Self-Regulatory Organizations; Cboe Exchange, Inc.; Order Approving a Proposed Rule Change To Allow $1 Strike Price Intervals Above $200 on Options on the QQQ and IWM Exchange-Traded Funds, 19823-19824 [2019-09148]
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Federal Register / Vol. 84, No. 87 / Monday, May 6, 2019 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has become effective pursuant to
Section 19(b)(3)(A) of the Exchange
Act 17 and Rule 19b–4(f)(6) 18
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.
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:
jbell on DSK3GLQ082PROD with NOTICES
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–
MSRB–2019–09 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–MSRB–2019–09. 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
17 15
18 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
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19:35 May 03, 2019
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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 MSRB. 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–MSRB–2019–09 and should
be submitted on or before May 28, 2019.
For the Commission, pursuant to delegated
authority.19
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–09146 Filed 5–3–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85754; File No. SR–CBOE–
2019–015]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Order Approving a
Proposed Rule Change To Allow $1
Strike Price Intervals Above $200 on
Options on the QQQ and IWM
Exchange-Traded Funds
April 30, 2019.
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See Securities Exchange Act Release No. 85295
(Mar. 12, 2019), 84 FR 9851 (‘‘Notice’’).
1 15
PO 00000
Frm 00071
I. Description of the Proposed Rule
Change
The Exchange’s current rules provide
that the interval between strike prices of
series of options on exchange-traded
funds may be $5.00 or greater where the
strike price is greater than $200,5 except
that the interval between strike prices of
series of options on SPY, IVV, and DIA
may be $1 or greater where the strike
price is greater than $200.6 The
Exchange proposes to expand that
exception, also allowing $1 strike price
intervals where the strike price is above
$200 for options on IWM7 and QQQ.8
The Exchange notes that ‘‘$1 intervals
already exist below the $200 price
point’’ for options on both ETFs, and
further notes ‘‘in the midst of current
price trends,’’ that ‘‘both QQQ and IWM
have consistently inclined in price
toward the $200 level.’’ 9 In light of this,
the Exchange ‘‘believes that continuing
to maintain the current $200 level
(above which intervals increase 500% to
$5), may have a negative effect on
investing, trading and hedging
opportunities, and volume’’ particularly
to the extent it impacts the ability of
market participants to roll their
positions once strike prices pass $200.10
Accordingly, in light of the ‘‘slower
movements of broad-based indices,’’ the
Exchange proposes to allow $1 strike
intervals above $200 so that options on
these two ETFs may be ‘‘more precisely
aligned with the smaller, longer-term
incremental increases in respective
underlying ETFs.’’ 11 In turn, the
exchange believes that its proposal will
‘‘permit strikes to be set to more closely
reflect the increasing values in the
5 See
On March 6, 2019, Cboe Exchange,
Inc. (‘‘Exchange’’ or ‘‘Cboe’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) 1 of the Securities
Exchange Act of 1934 (‘‘Act’’) 2 and Rule
19b–4 thereunder,3 a proposed rule
change to allow Cboe to list QQQ and
IWM options with $1 strike price
intervals instead of $5 strike price
intervals when the strike price of the
option is greater than $200. The
proposed rule change was published for
comment in the Federal Register on
March 18, 2019.4 No comments on the
proposed rule change have been
received. This order approves the
proposed rule change.
Fmt 4703
Sfmt 4703
19823
Interpretation and Policy .08(a) to Rule 5.5.
id.
7 According to the Exchange, IWM is an indexbased ETF designed to track the price and
performance of the Russell 2000 Index (‘‘RUT’’),
which represents the small capitalization sector of
the U.S. equity market, and the value of IWM is
designed to approximate 1⁄10 the value of the
underlying RUT. See id. Cboe states that IWM is
among the most actively traded ETFs on the market.
See id.
8 According to the Exchange, the QQQ is designed
to closely track the price and performance of a the
Nasdaq-100 Index (‘‘NDX’’), which represents the
largest and most active non-financial domestic and
international issues listed on The Nasdaq Stock
Market based on market capitalization, and the
value of QQQ is designed to approximate 1⁄40 the
value of the underlying NDX. See Notice, supra
note 4, 84 FR at 9852. The Exchange states that
QQQ is among the most actively traded ETFs on the
market. See id.
