Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend Rule 6.11, 25086-25089 [2019-11238]
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Federal Register / Vol. 84, No. 104 / Thursday, May 30, 2019 / Notices
with the requirements of 39 CFR
3007.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3010, and 39
CFR part 3020, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3015, and
39 CFR part 3020, subpart B. Comment
deadline(s) for each request appear in
section II.
II. Docketed Proceeding(s)
1. Docket No(s).: CP2019–159; Filing
Title: Notice of the United States Postal
Service of Filing a Functionally
Equivalent Global Plus 1E Negotiated
Service Agreement and Application for
Non-Public Treatment of Materials Filed
Under Seal; Filing Acceptance Date:
May 23, 2019; Filing Authority: 39 CFR
3015.5; Public Representative:
Christopher C. Mohr; Comments Due:
June 3, 2019.
This Notice will be published in the
Federal Register.
Stacy L. Ruble,
Secretary.
[FR Doc. 2019–11256 Filed 5–29–19; 8:45 am]
BILLING CODE 7710–FW–P
POSTAL SERVICE
Product Change—Priority Mail Express
Negotiated Service Agreement
Postal ServiceTM.
Notice.
AGENCY:
ACTION:
it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Express Contract 76 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2019–142, CP2019–157.
Elizabeth Reed,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2019–11214 Filed 5–29–19; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
Product Change—Priority Mail and
First-Class Package Service
Negotiated Service Agreement
Postal ServiceTM.
Notice.
AGENCY:
ACTION:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice: May 30,
2019.
FOR FURTHER INFORMATION CONTACT:
Elizabeth Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on May 21, 2019,
it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail & First-Class Package
Service Contract 101 to Competitive
Product List. Documents are available at
www.prc.gov, Docket Nos. MC2019–141,
CP2019–156.
SUMMARY:
Elizabeth Reed,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2019–11217 Filed 5–29–19; 8:45 am]
BILLING CODE 7710–12–P
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice: May 30,
2019.
FOR FURTHER INFORMATION CONTACT:
Elizabeth Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on May 22, 2019,
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SUMMARY:
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85931; File No. SR–C2–
2019–011]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend Rule
6.11
May 23, 2019.
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00059
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 6.11. 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 proposed rule change makes
enhancements to the Exchange’s
opening auction process. The Exchange
recently adopted an opening auction
process, which the Exchange intends to
implement on June 17, 2019.5 The
Exchange intends to implement the
3 15
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
1 15
notice is hereby given that on May 16,
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.
Fmt 4703
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U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release No. 85788
(May 6, 2019), 84 FR 20673 (May 10, 2019), SR–
C2–2019–009. The changes in SR–C2–2019–009 are
currently effective but not yet operative; however,
the proposed rule text in this rule filing assume
operativeness of those effective changes.
4 17
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Federal Register / Vol. 84, No. 104 / Thursday, May 30, 2019 / Notices
enhancements proposed in this rule
filing at that time.
First, the proposed rule change
amends the definition of Composite
Market in Rule 6.11(a). The term
‘‘Composite Market’’ means the market
for a series comprised of (1) the higher
of the then-current best appointed
Market-Maker bulk message bid on the
Queuing Book and the away best bid
(‘‘ABB’’) (if there is an ABB) and (2) the
lower of the then-current best appointed
Market-Maker bulk message offer on the
Queuing Book and the away best offer
(‘‘ABO’’) (if there is an ABO).6 The
Queuing Book means the book into
which Users may submit orders and
quotes (and onto which good-tilcancelled and good-til-day orders
remaining on the Book from the
previous trading session or trading day,
as applicable, are entered) during the
Queuing Period for participation in the
applicable opening rotation. The
Queuing Period means the time period
prior to the initiation of an opening
rotation during which the System
accepts orders and quotes for
participation in the opening rotation for
the applicable trading session.
