Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Continuous Quoting Obligations for Market-Makers, 17894-17897 [2019-08398]
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Federal Register / Vol. 84, No. 81 / Friday, April 26, 2019 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85698; File No. SR–C2–
2019–007]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Continuous
Quoting Obligations for Market-Makers
April 22, 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 April 8,
2019, Cboe C2 Exchange, Inc.
(‘‘Exchange’’ or ‘‘C2’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Exchange filed the 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
its continuous quoting obligations for
Market-Makers. 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://markets.cboe.com/us/
options/regulation/rule_filings/ctwo/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
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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.
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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1. Purpose
The Exchange proposes to change to
its current continuous quoting
requirement for Market-Makers under
Rule 8.6(d) (Market-Maker Quotes). This
proposed rule change to the continuous
quoting requirement is based on existing
Nasdaq PHLX LLC (‘‘Phlx’’), Nasdaq
ISE, LLC (‘‘ISE’’), Nasdaq MRX, LLC
(‘‘MRX’’) and Nasdaq GEMX, LLC
(‘‘GEMX’’) rules 5 previously filed with
the Commission. The proposed rule
change also intends to harmonize
quoting requirements across C2 and its
affiliated exchanges, Cboe BZX
Exchange, Inc. (‘‘BZX Options’’) and
Cboe EDGX Exchange, Inc. (‘‘EDGX
Options’’).6 Overall, the Exchange
believes that having substantially the
same Market-Maker continuous quoting
requirements across its affiliated
exchanges and other exchanges will
reduce the compliance burden and
confusion for Market-Makers that are
members of multiple exchanges
industry-wide. The Exchange also
proposes to make non-substantive
changes to Rule 8.2, amending an
inadvertent error to an inaccurate crossreference and deleting an obsolete
provision that is no longer relevant to
the Exchange rules and User
functionality.
Specifically, the Exchange proposes to
amend a Market-Maker’s continuous
quoting obligations under Rule 8.6(d)
based on existing Phlx, ISE, MRX and
GEMX rules, previously filed with the
Commission. The proposed
amendments to Rule 8.2(d) are
substantially similar to the continuous
quoting requirement provisions on other
exchanges.7 Current Rule 8.6(d)
provides that a Market-Maker must
enter continuous bids and offers in
series in its appointed classes on a daily
basis in 60% of the series of each
appointed class for 90% of the trading
day. The proposed rule change to Rule
8.6(d) requires a Market-Maker to
continuously enter bids and offers in
series in its appointed classes (pursuant
to Rule 8.6(b)) in 60% of the cumulative
5 See Phlx Rule 1081(c); ISE Rule 804(e); MRX
Rule 804(e); and GEMX Rule 804(e). See also
Securities Exchange Act Release No. 83209 (May
10, 2018), 83 FR 22717 (May 16, 2018) (SR–Phlx–
2018–22) (Order Granting Approval of Proposed
Rule Change to Amend Phlx’s Quoting
Requirements, Among Other Changes) (SR–Phlx–
2018–22).
6 The Exchange notes that BZX Options and
EDGX Options are simultaneously proposing the
same continuous quoting requirements.
7 See supra note 5.
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number of seconds, or such higher
percentage as the Exchange may
announce in advance, for which that
Market-Maker’s appointed classes are
open, excluding any adjusted series, any
intra-day add-on series on the day
during which such series are added for
trading, any Quarterly Option Series
and any series with an expiration of
greater than 270 days. Additionally, the
proposed change amends current
subparagraph (d)(2) to provide for the
way in which the Exchange calculates
this requirement and is explicit in
stating that quoting is not required in
every appointed class. An example of
the proposed calculation is presented
below:
Market-Maker A (‘‘Firm A’’) 8 has selected
an appointment to quote option class U, in
which options U1, U2, U3, U4, and U5 are
open for trading.
Firm A also has selected appointments in
options classes V and W.
Option U1 opened at 09:30:00 9 and closed at
16:00:00
Firm A quoted U1 at 09:35:30 @13.00(10)–
15.00(10)
Firm A updated quote in U1 at 09:50:31 @
10.00(10)–15.00(20)
Firm A purged quote at 15:55:40
Total quoted time for U1 is: 15:55:40–
09:35:30 = (15–9) * 3600 + (55–35) * 60 +
(40–30) = 22810 (seconds)
Total available quote time for U1 is:
16:00:00–09:30:00 = (16–9) * 3600 + (60–
30) * 60 + (00–00) = 270000 (seconds)
Option U2 opened at 09:30:00 and closed at
16:00:00
Firm A quoted U2 at 10:05:30 @13.00(10)–
15.00(10)
Firm A updated quote in U2 at 11:00:01 @
11.00(10)–16.00(20)
Firm A purged quote at 15:05:40
Total quoted time for U2 is: 15:05:40–
10:05:30 = (15–10) * 3600 + (65–05) * 60
+ (40–30) = 21610 (seconds)
Total available quote time for U2 is:
16:00:00–09:30:00 = (16–9) * 3600 + (60–
30) * 60 + (00–00) = 27000 (seconds)
Option U3 opened at 09:30:00 and closed at
16:15:00
Firm A quoted U3 at 11:10:21 @21.00(10)–
24.00(20)
Firm A purged quote at 15:15:05
Total quoted time for U3 is: 15:15:05–
11:10:21 = (15–11) * 3600 + (75–10) * 60
+ (65–21) = 18344 (seconds)
Total available quote time for U3 is:
16:01:20–09:40:02 = (16–9) * 3600 + (75–
30) * 60 + (00–00) = 27900 (seconds)
Option U4 opened at 9:30:00 and closed at
16:00:00
Firm A quoted U4 at 09:34:29 @35.00(10)–
37.00(10)
8 The Exchange notes that a Market-Maker may
use multiple Executing Firm IDs (‘‘EFIDs’’) to
submit quotes in a class. The quoting time from all
of a Market-Maker EFIDs’ will be considered
together when determining compliance with this
obligation.
