes to the pilot that are actively
traded at the start of the second quarter
(i.e., in April 2019) and replace those
that have been delisted and are no
longer trading on a more frequent basis.
This will help ensure that the top 363
most actively traded, multiply-listed
classes are included in the Pilot, which
will enable further analysis of the
Pilot.14
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) 15 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
jbell on DSK30RV082PROD with NOTICES
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:
12 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
14 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).
15 15 U.S.C. 78s(b)(2)(B).
13 17
VerDate Sep<11>2014
17:25 Apr 03, 2019
Jkt 247001
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–
BOX–2019–08 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–BOX–2019–08. 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, on business days
between the hours of 10 a.m. and 3 p.m.,
located at 100 F Street NE, Washington,
DC 20549. Copies of such 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–BOX–2019–08 and should
be submitted on or before April 25,
2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–06512 Filed 4–3–19; 8:45 am]
BILLING CODE 8011–01–P
16 17
PO 00000
Fmt 4703
[Release No. 34–85464; File No. SR–C2–
2019–006]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend Rule
6.4, Interpretation and Policy .02 To
Specify That Replacement Issues May
Be Added to the Penny Pilot Program
(‘‘Pilot’’) on a Quarterly Basis, Without
Altering the Expiration Date of the
Pilot, Which is June 30, 2019
March 29, 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 22,
2019, Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) proposes to amend
Rule 6.4, Interpretation and Policy .02 to
specify that replacement issues may be
added to the Penny Pilot Program
(‘‘Pilot’’) on a quarterly basis, without
altering the expiration date of the Pilot,
which is June 30, 2019. The text of the
proposed rule change is provided
below.
(additions are italicized; deletions are
[bracketed])
*
*
*
Sfmt 4703
*
*
Rules of Cboe C2 Exchange, Inc.
*
*
*
*
*
Rule 6.4. Minimum Increments for Bids
and Offers
(a)–(b) No change.
Interpretations and Policies . . .
.01 No change.
.02 The Exchange may replace any
option class participating in the Penny
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
CFR 200.30–3(a)(12).
Frm 00142
SECURITIES AND EXCHANGE
COMMISSION
E:\FR\FM\04APN1.SGM
04APN1
Agencies
[Federal Register Volume 84, Number 65 (Thursday, April 4, 2019)]
[Notices]
[Pages 13382-13384]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06512]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85453; File No. SR-BOX-2019-08]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Allow for
Replacement Issues To Be Added to the Penny Pilot Program (``Pilot
Program'') on a Quarterly Basis
March 29, 2019.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 22, 2019, BOX Exchange LLC (the ``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I and II below, which Items have been
prepared by the self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule 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
The Exchange proposes to amend BOX Rule 7260 (Penny Pilot Program)
to allow for replacement issues to be added to the Pilot Program on a
quarterly basis, without altering the expiration date of the Pilot
Program, which is June 30, 2019. The text of the proposed rule change
is available from the principal office of the Exchange, at the
Commission's Public Reference Room and also on the Exchange's internet
website at https://boxoptions.com.
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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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 BOX Rule 7260 (Penny Pilot Program)
to allow for replacement issues to be added to the Pilot Program on a
quarterly basis, without altering the expiration date of the Pilot
Program. This is a competitive filing that is based on a proposal
recently submitted by NYSE American LLC (``NYSEAMER'').\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 34-85348 (March 18,
2019) (Order Approving SR-NYSEAMER-2019-05).
---------------------------------------------------------------------------
The Exchange recently filed to extend the Pilot Program until June
30, 2019 (from December 31, 2018) and also updated the rule text to
provide that replacement issues may be added to the Pilot on the second
trading day following January 1, 2019.\4\ The Rule
[[Page 13383]]
authorizes the Exchange to replace any options issues in the Pilot
Program that have been delisted with the next most actively traded
multiply listed options classes that are not yet included in the Pilot
Program, based on trading activity in the previous six months.\5\ The
Exchange proposes to modify BOX Rule 7260 to allow the Exchange to add
replacement issues (for Pilot issues that have been delisted) on a
quarterly basis. The Exchange added replacement issues in January 2019
and would be eligible to add replacement issues in April, July, and
October. The Exchange believes this change would allow the Exchange to
update issues eligible for the Pilot Program (by replacing delisted
issues) on a quarterly basis (as opposed to semi-annual) and would
enable further analysis of the Pilot Program and a determination of how
the Pilot Program should be structured in the future.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 34-84869 (December
19, 2018), 83 FR 66806 (December 27, 2018) (SR-BOX-2018-38). On
January 3, 2019, the Exchange added new issues to replace delisted
Pilot Program issues, as announced by Regulatory Circular, available
here, https://boxoptions.com/assets/RC-2019-01-Penny-Pilot-Issue-Replacements-Update-v2.pdf.