Therefore, in an All Sessions Class (i.e.,
a class that trades during both the
Global Trading Hours (‘‘GTH’’) and
Regular Trading Hours (‘‘RTH’’) trading
sessions), the Composite Market will be
based on the appointed Market-Maker
bulk message bids and offers in the RTH
Queuing Book (available from 7:30 a.m.
through the opening of trading). It
currently will not consider any
appointed Market-Maker bulk message
bids and offers in that class in the GTH
book (on which trading will be
occurring in that class from 8:30 a.m.
through 9:15 a.m.).
Market-Makers are generally
responsible for pricing the markets in
their appointed classes, which is why
the Exchange considers Market-Makers’
bulk message bids and offers when
determining the Composite Market in
connection with the opening auction
process. For that reason, the price
protection measures applied during the
opening auction process (the Maximum
Composite Width check and the
Opening Collar) are based on the
Composite Market. The Exchange
believes it would be beneficial, and may
lead to more accurate pricing during the
opening auction process, for the
Composite Market to be used for the
RTH opening auction process to
incorporate all available bulk message
bids and offers from appointed MarketMakers, including any in the GTH book.
6 The term ‘‘Composite Bid (Offer)’’ means the bid
(offer) used to determine the Composite Market.
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Therefore, the proposed rule change
amends the definition of Composite
Market to provide that it will be
comprised of the higher (lower) of the
then-current best appointed MarketMaker bulk message bid (offer) on the
Exchange (which includes both the RTH
Queuing Book and the GTH book),
rather than just the Queuing Book.
Second, the proposed rule change
amends Rule 6.11(e)(1) to provide that
a series is not eligible to open if the
Composite Market is crossed (i.e., the
Composite Bid is higher than the
Composite Offer). A series will be
eligible to open if the Composite Width
is less than or equal to the Maximum
Composite Width, or is greater than the
Maximum Composite Width but there
are no non-M Capacity market orders or
buy (sell) limit orders with prices higher
(lower) than the Composite Bid (Offer)
and no orders or quotes marketable
against each other (i.e., locked or
crossed).7 The Maximum Composite
Width Check is a price protection
measure intended to prevent orders
from executing at extreme prices at the
open. A crossed market is generally
unreliable, and opening with a crossed
Composite Market may create price risk
for any executions that may occur
during the opening rotation (pursuant to
subparagraph (e)(3)). Therefore, the
proposed rule change enhances the
Maximum Composite Width check price
protection to provide that the Composite
Market may not be crossed for a series
to be eligible to open.
Third, the proposed rule change
harmonizes how the opening auction
process will be used following all
trading halts. Current Rule 6.11(g)
provides that if there is a Regulatory
Halt,8 the Queuing Period begins
immediately when the Exchange halts
trading in the class. If the Exchange
declares any other type of halt in a class
(i.e., a non-Regulatory Halt), there will
be no Queuing Period. Additionally, if
there is a Regulatory Halt, the System
queues a User’s open orders or quotes,
unless the User entered instructions to
cancel its open resting orders and
quotes, but if there is a non-Regulatory
Halt, the System cancels a User’s open
orders and quotes. The Exchange has
determined to eliminate the distinction
between how the opening auction
7 The proposed rule change makes a
nonsubstantive change to this language in Rule
6.11(e)(1)(B). Once a series satisfies the conditions
in the Maximum Composite Width Check, the
System will determine an Opening Trading Price
pursuant to Rule 6.11(e)(2), and then open the
series pursuant to Rule 6.11(e)(3).
8 If the primary market for the applicable
underlying security declares a regulatory trading
halt, suspension, or pause with respect to such
security, it is referred to as a ‘‘Regulatory Halt.’’
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25087
process applies following a Regulatory
Halt and a non-Regulatory Halt. The
proposed rule change provides that the
opening auction process following any
trading halt will apply in the manner it
currently applies following a Regulatory
Halt. In other words, following a nonRegulatory Halt, there will be a Queuing
Period during the trading halt.