9 All times in example calculation in Eastern
Time.
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Firm A updated quote in U4 at 10:30:21
@31.00(10)–37.00(20)
Firm A purged quote in U4 at 15:59:34
Total quoted time for U4 is: 15:59:34–
09:34:29 = (15–09) * 3600 + (59–34) * 60
+ (34–29) = 23105 (seconds)
Total available quote time is: 16:00:00–
09:30:00 = (16–9) * 3600 + (60–30) * 60 +
(00–0) = 27000 (seconds)
Option U5 opened at 9:30:00 and closed at
16:00:00
Firm A did not quote U5 thus, the total
quoted time for U5 will be: 0 (seconds)
Total available quote time is: 16:00:00–
09:30:00 = (16–9) * 3600 + (60–30) * 60 +
(00–00) = 27000 (seconds)
Total time Firm A quoted class U: 22810 +
21610 + 18344 + 23105 + 0 = 85869
(seconds)
Total eligible quoting time for Firm A on
class U: 27000 + 27000 + 27900 + 27000
+ 27000 = 135900 (seconds)
Similarly assume:
Total time for Firm A quoted class V: 80983
(seconds)
Total eligible quoting time for Firm A on
class V: 84515 (seconds)
Total time for Firm A quoted class W: 0
(seconds)
Total eligible quoting time for Firm A on
underlying W: 46513 (seconds)
Then the total quoting percentage for Firm A
is: (85869 + 80983 + 0)/(135900 + 84515 +
46513) = 156852/266928 = 62.5%
As stated, the current rule requires a
Market-Maker to quote 60% of the series
in which it is registered for 90% of each
trading day. By comparison, the
proposed rule change permits a MarketMaker to quote any percentage of
appointed classes so long as the MarketMaker meets the requirement that it
enters quotes aggregating 60% of the
cumulative seconds across the total
seconds that its appointment classes are
open for trading. The proposed rule
explicitly provides that a Market-Maker
does not necessarily have to quote every
appointed class. The Exchange believes
the proposed rule better accommodates
the occasional issues that may arise in
a particular class, whether technical or
manual. For example, an issue may arise
on the Market-Maker’s side in which
there is a glitch in its systems or a
manual computing error that
temporarily disrupts quoting ability.
The Exchange notes that the existing
requirement may at times discourage
liquidity in particular classes because a
Market-Maker is forced to focus on a
momentary technical lapse in order to
meet the higher current thresholds,
rather than using the appropriate
resources to focus on the classes that
need and consume additional liquidity.
The proposed rule also adds language
that the Exchange may announce in
advance a higher percentage than the
proposed 60% of the cumulative
number of seconds requirement, which
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the Exchange believes may be
appropriate on occasions when doing so
would be in the interest of a fair and
orderly market. This discretion is the
same in the corresponding rules of Phlx,
ISE, MRX, and GEMX,10 as well as
within the continuous quoting
requirements of the Exchanges’
affiliated exchanges, BZX Options and
EDGX Options. The proposed rule
change also moves the series excluded
from a Market-Maker’s quoting
requirement to Rule 8.6(d) and deletes
this same language that is currently in
subparagraph (d)(3). The proposed
change also amends the current quoting
exclusion of any series with an
expiration of nine months or greater to
an expiration of greater than 270 days.
The Exchange notes that Market-Makers
generally already monitor expirations by
a defined count of 270 days, as opposed
to a nine month count in which the
number of days continuously varies.
Therefore, this proposed change intends
to align the Exchange’s rules with
current industry practice.11 The
proposed rule change also amends the
current quoting exclusions to include
Quarterly Option series. C2 may list and
trade Quarterly Options Series pursuant
to Rule 5.5(e) and this exclusion is
consistent with corresponding Rule 22.6
(Market Maker Quotations) of the
Exchange’s affiliated exchanges, BZX
Options and EDGX Options,12 as well as
the corresponding rules of Phlx, ISE,
MRX, and GEMX.13 Additionally, the
proposed rule change amends the
reference to the quoting standard in
subparagraph (d)(1) to 60%.
As stated, the Exchange amends its
continuous quoting requirements to be
substantially similar to the requirements
under other exchanges’ rules.14 The
Exchange believes that proposed
amendments to its quoting requirements
are reasonable because these
requirements are already in place on
10 See
supra note 5.
Exchange notes that EDGX Options and
BZX Options are simultaneously proposing to
amend their corresponding rules to exclude any
series with an expiration of 270 days or greater.