\5\ See BOX Rule 7260.
---------------------------------------------------------------------------
As is the case today, the Exchange will determine replacement
issues based on trading activity in the previous six months (the ``six
month lookback'') but will not use the month immediately preceding the
addition of a replacement to the Pilot Program. Thus, a replacement
class to be added on the second trading day following April 1, 2019
would be identified based on The Option Clearing Corporation's trading
volume data from September 1, 2018 through February 28, 2019.\6\ The
Exchange believes the six month lookback is appropriate because this
time period would help reduce the impact of unusual trading activity as
a result of unique market events, such as corporate action (i.e., it
would result in a more reliable measure of average daily trading volume
than would a shorter period).
---------------------------------------------------------------------------
\6\ The Rule continues to obligate the Exchange to announce the
replacement issues by Regulatory Circular. See id.
---------------------------------------------------------------------------
This filing does not propose any substantive changes to the Pilot
Program: All classes currently participating will remain the same and
all minimum increments will remain unchanged. The Exchange believes the
benefits to public customers and other market participants who will be
able to express their true prices to buy and sell options have been
demonstrated to outweigh the increase in quote traffic. Lastly, in
order to conform to the proposed Pilot Program, the Exchange proposes
to remove the specific dates for the lookback period and replace it
with language referencing the previous six months. This language
replacement will have no substantive impact on the rule.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Securities Exchange Act of 1934
(the ``Act''),\7\ in general, and Section 6(b)(5) of the Act,\8\ in
particular, in that it is 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 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. In particular, the Exchange believes the proposal to
allow the addition of replacement issues to the Pilot Program on a
quarterly basis would result in a more current list of Pilot-eligible
issues and would enable further analysis of the Pilot Program,
including for a determination of how the Pilot Program should be
structured in the future. Further, the Exchange believes the six month
lookback is appropriate because this time period would help reduce the
impact of unusual trading activity as a result of unique market events,
such as a corporate action (i.e., it would result in a more reliable
measure of average daily trading volume than would a shorter period).
Thus, the Exchange believes this proposal would promote just and
equitable principles of trade, foster cooperation and coordination with
persons engaged in facilitating transactions in securities, and remove
impediments to and perfect the mechanisms of a free and open market and
a national market system.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchanges notes that it [sic] not making any other substantive
changes to the Pilot Program, other than modifying the timing for
replacement issues and therefore the Exchange will continue to
participate in a program that has been viewed as beneficial to traders,
investors and public customers and viewed as successful by the other
options exchanges participating in it.
The Exchange believes that the Pilot Program would continue to
promote just and equitable principles of trade by enabling public
customers and other market participants to express their true prices to
buy and sell options to the benefit of all market participants.
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 not necessary or appropriate in
furtherance of the purposes of the Act. In this regard and as indicated
above, the Exchange notes that the rule change is being proposed as a
competitive response to a filing submitted by NYSEAMER.\9\ In addition,
the Exchange believes that allowing the Exchange to add replacement
issues to the Pilot Program on a quarterly basis would make the list of
Pilot-eligible issues more current and would enable further analysis of
the Pilot, including for a determination of how the Pilot Program
should be structured in the future. In doing so, the proposed rule
change will also serve to promote regulatory clarity and consistency,
thereby reducing burdens on the marketplace and facilitating investor
protection. The Pilot Program is an industry-wide initiative supported
by all other option exchanges. The Exchange believes that the proposed
change would allow for continued competition between Exchange market
participants trading similar products as their counterparts on other
exchanges, while at the same time allowing the Exchange to continue to
compete for order flow with other exchanges in option issues trading as
part of the Pilot Program.
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\9\ See supra, note 3.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which
[[Page 13384]]
it was filed, or such shorter time as the Commission may designate, if
consistent with the protection of investors and the public interest,
the proposed rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) thereunder.
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that 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 allow
the Exchange to add classes to the pilot that are actively traded at
the start of the second quarter (i.e., in April 2019) and replace those
that have been delisted and are no longer trading on a more frequent
basis. This will help ensure that the top 363 most actively traded,
multiply-listed classes are included in the Pilot, which will enable
further analysis of the Pilot.\14\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ 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).
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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) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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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 [email protected]. Please include
File Number SR-BOX-2019-08 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-BOX-2019-08. 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, on business days between the hours of 10 a.m. and 3
p.m., located at 100 F Street NE, Washington, DC 20549. Copies of such
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-BOX-2019-08 and
should be submitted on or before April 25, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-06512 Filed 4-3-19; 8:45 am]
BILLING CODE 8011-01-P