Additionally, in the event of a nonRegulatory Halt, the System will queue
a User’s orders and quotes resting on the
book at the time of the trading halt for
participation in the opening rotation
following the trading halt, unless the
User entered instructions to cancels its
resting orders and quotes. This will
provide Users with the ability to decide
how its resting orders and quotes should
be handled in the event of a nonRegulatory Halt, as they are currently
able to do in the event of a Regulatory
Halt. The Exchange also believes
elimination of this distinction will
eliminate potential investor confusion
regarding how the System will handle
orders and quotes in the event of a
trading halt.9
Finally, the proposed rule change
makes several nonsubstantive changes
in Rule 6.11:
• The proposed rule change makes a
grammatical change in subparagraph
(b)(2).
• The proposed rule change adds the
word ‘‘process’’ in subparagraph
(b)(2)(E) after the term ‘‘opening
auction,’’ as it was inadvertently
omitted (throughout Rule 6.11, the
entire opening is referred to as the
‘‘opening auction process’’).
The proposed rule change updates
subparagraph (e)(2) to clarify when the
System will and will not be able to
determine an Opening Trade Price. The
System determines an Opening Trade
Price if there are orders and quotes
marketable against each other at a price
not outside the Opening Collar (this is
consistent with the current rule, which
states there is no Opening Trade Price
if there are no locked or crossed orders
or quotes (i.e., marketable orders and
quotes) at a price not outside the
Opening Collar). The proposed rule
change merely modifies the language,
which the Exchange believes is clearer,
and makes corresponding changes to the
paragraph numbering and lettering.
Additionally, the proposed rule change
adds the defined term ‘‘VMIM price’’,
which is the price determined by the
process described in current
subparagraphs (e)(2)(A)(i) through (iii)
(proposed subparagraphs (e)(2)(A)
through (3)). The proposed rule change
9 The proposed rule change also makes
nonsubstantive changes to paragraph (g).
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does not modify the process used to
determine that price.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.10 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 11 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 12 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the proposed revision to
the definition of Composite Market will
remove impediments to and perfect the
mechanism of a free and open market
and a national market system and
protect investors, because it will ensure
the price protection measures used
during the opening auction process,
which are based on the Composite
Market, for the RTH opening in an All
Sessions Class will incorporate all
available pricing information on the
Exchange from appointed MarketMakers in that class. The Exchange
believes this may lead to a more
accurate Opening Trade Price. The
proposed rule change to not open a
series if the Composite Market is
crossed will promote just and equitable
principles of trade and protect investors,
because crossed markets are generally
unreliable. The Exchange believes not
opening a series if the Composite
Market is crossed may reduce the risk of
erroneously priced executions during
the opening rotation. The proposed rule
change to harmonize the opening
auction process following all types of
trading halts will protect investors by
eliminating potential confusion
regarding how the Exchange will open
series following trading halts, and by
10 15
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12 Id.
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providing Users with flexibility
regarding how the System will handle
their orders and quotes following a nonRegulatory Halt (as they currently have
following a Regulatory Halt). The
proposed nonsubstantive changes will
benefit investors by providing
additional clarity to the Rules.
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
proposed rule change will not impose
any burden on intramarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
The proposed changes to the price
protection measures used during the
opening auction process will apply in
the same manner to all orders and
quotes of all Users. All Users will have
the same flexibility regarding how the
System will handle their orders and
quotes following non-Regulatory Halts,
which is the same flexibility currently
available to Users following Regulatory
Halts. If a User wants its orders and
quotes to be handled following a nonRegulatory Halt in the manner they are
today, that User can instruct the
Exchange to do so. The proposed rule
change will not impose any burden on
intermarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed changes to the price
protections used during the opening
auction process only impact how series
will open on the Exchange prior to the
opening of trading. The proposed
changes are intended to enhance the
price protections used during the
opening process and are not intended as
competitive changes, and to provide
Users with flexibility with respect to the
handling of their orders and quotes
following a non-Regulatory Halt. The
proposed nonsubstantive changes do
not impact trading, and thus have no
competitive impact; they merely
provide additional clarity to the Rules.