12 See Securities Exchange Act Release No. 71129
(December 18, 2013), 78 FR 77736 (December 18,
2013) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change To Modify BATS
Options Market Maker Continuous Quoting
Obligation Rules) (SR–BATS–2013–062), which
adopted exclusions, including Quarterly Options
series, to Market Maker’s quoting obligations and
noted that such exclusions were ‘‘consistent with
the rules of several other options exchanges’’ and
‘‘did not diminish the quoting obligation’’. The
Exchange also notes that these exclusions were
adopted on EDGX Options when that exchange was
established.
13 See supra note 5.
14 See supra note 5.
11 The
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17895
other options exchanges.15 The
Exchange notes that the proposed
change to continuous quoting
requirements creates a clear, affirmative
Market-Maker obligation to hold
themselves out as willing to buy and
sell securities for their own account on
a continuous basis, which justifies
favorable Market-Maker treatment and
will continue to provide customer
trading interest a net benefit. The
Exchange further believes having
consistent with other exchanges 16 will
simplify the regulatory requirements for
its Trading Permit Holders (‘‘TPHs’’)
that are active across multiple
exchanges.
Additionally, the Exchange proposes
to make non-substantive changes to
Rule 8.2. First, the Exchange proposes to
amend an inadvertent mistake regarding
a cross reference within Rule 8.2(d).
Currently, Rule 8.2 states that the
Exchange may limit the number of
appointments a Market-Maker may
have, or the number of Market-Makers
that may have appointments in a class,
pursuant to Rule 8.1(b). The Exchange
notes, however, that Rule 8.1(c), in fact,
is the appropriate provision that allows
the Exchange to limit the number of
appointments. The Exchange believes
this change is necessary to correct an
inadvertent error in its rule and provide
clarity for TPHs. Furthermore, the
Exchange proposes to delete Rule 8.2(c),
which currently states that a MarketMaker’s appointment in a class confers
the right of the Market-Maker to quote
(using order functionality) in that class.
The Exchange notes that it recently
discontinued this order functionality
and implemented ‘‘bulk messaging’’
quoting functionality that is available to
all Users, including Market-Makers.17
As a result, there is no longer a specific
quote functionality available only to
Market-Makers, therefore the Exchange
believes this provision is no longer
necessary. This is also consistent with
the rule of its affiliated exchanges, BZX
Options and EDGX Options. In line with
this proposed deletion, the Exchange
changes current Rule 8.2(d) to proposed
Rule 8.2(c).
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
15 See supra note 6. The same quoting
requirements will be incorporated into EDGX
Options and BZX Options rules.
16 Id.
17 See Securities Exchange Act Release No. 85038
(February 1, 2019), 84 FR 2598 (February 7, 2019)
(Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Discontinue Bulk Order
Functionality and Implement Bulk Message
Functionality) (SR–C2–2018–025). C2 Rule 1.1.
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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.18 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 19 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) 20 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 rule change to amend
Market-Makers’ continuous quoting
obligations will remove impediments to
and perfect the mechanism of a free and
open market and a national market
system. The proposed rule change to a
Market-Maker’s continuous quoting
obligations seeks to conform the quoting
obligations to that of the rules of other
exchanges.21 The Exchanges currently
requires a Market-Maker to quote in at
least 60% the options series in which
the Market-Maker is registered during
90% of the trading day. The Exchange
believes that applying a Market-Maker’s
cumulative quoting time to the MarketMaker’s aggregate appointed classes to
meet a threshold of 60% of the
cumulative seconds its appointed
classes are open for trading (like that of
the current requirements on other
exchanges) is less stringent than the
Exchange’s current requirement because
of the lower quoting time threshold and
because the proposed requirement does
not consider a percentage of its
appointed classes, so long as the overall
60% time requirement is met. Further,
the Exchange notes that the current
continuous quoting requirement
potentially discourages liquidity at
times when a Market-Maker is forced to
focus on making up for a momentary
lapse in a particular class rather than
allocating appropriate resources to focus
on the classes that need and consume
18 15
19 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
20 Id.
21 See
supra note 5.
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additional liquidity, and then allowing
a Market-Maker to continue quoting in
the class that experienced a lapse after
correcting the applicable issue.22 The
Exchange believes that this rule change
better accommodates these occasional
lapses, whether technical or manual,
and enables a Market-Maker to provide
appropriate liquidity commensurate
with the needs of its appointed classes.
Moreover, the Exchange believes that it
can better attract Market-Makers, add
liquidity, and grow its market to the
benefit of all investors, if its quoting
obligation is more in line with that of
other exchanges. The proposed rule
change supports the quality of the
Exchange’s market by helping to ensure
that Market-Makers will continue to be
obligated to quote in a percentage of
their appointed classes. Ultimately, the
benefit the proposed rule change confers
upon Market-Makers is offset by the
continued responsibilities to provide
significant liquidity to its appointed
classes to the benefit of all market
participants. The Exchange believes that
the proposed change to continuous
quoting requirements creates a clear,
affirmative Market-Maker obligation to
hold themselves out as willing to buy
and sell securities for their own account
on a continuous basis, which justifies
favorable Market-Maker treatment and
will continue to provide customer
trading interest a net benefit. The
Exchange further notes that the
proposed rule text is consistent with the
Act because the quoting obligations are
substantially the same as quoting
obligations on Phlx, ISE, MRX, and
GEMX today, previously filed with the
Commission.23 Additionally, the
Exchange notes that the proposed rule
change including Quarterly Option
series among the series excluded from
quoting obligations is intended to
harmonizing series excluded across the
Exchange and its affiliated exchanges,24
as well as other exchanges,25 which will
provide clarity for Market-Makers
participating across multiple exchanges.