9 Id.
10 Id. For example, the Exchange notes that ‘‘to
move a position from a $200 strike to a $205 strike
under the current rule, an investor would need for
the underlying product to move 2.5%’’ whereas
rolling an open position from a $200 to a $201
strike represents ‘‘only a 0.5% move for the
underlying.’’ Id.
11 Id.
6 See
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06MYN1
19824
Federal Register / Vol. 84, No. 87 / Monday, May 6, 2019 / Notices
underlying indices and allow investors
and traders to roll open positions from
a lower strike to a higher strike in
conjunction with the price movements
of the underlying ETFs.’’ 12
Cboe acknowledges that allowing
series of QQQ and IWM options to be
listed in $1 intervals between strike
prices over $200 likely would increase
the total number of options series
available on the Exchange, but
represents that: (1) It and the Options
Price Reporting Authority (‘‘OPRA’’)
have the necessary systems capacity to
handle any potential additional traffic
associated with this proposed rule
change; (2) Trading Permit Holders
would not have a capacity issue; and (3)
the proposed expansion would not
cause fragmentation of liquidity but, by
providing more trading opportunities to
market participants, instead would
increase both available liquidity as well
as price efficiency.13
In approving this proposal, the
Commission notes that the Exchange
has represented that it and OPRA have
the necessary systems capacity to
handle the potential additional traffic
associated with this proposed rule
change.17 The Exchange further stated
that it believes its members will not
have a capacity issue as a result of the
proposal and that it does not believe
this expansion will cause fragmentation
of liquidity.18
III. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act 19 that the
proposed rule change (SR–CBOE–2019–
015) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–09148 Filed 5–3–19; 8:45 am]
II. Discussion and Commission
Findings
BILLING CODE 8011–01–P
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.14 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,15 which requires,
among other things, that the rules of a
national securities exchange be
designed to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. The Commission
believes that the proposed change
accommodates the current levels of the
respective indexes tracked by QQQ and
IWM. In particular, permitting $1 strikes
above $200 in such ETFs may provide
the investing public and other market
participants with more flexibility in
their investment and hedging decisions
in QQQ and IWM options and is
consistent with past precedent for other
similar ETFs that track broad-based
indexes.16
SMALL BUSINESS ADMINISTRATION
12 Id.
id. at 9852–3
approving the proposed rule change, the
Commission has considered its impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
15 15 U.S.C. 78f(b)(5).
16 See, e.g., Securities Exchange Act Release Nos.
72949 (Aug. 29, 2014), 79 FR 53089 (Sept. 5, 2014)
(SR–Phlx–2014–46) (Order Granting Approval of
Proposed Rule Change, as Modified by Amendment
National Women’s Business Council;
Notice of Public Meeting
Small Business Administration,
National Women’s Business Council.
ACTION: Notice of open public meeting.
AGENCY:
The public meeting will be held
on Friday, May 17, 2019 from 9:30 a.m.
to 12:30 p.m. EST.
ADDRESSES: The meeting will be held at
the Women Presidents’ Organization
Headquarters located at 155 E 55th
Street, Suite 4H, New York, NY 10022.
FOR FURTHER INFORMATION CONTACT: The
meeting is open to the public; however,
advance notice of attendance is
requested. To RSVP or submit a written
comment, the general public should
email Ashley Judah at Ashley.Judah@
sba.gov with subject line—‘‘Response
for 5/17/19 Public Meeting.’’ The
agenda will allow for 20 minutes of
public statements. This time will be
awarded in 4-minute increments to the
first 5 people who confirm attendance
and request to speak. All other
submitted statements will be included
in the meeting record.
A conference line will be available for
those unable to attend the meeting.
DATES:
13 See
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14 In
VerDate Sep<11>2014
19:35 May 03, 2019
Jkt 247001
No. 1, Relating to SPY and DIA Options); and 72664
(Jul. 24, 2014), 79 FR 44231 (Jul. 30, 2014) (Notice
of Filing of Proposed Rule Change, as Modified by
Amendment No. 1, Relating to SPY and DIA
Options).
17 See note 13 supra, and accompanying text.
18 See id.
19 15 U.S.C. 78f(b)(2).
20 17 CFR 200.30–3(a)(12).
PO 00000
Frm 00072
Fmt 4703
Sfmt 4703
Please call 1–208–391–5817 at the
aforementioned event time. When
prompted, enter conference ID number
93326369. For more information, please
visit the NWBC website at
www.nwbc.gov or call 202–205–3850.