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 rule does not (i)
significantly affect the protection of
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investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
for 30 days from the date on which it
was filed, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, provided that the selfregulatory organization has given 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,13 the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 14 and
Rule 19b–4(f)(6) thereunder.15
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
C2–2019–011 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–C2–2019–011. 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
13 The
Exchange has satisfied this requirement.
U.S.C. 78s(b)(3)(A).
15 17 CFR 240.19b–4(f)(6).
14 15
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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–C2–2019–011 and should
be submitted on or before June 20, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–11238 Filed 5–29–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85924; File No. SR–OCC–
2019–803]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of Advance Notice
Concerning the Options Clearing
Corporation’s Proposal To Enter Into a
New Credit Facility Agreement
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May 23, 2019.
Pursuant to Section 806(e)(1) of Title
VIII of the Dodd-Frank Wall Street
Reform and Consumer Protection Act,
entitled Payment, Clearing and
Settlement Supervision Act of 2010
(‘‘Clearing Supervision Act’’) 1 and Rule
19b–4(n)(1)(i) 2 under the Securities
Exchange Act of 1934 (‘‘Exchange Act’’
or ‘‘Act’’),3 notice is hereby given that
on April 26, 2019, the Options Clearing
Corporation (‘‘OCC’’) filed with the
Securities and Exchange Commission
16 17
CFR 200.30–3(a)(12).
U.S.C. 5465(e)(1).
2 17 CFR 240.19b–4(n)(1)(i).
3 15 U.S.C. 78a et seq.
1 12
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(‘‘Commission’’) an advance notice
(‘‘Advance Notice’’) as described in
Items I, II and III below, which Items
have been prepared by OCC. The
Commission is publishing this notice to
solicit comments on the advance notice
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Advance
Notice
This advance notice is submitted in
connection with a proposed change to
OCC’s operations in the form of the
replacement of a revolving credit facility
that OCC maintains for a 364-day term
and that it may use: (i) In anticipation
of a potential default by or suspension
of a Clearing Member; (ii) to meet
obligations arising out of the default or
suspension of a Clearing Member; (iii) to
meet reasonably anticipated liquidity
needs for same-day settlement as a
result of the failure of any bank or
securities or commodities clearing
organization to achieve daily settlement;
or (iv) to meet obligations arising out of
the failure of a bank or securities or
commodities clearing organization to
perform its obligations due to its
bankruptcy, insolvency, receivership or
suspension of operations. OCC has
provided a summary of the terms and
conditions of the proposed renewal in
confidential Exhibit 3. The proposed
change is described in additional detail
in Item 10 below.
The advance notice is available on
OCC’s website at https://
www.theocc.com/about/publications/
bylaws.jsp. All terms with initial
capitalization that are not otherwise
defined herein have the same meaning
as set forth in the OCC By-Laws and
Rules.4
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Advance Notice
In its filing with the Commission,
OCC included statements concerning
the purpose of and basis for the advance
notice and discussed any comments it
received on the advance notice. The text
of these statements may be examined at
the places specified in Item IV below.
OCC has prepared summaries, set forth
in sections A and B below, of the most
significant aspects of these statements.
(A) Clearing Agency’s Statement on
Comments on the Advance Notice
Received From Members, Participants or
Others
Written comments were not and are
not intended to be solicited with respect
4 OCC’s By-Laws and Rules can be found on
OCC’s public website: https://optionsclearing.com/
about/publications/bylaws.jsp.
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25089
to the advance notice and none have
been received. OCC will notify the
Commission of any written comments
received by OCC.