Furthermore, the Exchange believes the
proposed rule change excluding any
series with an expiration greater than
270 days, as opposed to nine months or
greater, from a Market-Maker’s quoting
obligations is in line with the way in
which Market-Makers currently monitor
expiration. As a result, the Exchange
believes that this change will foster
22 See also Exchange Rule 8.6(d)(1). The Exchange
already accounts for technical failure or limitation
due to the automated trading system the Exchange
uses for the trading of option contracts (‘‘System’’).
23 See supra note 5.
24 See BZX Options Rule 22.6 and EDGX Options
Rule 22.6.
25 See supra note 5.
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cooperation and coordination with
persons engaged in regulating securities,
as well as facilitating transactions in
securities. The proposed change will
reduce confusion by codifying an
industry practice already in place and
harmonizing expiration time across the
Exchange and its affiliated exchanges.26
The Exchange also notes that the
proposed changes are reasonable and do
not affect investor protection because
the proposed changes do not present
any novel or unique issues, as they have
either been previously filed with the
Commission or are codifying an
industry practice currently in place.
Moreover, the Exchange believes that
the amendment to the cross-reference in
current Rule 8.2(d) (proposed Rule
8.2(c)) corrects an inadvertent crossreference error and that the proposed
deletion of Rule 8.2(c) updates its rules
to reflect the recent discontinuation of
the order functionality referenced in
Rule 8.2(c) and implementation of bulk
messaging functionality, which allows
all Users, including Market-Makers, to
enter quotes. As a result, these changes
provide clarity and reduce confusion for
investors.
Additionally, the Exchange believes
the proposed rule change is consistent
with Section 6(b)(1) of the Act,27 which
provides that the Exchange be organized
and have the capacity to be able to carry
out the purposes of the Act and to
enforce compliance by the Exchange’s
TPHs and persons associated with its
TPHs with the Act, the rules and
regulations thereunder, and the rules of
the Exchange. The Exchange notes that
the proposed rule change to a MarketMaker’s continuous quoting
requirements will serve to harmonize
the quoting requirement for MarketMakers across its affiliated exchanges,
EDGX Options and BZX Options that
are also proposing substantially the
same requirements. The Exchange thus
believes these proposed changes create
uniformity, which allows for the
Exchange to organize across affiliated
exchanges and to more easily enforce
compliance by participants on multiple
affiliated exchanges.
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 believes that the proposed
rule change to a Market-Maker’s
continuous quoting requirements under
26 See
27 15
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supra note 9.
U.S.C. 78f(b)(1).
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Rule 8.6 does not affect intramarket
competition. The proposed applies an
affirmative obligation to all MarketMakers to hold themselves out as
continuously willing to buy and sell
options for their own account, justifying
favorable treatment and benefitting the
trading interest of all customers. The
Exchange believes that the proposed
change to continuous quoting
requirements does not affect intermarket
competition, as this proposal is based
on other exchanges’ rules previously
filed with the Commission.28 The
Exchange also notes that to the degree
that other exchanges have varying
continuous quoting obligations for
Market-Makers, market participants on
other exchanges are welcome to become
Market-Makers on C2 if they determine
that this proposed rule change has made
market making on C2 more attractive or
favorable. Finally, the Exchange
believes that the proposed rule change
will relieve any burden on market
participants because it serves to provide
Market-Makers with affirmative quoting
requirements that ensure each
appointed class will receive appropriate
liquidity to the benefit of all market
participants who interact with that
liquidity.
Additionally, the proposed rule
change to amend Rule 8.2 does not
address competitive issues, but rather,
as discussed above, is merely intended
to correct an inadvertent uses of an
inaccurate cross-reference, as well as
delete an obsolete provision, which will
alleviate potential confusion.
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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 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:
A. Significantly affect the protection
of investors or the public interest;
B. impose any significant burden on
competition; and
C. 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 29 and Rule 19b–4(f)(6) 30
thereunder. At any time within 60 days
28 See
supra note 5.
U.S.C. 78s(b)(3)(A).
30 17 CFR 240.19b–4(f)(6).
29 15
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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–
C2–2019–007 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–C2–2019–007. 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
PO 00000
Frm 00126
Fmt 4703
Sfmt 4703
17897
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–C2–2019–007 and should
be submitted on or before May 17, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–08398 Filed 4–25–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85699; File No. SR–MSRB–
2019–08]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Certain MSRB
Rules To Update Cross-References to
the Rules of Other Self-Regulatory
Organizations, To Amend Rules With
Grammatical or Typographical Errors
and To Delete Certain Sections of
MSRB Rules That Are Outdated or No
Longer Relevant
April 22, 2019.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on April 10, 2019 the Municipal
Securities Rulemaking Board (‘‘MSRB’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by the MSRB. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The MSRB filed with the Commission
a proposed rule change to amend certain
MSRB rules to update cross-references
to the rules of other self-regulatory
organizations (SROs), to amend rules
with grammatical or typographical
errors and to delete certain sections of
MSRB rules that are outdated or no
longer relevant given the expiration or
passing of time limitations set forth
therein (the ‘‘proposed rule change’’).