SUPPLEMENTARY INFORMATION: Pursuant
to section 10(a)(2) of the Federal
Advisory Committee Act (5 U.S.C.,
Appendix 2), the National Women’s
Business Council (NWBC) announces its
second public meeting of Fiscal Year
2019. The 1988 Women’s Business
Ownership Act established NWBC to
serve as an independent source of
advice and policy recommendations to
the President, Congress, and the
Administrator of the U.S. Small
Business Administration (SBA) on
issues of importance to women
entrepreneurs.
This meeting will allow the newly
formed Council to share its vision for
the remainder of the fiscal year. Each of
the Council’s three subcommittees
(Rural Women’s Entrepreneurship,
Women in S.T.E.M., and Access to
Capital & Opportunity) will present
their current priorities and initiatives to
the full body.
Dated: April 30, 2019.
Nicole Nelson,
Committee Management Officer (Acting).
[FR Doc. 2019–09140 Filed 5–3–19; 8:45 am]
BILLING CODE 8025–01–P
TENNESSEE VALLEY AUTHORITY
Agency Information Collection
Activities: Proposed Collection;
Comment Request
Tennessee Valley Authority.
30-Day notice of submission of
information collection approval and
request for comments.
AGENCY:
ACTION:
This is a renewal request for
approval of the Application for Section
26a Permit (OMB No. 3316–0060). The
information collection described below
will be submitted to the Office of
Management and Budget (OMB) at,
oira_submission@omb.eop.gov, for
review, as required by the Paperwork
Reduction Act of 1995. The Tennessee
Valley Authority is soliciting public
comments on this proposed collection.
DATES: Comments should be sent to the
TVA Senior Privacy Program Manager
and the OMB Office of Information &
Regulatory Affairs, Attention: Desk
Officer for Tennessee Valley Authority,
Washington, DC 20503, or email: oira_
submission@omb.eop.gov, no later than
June 5, 2019.
SUMMARY:
E:\FR\FM\06MYN1.SGM
06MYN1
]]>Agencies
[Federal Register Volume 84, Number 87 (Monday, May 6, 2019)]
[Notices]
[Pages 19823-19824]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09148]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85754; File No. SR-CBOE-2019-015]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Order
Approving a Proposed Rule Change To Allow $1 Strike Price Intervals
Above $200 on Options on the QQQ and IWM Exchange-Traded Funds
April 30, 2019.
On March 6, 2019, Cboe Exchange, Inc. (``Exchange'' or ``Cboe'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934
(``Act'') \2\ and Rule 19b-4 thereunder,\3\ a proposed rule change to
allow Cboe to list QQQ and IWM options with $1 strike price intervals
instead of $5 strike price intervals when the strike price of the
option is greater than $200. The proposed rule change was published for
comment in the Federal Register on March 18, 2019.\4\ No comments on
the proposed rule change have been received. This order approves the
proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
\4\ See Securities Exchange Act Release No. 85295 (Mar. 12,
2019), 84 FR 9851 (``Notice'').
---------------------------------------------------------------------------
I. Description of the Proposed Rule Change
The Exchange's current rules provide that the interval between
strike prices of series of options on exchange-traded funds may be
$5.00 or greater where the strike price is greater than $200,\5\ except
that the interval between strike prices of series of options on SPY,
IVV, and DIA may be $1 or greater where the strike price is greater
than $200.\6\ The Exchange proposes to expand that exception, also
allowing $1 strike price intervals where the strike price is above $200
for options on IWM\7\ and QQQ.\8\
---------------------------------------------------------------------------
\5\ See Interpretation and Policy .08(a) to Rule 5.5.
\6\ See id.
\7\ According to the Exchange, IWM is an index-based ETF
designed to track the price and performance of the Russell 2000
Index (``RUT''), which represents the small capitalization sector of
the U.S. equity market, and the value of IWM is designed to
approximate \1/10\ the value of the underlying RUT. See id. Cboe
states that IWM is among the most actively traded ETFs on the
market. See id.
\8\ According to the Exchange, the QQQ is designed to closely
track the price and performance of a the Nasdaq-100 Index (``NDX''),
which represents the largest and most active non-financial domestic
and international issues listed on The Nasdaq Stock Market based on
market capitalization, and the value of QQQ is designed to
approximate \1/40\ the value of the underlying NDX. See Notice,
supra note 4, 84 FR at 9852. The Exchange states that QQQ is among
the most actively traded ETFs on the market. See id.