(B) Advance Notices Filed Pursuant to
Section 806(e) of the Payment, Clearing,
and Settlement Supervision Act
Description of Proposed Change
Background
This advance notice is being filed in
connection with a proposed change in
the form of the replacement of a
revolving credit facility that OCC
maintains for a 364-day term and that it
may use: (i) In anticipation of a
potential default by or suspension of a
Clearing Member; (ii) to meet
obligations arising out of the default or
suspension of a Clearing Member; (iii) to
meet reasonably anticipated liquidity
needs for same-day settlement as a
result of the failure of any bank or
securities or commodities clearing
organization to achieve daily settlement;
or (iv) to meet obligations arising out of
the failure of a bank or securities or
commodities clearing organization to
perform its obligations due to its
bankruptcy, insolvency, receivership or
suspension of operations (‘‘Permitted
Use Circumstances’’). In any such
Permitted Use Circumstance, OCC has
certain conditional authority under its
By-Laws and Rules to borrow or
otherwise obtain funds from third
parties using Clearing Member margin
deposits and/or Clearing Fund
contributions.5
OCC’s existing credit facility
(‘‘Existing Facility’’) was implemented
as of June 28, 2018, through the
execution of a credit agreement among
OCC, the administrative agent, collateral
agent and the lenders that are parties to
the agreement from time to time. The
Existing Facility provides short-term
secured borrowings in an aggregate
principal amount of $2 billion but may
be increased to $3 billion if OCC so
requests and sufficient commitments
from lenders are received and accepted.
To obtain a loan under the Existing
Facility, OCC must pledge as collateral
U.S. dollars, securities issued or
guaranteed by the U.S. Government or
the Government of Canada, S&P 500
Market Index equities, Exchange-Traded
Funds (‘‘ETFs’’), American Depositary
Receipts (‘‘ADRs’’) or certain
government-sponsored enterprise
(‘‘GSE’’) debt securities. Certain
mandatory prepayments or deposits of
additional collateral are required
depending on changes in the collateral’s
5 See generally Article VIII of OCC’s By-Laws and
OCC Rules 1006(f), 1102 and 1104(b).
E:\FR\FM\30MYN1.SGM
30MYN1
]]>Agencies
[Federal Register Volume 84, Number 104 (Thursday, May 30, 2019)]
[Notices]
[Pages 25086-25089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11238]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85931; File No. SR-C2-2019-011]
Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Amend Rule 6.11
May 23, 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 May 16, 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.
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\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).
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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 6.11. 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 proposed rule change makes enhancements to the Exchange's
opening auction process. The Exchange recently adopted an opening
auction process, which the Exchange intends to implement on June 17,
2019.\5\ The Exchange intends to implement the
[[Page 25087]]
enhancements proposed in this rule filing at that time.
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\5\ See Securities Exchange Act Release No. 85788 (May 6, 2019),
84 FR 20673 (May 10, 2019), SR-C2-2019-009. The changes in SR-C2-
2019-009 are currently effective but not yet operative; however, the
proposed rule text in this rule filing assume operativeness of those
effective changes.
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First, the proposed rule change amends the definition of Composite
Market in Rule 6.11(a). The term ``Composite Market'' means the market
for a series comprised of (1) the higher of the then-current best
appointed Market-Maker bulk message bid on the Queuing Book and the
away best bid (``ABB'') (if there is an ABB) and (2) the lower of the
then-current best appointed Market-Maker bulk message offer on the
Queuing Book and the away best offer (``ABO'') (if there is an ABO).\6\
The Queuing Book means the book into which Users may submit orders and
quotes (and onto which good-til-cancelled and good-til-day orders
remaining on the Book from the previous trading session or trading day,
as applicable, are entered) during the Queuing Period for participation
in the applicable opening rotation. The Queuing Period means the time
period prior to the initiation of an opening rotation during which the
System accepts orders and quotes for participation in the opening
rotation for the applicable trading session. Therefore, in an All
Sessions Class (i.e., a class that trades during both the Global
Trading Hours (``GTH'') and Regular Trading Hours (``RTH'') trading
sessions), the Composite Market will be based on the appointed Market-
Maker bulk message bids and offers in the RTH Queuing Book (available
from 7:30 a.m. through the opening of trading). It currently will not
consider any appointed Market-Maker bulk message bids and offers in
that class in the GTH book (on which trading will be occurring in that
class from 8:30 a.m. through 9:15 a.m.).