The MSRB is filing the proposed rule
31 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\26APN1.SGM
26APN1
]]>Agencies
[Federal Register Volume 84, Number 81 (Friday, April 26, 2019)]
[Notices]
[Pages 17894-17897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08398]
[[Page 17894]]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85698; File No. SR-C2-2019-007]
Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Continuous Quoting Obligations for Market-Makers
April 22, 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 April 8, 2019, Cboe C2 Exchange, Inc. (``Exchange'' or ``C2'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Exchange filed the
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 C2 Exchange, Inc. (the ``Exchange'' or ``C2'') proposes to
amend its continuous quoting obligations for Market-Makers. 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://markets.cboe.com/us/options/regulation/rule_filings/ctwo/), 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 change to its current continuous quoting
requirement for Market-Makers under Rule 8.6(d) (Market-Maker Quotes).
This proposed rule change to the continuous quoting requirement is
based on existing Nasdaq PHLX LLC (``Phlx''), Nasdaq ISE, LLC
(``ISE''), Nasdaq MRX, LLC (``MRX'') and Nasdaq GEMX, LLC (``GEMX'')
rules \5\ previously filed with the Commission. The proposed rule
change also intends to harmonize quoting requirements across C2 and its
affiliated exchanges, Cboe BZX Exchange, Inc. (``BZX Options'') and
Cboe EDGX Exchange, Inc. (``EDGX Options'').\6\ Overall, the Exchange
believes that having substantially the same Market-Maker continuous
quoting requirements across its affiliated exchanges and other
exchanges will reduce the compliance burden and confusion for Market-
Makers that are members of multiple exchanges industry-wide. The
Exchange also proposes to make non-substantive changes to Rule 8.2,
amending an inadvertent error to an inaccurate cross-reference and
deleting an obsolete provision that is no longer relevant to the
Exchange rules and User functionality.
---------------------------------------------------------------------------
\5\ See Phlx Rule 1081(c); ISE Rule 804(e); MRX Rule 804(e); and
GEMX Rule 804(e). See also Securities Exchange Act Release No. 83209
(May 10, 2018), 83 FR 22717 (May 16, 2018) (SR-Phlx-2018-22) (Order
Granting Approval of Proposed Rule Change to Amend Phlx's Quoting
Requirements, Among Other Changes) (SR-Phlx-2018-22).
\6\ The Exchange notes that BZX Options and EDGX Options are
simultaneously proposing the same continuous quoting requirements.
---------------------------------------------------------------------------
Specifically, the Exchange proposes to amend a Market-Maker's
continuous quoting obligations under Rule 8.6(d) based on existing
Phlx, ISE, MRX and GEMX rules, previously filed with the Commission.
The proposed amendments to Rule 8.2(d) are substantially similar to the
continuous quoting requirement provisions on other exchanges.\7\
Current Rule 8.6(d) provides that a Market-Maker must enter continuous
bids and offers in series in its appointed classes on a daily basis in
60% of the series of each appointed class for 90% of the trading day.
The proposed rule change to Rule 8.6(d) requires a Market-Maker to
continuously enter bids and offers in series in its appointed classes
(pursuant to Rule 8.6(b)) in 60% of the cumulative number of seconds,
or such higher percentage as the Exchange may announce in advance, for
which that Market-Maker's appointed classes are open, excluding any
adjusted series, any intra-day add-on series on the day during which
such series are added for trading, any Quarterly Option Series and any
series with an expiration of greater than 270 days. Additionally, the
proposed change amends current subparagraph (d)(2) to provide for the
way in which the Exchange calculates this requirement and is explicit
in stating that quoting is not required in every appointed class. An
example of the proposed calculation is presented below:
---------------------------------------------------------------------------
\7\ See supra note 5.
Market-Maker A (``Firm A'') \8\ has selected an appointment to
quote option class U, in which options U1, U2, U3, U4, and U5 are
open for trading.
---------------------------------------------------------------------------
\8\ The Exchange notes that a Market-Maker may use multiple
Executing Firm IDs (``EFIDs'') to submit quotes in a class. The
quoting time from all of a Market-Maker EFIDs' will be considered
together when determining compliance with this obligation.
---------------------------------------------------------------------------
Firm A also has selected appointments in options classes V and
W.
Option U1 opened at 09:30:00 \9\ and closed at 16:00:00
---------------------------------------------------------------------------
\9\ All times in example calculation in Eastern Time.