---------------------------------------------------------------------------
The Exchange notes that ``$1 intervals already exist below the $200
price point'' for options on both ETFs, and further notes ``in the
midst of current price trends,'' that ``both QQQ and IWM have
consistently inclined in price toward the $200 level.'' \9\ In light of
this, the Exchange ``believes that continuing to maintain the current
$200 level (above which intervals increase 500% to $5), may have a
negative effect on investing, trading and hedging opportunities, and
volume'' particularly to the extent it impacts the ability of market
participants to roll their positions once strike prices pass $200.\10\
---------------------------------------------------------------------------
\9\ Id.
\10\ Id. For example, the Exchange notes that ``to move a
position from a $200 strike to a $205 strike under the current rule,
an investor would need for the underlying product to move 2.5%''
whereas rolling an open position from a $200 to a $201 strike
represents ``only a 0.5% move for the underlying.'' Id.
---------------------------------------------------------------------------
Accordingly, in light of the ``slower movements of broad-based
indices,'' the Exchange proposes to allow $1 strike intervals above
$200 so that options on these two ETFs may be ``more precisely aligned
with the smaller, longer-term incremental increases in respective
underlying ETFs.'' \11\ In turn, the exchange believes that its
proposal will ``permit strikes to be set to more closely reflect the
increasing values in the
[[Page 19824]]
underlying indices and allow investors and traders to roll open
positions from a lower strike to a higher strike in conjunction with
the price movements of the underlying ETFs.'' \12\
---------------------------------------------------------------------------
\11\ Id.
\12\ Id.
---------------------------------------------------------------------------
Cboe acknowledges that allowing series of QQQ and IWM options to be
listed in $1 intervals between strike prices over $200 likely would
increase the total number of options series available on the Exchange,
but represents that: (1) It and the Options Price Reporting Authority
(``OPRA'') have the necessary systems capacity to handle any potential
additional traffic associated with this proposed rule change; (2)
Trading Permit Holders would not have a capacity issue; and (3) the
proposed expansion would not cause fragmentation of liquidity but, by
providing more trading opportunities to market participants, instead
would increase both available liquidity as well as price
efficiency.\13\
---------------------------------------------------------------------------
\13\ See id. at 9852-3
---------------------------------------------------------------------------
II. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\14\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\15\ which
requires, among other things, that the rules of a national securities
exchange be designed to promote just and equitable principles of trade,
to prevent fraudulent and manipulative acts, to remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest. The Commission believes that the proposed change accommodates
the current levels of the respective indexes tracked by QQQ and IWM. In
particular, permitting $1 strikes above $200 in such ETFs may provide
the investing public and other market participants with more
flexibility in their investment and hedging decisions in QQQ and IWM
options and is consistent with past precedent for other similar ETFs
that track broad-based indexes.\16\
---------------------------------------------------------------------------
\14\ In approving the proposed rule change, the Commission has
considered its impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\15\ 15 U.S.C. 78f(b)(5).
\16\ See, e.g., Securities Exchange Act Release Nos. 72949 (Aug.
29, 2014), 79 FR 53089 (Sept. 5, 2014) (SR-Phlx-2014-46) (Order
Granting Approval of Proposed Rule Change, as Modified by Amendment
No. 1, Relating to SPY and DIA Options); and 72664 (Jul. 24, 2014),
79 FR 44231 (Jul. 30, 2014) (Notice of Filing of Proposed Rule
Change, as Modified by Amendment No. 1, Relating to SPY and DIA
Options).
---------------------------------------------------------------------------
In approving this proposal, the Commission notes that the Exchange
has represented that it and OPRA have the necessary systems capacity to
handle the potential additional traffic associated with this proposed
rule change.\17\ The Exchange further stated that it believes its
members will not have a capacity issue as a result of the proposal and
that it does not believe this expansion will cause fragmentation of
liquidity.\18\
---------------------------------------------------------------------------
\17\ See note 13 supra, and accompanying text.
\18\ See id.
---------------------------------------------------------------------------
III. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\19\ that the proposed rule change (SR-CBOE-2019-015) be, and hereby
is, approved.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78f(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-09148 Filed 5-3-19; 8:45 am]
BILLING CODE 8011-01-P