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\6\ The term ``Composite Bid (Offer)'' means the bid (offer)
used to determine the Composite Market.
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Market-Makers are generally responsible for pricing the markets in
their appointed classes, which is why the Exchange considers Market-
Makers' bulk message bids and offers when determining the Composite
Market in connection with the opening auction process. For that reason,
the price protection measures applied during the opening auction
process (the Maximum Composite Width check and the Opening Collar) are
based on the Composite Market. The Exchange believes it would be
beneficial, and may lead to more accurate pricing during the opening
auction process, for the Composite Market to be used for the RTH
opening auction process to incorporate all available bulk message bids
and offers from appointed Market-Makers, including any in the GTH book.
Therefore, the proposed rule change amends the definition of Composite
Market to provide that it will be comprised of the higher (lower) of
the then-current best appointed Market-Maker bulk message bid (offer)
on the Exchange (which includes both the RTH Queuing Book and the GTH
book), rather than just the Queuing Book.
Second, the proposed rule change amends Rule 6.11(e)(1) to provide
that a series is not eligible to open if the Composite Market is
crossed (i.e., the Composite Bid is higher than the Composite Offer). A
series will be eligible to open if the Composite Width is less than or
equal to the Maximum Composite Width, or is greater than the Maximum
Composite Width but there are no non-M Capacity market orders or buy
(sell) limit orders with prices higher (lower) than the Composite Bid
(Offer) and no orders or quotes marketable against each other (i.e.,
locked or crossed).\7\ The Maximum Composite Width Check is a price
protection measure intended to prevent orders from executing at extreme
prices at the open. A crossed market is generally unreliable, and
opening with a crossed Composite Market may create price risk for any
executions that may occur during the opening rotation (pursuant to
subparagraph (e)(3)). Therefore, the proposed rule change enhances the
Maximum Composite Width check price protection to provide that the
Composite Market may not be crossed for a series to be eligible to
open.
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\7\ The proposed rule change makes a nonsubstantive change to
this language in Rule 6.11(e)(1)(B). Once a series satisfies the
conditions in the Maximum Composite Width Check, the System will
determine an Opening Trading Price pursuant to Rule 6.11(e)(2), and
then open the series pursuant to Rule 6.11(e)(3).
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Third, the proposed rule change harmonizes how the opening auction
process will be used following all trading halts. Current Rule 6.11(g)
provides that if there is a Regulatory Halt,\8\ the Queuing Period
begins immediately when the Exchange halts trading in the class. If the
Exchange declares any other type of halt in a class (i.e., a non-
Regulatory Halt), there will be no Queuing Period. Additionally, if
there is a Regulatory Halt, the System queues a User's open orders or
quotes, unless the User entered instructions to cancel its open resting
orders and quotes, but if there is a non-Regulatory Halt, the System
cancels a User's open orders and quotes. The Exchange has determined to
eliminate the distinction between how the opening auction process
applies following a Regulatory Halt and a non-Regulatory Halt. The
proposed rule change provides that the opening auction process
following any trading halt will apply in the manner it currently
applies following a Regulatory Halt. In other words, following a non-
Regulatory Halt, there will be a Queuing Period during the trading
halt. Additionally, in the event of a non-Regulatory Halt, the System
will queue a User's orders and quotes resting on the book at the time
of the trading halt for participation in the opening rotation following
the trading halt, unless the User entered instructions to cancels its
resting orders and quotes. This will provide Users with the ability to
decide how its resting orders and quotes should be handled in the event
of a non-Regulatory Halt, as they are currently able to do in the event
of a Regulatory Halt. The Exchange also believes elimination of this
distinction will eliminate potential investor confusion regarding how
the System will handle orders and quotes in the event of a trading
halt.\9\
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\8\ If the primary market for the applicable underlying security
declares a regulatory trading halt, suspension, or pause with
respect to such security, it is referred to as a ``Regulatory
Halt.''