---------------------------------------------------------------------------
Firm A quoted U1 at 09:35:30 @13.00(10)-15.00(10)
Firm A updated quote in U1 at 09:50:31 @10.00(10)-15.00(20)
Firm A purged quote at 15:55:40
Total quoted time for U1 is: 15:55:40-09:35:30 = (15-9) * 3600 +
(55-35) * 60 + (40-30) = 22810 (seconds)
Total available quote time for U1 is: 16:00:00-09:30:00 = (16-9) *
3600 + (60-30) * 60 + (00-00) = 270000 (seconds)
Option U2 opened at 09:30:00 and closed at 16:00:00
Firm A quoted U2 at 10:05:30 @13.00(10)-15.00(10)
Firm A updated quote in U2 at 11:00:01 @11.00(10)-16.00(20)
Firm A purged quote at 15:05:40
Total quoted time for U2 is: 15:05:40-10:05:30 = (15-10) * 3600 +
(65-05) * 60 + (40-30) = 21610 (seconds)
Total available quote time for U2 is: 16:00:00-09:30:00 = (16-9) *
3600 + (60-30) * 60 + (00-00) = 27000 (seconds)
Option U3 opened at 09:30:00 and closed at 16:15:00
Firm A quoted U3 at 11:10:21 @21.00(10)-24.00(20)
Firm A purged quote at 15:15:05
Total quoted time for U3 is: 15:15:05-11:10:21 = (15-11) * 3600 +
(75-10) * 60 + (65-21) = 18344 (seconds)
Total available quote time for U3 is: 16:01:20-09:40:02 = (16-9) *
3600 + (75-30) * 60 + (00-00) = 27900 (seconds)
Option U4 opened at 9:30:00 and closed at 16:00:00
Firm A quoted U4 at 09:34:29 @35.00(10)-37.00(10)
[[Page 17895]]
Firm A updated quote in U4 at 10:30:21 @31.00(10)-37.00(20)
Firm A purged quote in U4 at 15:59:34
Total quoted time for U4 is: 15:59:34-09:34:29 = (15-09) * 3600 +
(59-34) * 60 + (34-29) = 23105 (seconds)
Total available quote time is: 16:00:00-09:30:00 = (16-9) * 3600 +
(60-30) * 60 + (00-0) = 27000 (seconds)
Option U5 opened at 9:30:00 and closed at 16:00:00
Firm A did not quote U5 thus, the total quoted time for U5 will be:
0 (seconds)
Total available quote time is: 16:00:00-09:30:00 = (16-9) * 3600 +
(60-30) * 60 + (00-00) = 27000 (seconds)
Total time Firm A quoted class U: 22810 + 21610 + 18344 + 23105 + 0
= 85869 (seconds)
Total eligible quoting time for Firm A on class U: 27000 + 27000 +
27900 + 27000 + 27000 = 135900 (seconds)
Similarly assume:
Total time for Firm A quoted class V: 80983 (seconds)
Total eligible quoting time for Firm A on class V: 84515 (seconds)
Total time for Firm A quoted class W: 0 (seconds)
Total eligible quoting time for Firm A on underlying W: 46513
(seconds)
Then the total quoting percentage for Firm A is: (85869 + 80983 +
0)/(135900 + 84515 + 46513) = 156852/266928 = 62.5%
As stated, the current rule requires a Market-Maker to quote 60% of
the series in which it is registered for 90% of each trading day. By
comparison, the proposed rule change permits a Market-Maker to quote
any percentage of appointed classes so long as the Market-Maker meets
the requirement that it enters quotes aggregating 60% of the cumulative
seconds across the total seconds that its appointment classes are open
for trading. The proposed rule explicitly provides that a Market-Maker
does not necessarily have to quote every appointed class. The Exchange
believes the proposed rule better accommodates the occasional issues
that may arise in a particular class, whether technical or manual. For
example, an issue may arise on the Market-Maker's side in which there
is a glitch in its systems or a manual computing error that temporarily
disrupts quoting ability. The Exchange notes that the existing
requirement may at times discourage liquidity in particular classes
because a Market-Maker is forced to focus on a momentary technical
lapse in order to meet the higher current thresholds, rather than using
the appropriate resources to focus on the classes that need and consume
additional liquidity. The proposed rule also adds language that the
Exchange may announce in advance a higher percentage than the proposed
60% of the cumulative number of seconds requirement, which the Exchange
believes may be appropriate on occasions when doing so would be in the
interest of a fair and orderly market. This discretion is the same in
the corresponding rules of Phlx, ISE, MRX, and GEMX,\10\ as well as
within the continuous quoting requirements of the Exchanges' affiliated
exchanges, BZX Options and EDGX Options. The proposed rule change also
moves the series excluded from a Market-Maker's quoting requirement to
Rule 8.6(d) and deletes this same language that is currently in
subparagraph (d)(3). The proposed change also amends the current
quoting exclusion of any series with an expiration of nine months or
greater to an expiration of greater than 270 days. The Exchange notes
that Market-Makers generally already monitor expirations by a defined
count of 270 days, as opposed to a nine month count in which the number
of days continuously varies. Therefore, this proposed change intends to
align the Exchange's rules with current industry practice.\11\ The
proposed rule change also amends the current quoting exclusions to
include Quarterly Option series. C2 may list and trade Quarterly
Options Series pursuant to Rule 5.5(e) and this exclusion is consistent
with corresponding Rule 22.6 (Market Maker Quotations) of the
Exchange's affiliated exchanges, BZX Options and EDGX Options,\12\ as
well as the corresponding rules of Phlx, ISE, MRX, and GEMX.\13\
Additionally, the proposed rule change amends the reference to the
quoting standard in subparagraph (d)(1) to 60%.
---------------------------------------------------------------------------
\10\ See supra note 5.