\9\ The proposed rule change also makes nonsubstantive changes
to paragraph (g).
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Finally, the proposed rule change makes several nonsubstantive
changes in Rule 6.11:
The proposed rule change makes a grammatical change in
subparagraph (b)(2).
The proposed rule change adds the word ``process'' in
subparagraph (b)(2)(E) after the term ``opening auction,'' as it was
inadvertently omitted (throughout Rule 6.11, the entire opening is
referred to as the ``opening auction process'').
The proposed rule change updates subparagraph (e)(2) to clarify
when the System will and will not be able to determine an Opening Trade
Price. The System determines an Opening Trade Price if there are orders
and quotes marketable against each other at a price not outside the
Opening Collar (this is consistent with the current rule, which states
there is no Opening Trade Price if there are no locked or crossed
orders or quotes (i.e., marketable orders and quotes) at a price not
outside the Opening Collar). The proposed rule change merely modifies
the language, which the Exchange believes is clearer, and makes
corresponding changes to the paragraph numbering and lettering.
Additionally, the proposed rule change adds the defined term ``VMIM
price'', which is the price determined by the process described in
current subparagraphs (e)(2)(A)(i) through (iii) (proposed
subparagraphs (e)(2)(A) through (3)). The proposed rule change
[[Page 25088]]
does not modify the process used to determine that price.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\10\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \11\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \12\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
\12\ Id.
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In particular, the proposed revision to the definition of Composite
Market will remove impediments to and perfect the mechanism of a free
and open market and a national market system and protect investors,
because it will ensure the price protection measures used during the
opening auction process, which are based on the Composite Market, for
the RTH opening in an All Sessions Class will incorporate all available
pricing information on the Exchange from appointed Market-Makers in
that class. The Exchange believes this may lead to a more accurate
Opening Trade Price. The proposed rule change to not open a series if
the Composite Market is crossed will promote just and equitable
principles of trade and protect investors, because crossed markets are
generally unreliable. The Exchange believes not opening a series if the
Composite Market is crossed may reduce the risk of erroneously priced
executions during the opening rotation. The proposed rule change to
harmonize the opening auction process following all types of trading
halts will protect investors by eliminating potential confusion
regarding how the Exchange will open series following trading halts,
and by providing Users with flexibility regarding how the System will
handle their orders and quotes following a non-Regulatory Halt (as they
currently have following a Regulatory Halt). The proposed
nonsubstantive changes will benefit investors by providing additional
clarity to the Rules.
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 proposed rule change
will not impose any burden on intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act. The
proposed changes to the price protection measures used during the
opening auction process will apply in the same manner to all orders and
quotes of all Users. All Users will have the same flexibility regarding
how the System will handle their orders and quotes following non-
Regulatory Halts, which is the same flexibility currently available to
Users following Regulatory Halts. If a User wants its orders and quotes
to be handled following a non-Regulatory Halt in the manner they are
today, that User can instruct the Exchange to do so. The proposed rule
change will not impose any burden on intermarket competition that is
not necessary or appropriate in furtherance of the purposes of the Act.
The proposed changes to the price protections used during the opening
auction process only impact how series will open on the Exchange prior
to the opening of trading. The proposed changes are intended to enhance
the price protections used during the opening process and are not
intended as competitive changes, and to provide Users with flexibility
with respect to the handling of their orders and quotes following a
non-Regulatory Halt. The proposed nonsubstantive changes do not impact
trading, and thus have no competitive impact; they merely provide
additional clarity to the Rules.
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 rule does not (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest, provided that the self-regulatory organization
has given 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,\13\ the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6)
thereunder.\15\
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\13\ The Exchange has satisfied this requirement.
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-C2-2019-011 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-C2-2019-011. 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
[[Page 25089]]
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-C2-2019-011 and should be submitted on
or before June 20, 2019.
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\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11238 Filed 5-29-19; 8:45 am]
BILLING CODE 8011-01-P