\11\ The Exchange notes that EDGX Options and BZX Options are
simultaneously proposing to amend their corresponding rules to
exclude any series with an expiration of 270 days or greater.
\12\ See Securities Exchange Act Release No. 71129 (December 18,
2013), 78 FR 77736 (December 18, 2013) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Modify BATS
Options Market Maker Continuous Quoting Obligation Rules) (SR-BATS-
2013-062), which adopted exclusions, including Quarterly Options
series, to Market Maker's quoting obligations and noted that such
exclusions were ``consistent with the rules of several other options
exchanges'' and ``did not diminish the quoting obligation''. The
Exchange also notes that these exclusions were adopted on EDGX
Options when that exchange was established.
\13\ See supra note 5.
---------------------------------------------------------------------------
As stated, the Exchange amends its continuous quoting requirements
to be substantially similar to the requirements under other exchanges'
rules.\14\ The Exchange believes that proposed amendments to its
quoting requirements are reasonable because these requirements are
already in place on other options exchanges.\15\ The Exchange notes
that the proposed change to continuous quoting requirements creates a
clear, affirmative Market-Maker obligation to hold themselves out as
willing to buy and sell securities for their own account on a
continuous basis, which justifies favorable Market-Maker treatment and
will continue to provide customer trading interest a net benefit. The
Exchange further believes having consistent with other exchanges \16\
will simplify the regulatory requirements for its Trading Permit
Holders (``TPHs'') that are active across multiple exchanges.
---------------------------------------------------------------------------
\14\ See supra note 5.
\15\ See supra note 6. The same quoting requirements will be
incorporated into EDGX Options and BZX Options rules.
\16\ Id.
---------------------------------------------------------------------------
Additionally, the Exchange proposes to make non-substantive changes
to Rule 8.2. First, the Exchange proposes to amend an inadvertent
mistake regarding a cross reference within Rule 8.2(d). Currently, Rule
8.2 states that the Exchange may limit the number of appointments a
Market-Maker may have, or the number of Market-Makers that may have
appointments in a class, pursuant to Rule 8.1(b). The Exchange notes,
however, that Rule 8.1(c), in fact, is the appropriate provision that
allows the Exchange to limit the number of appointments. The Exchange
believes this change is necessary to correct an inadvertent error in
its rule and provide clarity for TPHs. Furthermore, the Exchange
proposes to delete Rule 8.2(c), which currently states that a Market-
Maker's appointment in a class confers the right of the Market-Maker to
quote (using order functionality) in that class. The Exchange notes
that it recently discontinued this order functionality and implemented
``bulk messaging'' quoting functionality that is available to all
Users, including Market-Makers.\17\ As a result, there is no longer a
specific quote functionality available only to Market-Makers, therefore
the Exchange believes this provision is no longer necessary. This is
also consistent with the rule of its affiliated exchanges, BZX Options
and EDGX Options. In line with this proposed deletion, the Exchange
changes current Rule 8.2(d) to proposed Rule 8.2(c).
---------------------------------------------------------------------------
\17\ See Securities Exchange Act Release No. 85038 (February 1,
2019), 84 FR 2598 (February 7, 2019) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Discontinue Bulk Order
Functionality and Implement Bulk Message Functionality) (SR-C2-2018-
025). C2 Rule 1.1.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the
[[Page 17896]]
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.\18\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \19\ 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) \20\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(5).
\20\ Id.
---------------------------------------------------------------------------
In particular, the Exchange believes the proposed rule change to
amend Market-Makers' continuous quoting obligations will remove
impediments to and perfect the mechanism of a free and open market and
a national market system. The proposed rule change to a Market-Maker's
continuous quoting obligations seeks to conform the quoting obligations
to that of the rules of other exchanges.\21\ The Exchanges currently
requires a Market-Maker to quote in at least 60% the options series in
which the Market-Maker is registered during 90% of the trading day. The
Exchange believes that applying a Market-Maker's cumulative quoting
time to the Market-Maker's aggregate appointed classes to meet a
threshold of 60% of the cumulative seconds its appointed classes are
open for trading (like that of the current requirements on other
exchanges) is less stringent than the Exchange's current requirement
because of the lower quoting time threshold and because the proposed
requirement does not consider a percentage of its appointed classes, so
long as the overall 60% time requirement is met. Further, the Exchange
notes that the current continuous quoting requirement potentially
discourages liquidity at times when a Market-Maker is forced to focus
on making up for a momentary lapse in a particular class rather than
allocating appropriate resources to focus on the classes that need and
consume additional liquidity, and then allowing a Market-Maker to
continue quoting in the class that experienced a lapse after correcting
the applicable issue.\22\ The Exchange believes that this rule change
better accommodates these occasional lapses, whether technical or
manual, and enables a Market-Maker to provide appropriate liquidity
commensurate with the needs of its appointed classes. Moreover, the
Exchange believes that it can better attract Market-Makers, add
liquidity, and grow its market to the benefit of all investors, if its
quoting obligation is more in line with that of other exchanges. The
proposed rule change supports the quality of the Exchange's market by
helping to ensure that Market-Makers will continue to be obligated to
quote in a percentage of their appointed classes. Ultimately, the
benefit the proposed rule change confers upon Market-Makers is offset
by the continued responsibilities to provide significant liquidity to
its appointed classes to the benefit of all market participants. The
Exchange believes that the proposed change to continuous quoting
requirements creates a clear, affirmative Market-Maker obligation to
hold themselves out as willing to buy and sell securities for their own
account on a continuous basis, which justifies favorable Market-Maker
treatment and will continue to provide customer trading interest a net
benefit. The Exchange further notes that the proposed rule text is
consistent with the Act because the quoting obligations are
substantially the same as quoting obligations on Phlx, ISE, MRX, and
GEMX today, previously filed with the Commission.\23\ Additionally, the
Exchange notes that the proposed rule change including Quarterly Option
series among the series excluded from quoting obligations is intended
to harmonizing series excluded across the Exchange and its affiliated
exchanges,\24\ as well as other exchanges,\25\ which will provide
clarity for Market-Makers participating across multiple exchanges.
Furthermore, the Exchange believes the proposed rule change excluding
any series with an expiration greater than 270 days, as opposed to nine
months or greater, from a Market-Maker's quoting obligations is in line
with the way in which Market-Makers currently monitor expiration. As a
result, the Exchange believes that this change will foster cooperation
and coordination with persons engaged in regulating securities, as well
as facilitating transactions in securities. The proposed change will
reduce confusion by codifying an industry practice already in place and
harmonizing expiration time across the Exchange and its affiliated
exchanges.\26\ The Exchange also notes that the proposed changes are
reasonable and do not affect investor protection because the proposed
changes do not present any novel or unique issues, as they have either
been previously filed with the Commission or are codifying an industry
practice currently in place.
---------------------------------------------------------------------------
\21\ See supra note 5.
\22\ See also Exchange Rule 8.6(d)(1). The Exchange already
accounts for technical failure or limitation due to the automated
trading system the Exchange uses for the trading of option contracts
(``System'').
\23\ See supra note 5.
\24\ See BZX Options Rule 22.6 and EDGX Options Rule 22.6.
\25\ See supra note 5.
\26\ See supra note 9.
---------------------------------------------------------------------------
Moreover, the Exchange believes that the amendment to the cross-
reference in current Rule 8.2(d) (proposed Rule 8.2(c)) corrects an
inadvertent cross-reference error and that the proposed deletion of
Rule 8.2(c) updates its rules to reflect the recent discontinuation of
the order functionality referenced in Rule 8.2(c) and implementation of
bulk messaging functionality, which allows all Users, including Market-
Makers, to enter quotes. As a result, these changes provide clarity and
reduce confusion for investors.
Additionally, the Exchange believes the proposed rule change is
consistent with Section 6(b)(1) of the Act,\27\ which provides that the
Exchange be organized and have the capacity to be able to carry out the
purposes of the Act and to enforce compliance by the Exchange's TPHs
and persons associated with its TPHs with the Act, the rules and
regulations thereunder, and the rules of the Exchange. The Exchange
notes that the proposed rule change to a Market-Maker's continuous
quoting requirements will serve to harmonize the quoting requirement
for Market-Makers across its affiliated exchanges, EDGX Options and BZX
Options that are also proposing substantially the same requirements.
The Exchange thus believes these proposed changes create uniformity,
which allows for the Exchange to organize across affiliated exchanges
and to more easily enforce compliance by participants on multiple
affiliated exchanges.
---------------------------------------------------------------------------
\27\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------
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 believes that
the proposed rule change to a Market-Maker's continuous quoting
requirements under
[[Page 17897]]
Rule 8.6 does not affect intramarket competition. The proposed applies
an affirmative obligation to all Market-Makers to hold themselves out
as continuously willing to buy and sell options for their own account,
justifying favorable treatment and benefitting the trading interest of
all customers. The Exchange believes that the proposed change to
continuous quoting requirements does not affect intermarket
competition, as this proposal is based on other exchanges' rules
previously filed with the Commission.\28\ The Exchange also notes that
to the degree that other exchanges have varying continuous quoting
obligations for Market-Makers, market participants on other exchanges
are welcome to become Market-Makers on C2 if they determine that this
proposed rule change has made market making on C2 more attractive or
favorable. Finally, the Exchange believes that the proposed rule change
will relieve any burden on market participants because it serves to
provide Market-Makers with affirmative quoting requirements that ensure
each appointed class will receive appropriate liquidity to the benefit
of all market participants who interact with that liquidity.
---------------------------------------------------------------------------
\28\ See supra note 5.
---------------------------------------------------------------------------
Additionally, the proposed rule change to amend Rule 8.2 does not
address competitive issues, but rather, as discussed above, is merely
intended to correct an inadvertent uses of an inaccurate cross-
reference, as well as delete an obsolete provision, which will
alleviate potential confusion.
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:
A. Significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. 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 \29\ and
Rule 19b-4(f)(6) \30\ 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.
---------------------------------------------------------------------------
\29\ 15 U.S.C. 78s(b)(3)(A).
\30\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
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-C2-2019-007 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-C2-2019-007. 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-C2-2019-007 and should be submitted on
or before May 17, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
---------------------------------------------------------------------------
\31\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-08398 Filed 4-25-19; 8:45 am]
BILLING CODE 8011-01-P
