Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Cboe Trade Match System, 48687-48690 [2019-19904]
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Federal Register / Vol. 84, No. 179 / Monday, September 16, 2019 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 33 and Rule 19b–
4(f)(6) thereunder.34
A proposed rule change filed under
Rule 19b–4(f)(6) 35 normally does not
become operative for 30 days after the
date of the filing. However, pursuant to
Rule 19b–4(f)(6)(iii),36 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay to
allow the Funds to begin listing and
trading on the Exchange without delay.
The Exchange states that its
representations regarding the
requirements for each Underlying Index
are substantially similar to those
included in relation to the Comparable
Indexes and Comparable VRDO Index in
the Comparable Filing and Comparable
VRDO Filing, respectively. Moreover,
according to the Exchange, waiver of the
30-day operative delay will more
quickly facilitate the listing and trading
of additional exchange-traded products
that will enhance competition among
market participants, to the benefit of
investors and the marketplace. For these
reasons, the Commission believes that
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest.
Accordingly, the Commission waives
the 30-day operative delay and
designates the proposed rule change
operative upon filing.37
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
33 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
35 17 CFR 240.19b–4(f)(6).
36 17 CFR 240.19b–4(f)(6)(iii).
37 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
48687
to make available publicly. All
submissions should refer to File
Number SR–NASDAQ–2019–070, and
should be submitted on or before
October 7, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.38
Jill M. Peterson,
Assistant Secretary.
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:
[FR Doc. 2019–19903 Filed 9–13–19; 8:45 am]
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–
NASDAQ–2019–070 on the subject line.
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to the Cboe
Trade Match System
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–NASDAQ–2019–070. 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 such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
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BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86920; File No. SR–CBOE–
2019–056]
September 10, 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
September 5, 2019, Cboe Exchange, Inc.
(the ‘‘Exchange’’ or ‘‘Cboe Options’’)
filed with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Exchange filed the proposal as a
‘‘non-controversial’’ proposed rule
change pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to update
the Exchange’s Rules regarding the Cboe
Trade Match System (‘‘CTM’’) and move
those Rules from the currently effective
Rulebook (‘‘current Rulebook’’) to the
shell structure for the Exchange’s
Rulebook that will become effective
upon the migration of the Exchange’s
trading platform to the same system
used by the Cboe Affiliated Exchanges
(as defined below) (‘‘shell Rulebook’’).
The text of the proposed rule change is
provided in Exhibit 5.
38 17
CFR 200.30–3(a)(12).
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).
1 15
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Federal Register / Vol. 84, No. 179 / Monday, September 16, 2019 / Notices
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/
AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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1. Purpose
In 2016, the Exchange’s parent
company, Cboe Global Markets, Inc.
(formerly named CBOE Holdings, Inc.)
(‘‘Cboe Global’’), which is also the
parent company of Cboe C2 Exchange,
Inc. (‘‘C2’’), acquired Cboe EDGA
Exchange, Inc. (‘‘EDGA’’), Cboe EDGX
Exchange, Inc. (‘‘EDGX’’ or ‘‘EDGX
Options’’), Cboe BZX Exchange, Inc.
(‘‘BZX’’ or ‘‘BZX Options’’), and Cboe
BYX Exchange, Inc. (‘‘BYX’’ and,
together with Cboe Options, C2, EDGX,
EDGA, and BZX, the ‘‘Cboe Affiliated
Exchanges’’). Cboe Options intends to
migrate its trading platform to the same
system used by the Cboe Affiliated
Exchanges, which the Exchange expects
to complete on October 7, 2019. In
connection with this technology
migration, the Exchange has a shell
Rulebook that resides alongside its
current Rulebook, which shell Rulebook
will contain the Rules that will be in
place upon completion of the Cboe
Options technology migration.
The Exchange proposes to harmonize
current Rule 6.67 in connection with the
Cboe Trade Match System (‘‘CTM’’),
which allows authorized Trading Permit
Holders (‘‘TPHs’’) to add and/or update
trade records, to C2 Rule 6.31, which
provides for the ‘‘Clearing Editor’’ and
is functionally equivalent to CTM. The
Exchange now proposes Rule 6.6 in the
shell Rulebook, which will govern the
Exchange’s Clearing Editor upon
migration, and to delete Rule 6.67 from
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the current Rulebook, also upon
migration. The Exchange proposes to
amend the rule to conform to the
Clearing Editor functionality and rule
language of that of C2 to the extent
necessary to retain intended differences
unique to Cboe Options market-model,
functionality, and/or rule text, which
are identified below. The Exchange also
proposes to make non-substantive
changes by updating cross-references to
rules in the shell Rulebook and rules not
yet in the shell Rulebook but that in the
Exchange intends to move to the shell
Rulebook and, as a result of
consolidating and conforming the
proposed rule to the corresponding C2
rule, make non-substantive changes that
simplify and update the rule text to read
in plain English and reformat the
paragraph lettering and/or numbering.
Specifically, the Clearing Editor under
proposed Rule 6.6, like CTM, allows
TPHs to update executed trades on their
trading date and revise them for
clearing. Proposed Rule 6.6(a) is
substantively the same as the current
general language under Rule 6.67 and is
consistent with corresponding C2 Rule
6.31(a). The Exchange maintains that
along with using Clearing Editor to
correct certain bona fide errors, TPHs
may use it to update information
entered pursuant to Rule 6.1 in the shell
Rulebook (current Rule 6.51).5 The
proposed rule maintains this difference
between it and C2 Rule 6.31 as it relates
to the systemization or report of an
order executed in open outcry which is
unique to Cboe Options. Proposed Rule
6.6(b) is also substantially similar to
current 6.67(a). The proposed rule
change makes minor updates to conform
the rule to corresponding C2 Rule
6.31(b), including allowing a TPH to
change the account and subaccount
field, as opposed to only the marketmaker account and subaccount
currently allowed, and updating the
term origin code to capacity code which
is both consistent with the current C2
term, as well as currently defined in the
shell Rulebook and to be used in the
Exchange Rules upon migration.6 The
proposed rule retains language that
provides that a change to capacity code
may not be made from a customer code
to any other code. The proposed rule
maintains this difference between it and
the corresponding C2 Rule because Cboe
Options will continue to provide for
customer priority upon migration,7
unlike C2 which does not account for
customer priority. The proposed rule
change deletes current Rule 6.67(b),
which lists fields TPHs may change
only if they provide notice to the
Exchange. Upon migration, Clearing
Editor will not permit TPHs to change
these fields, which is consistent with C2
Rule 6.31. If a TPH must change the
series, quantity, buy or sell, or premium
price, it must contact the Exchange
pursuant to Rule 6.5 in the shell
Rulebook (current Rule 6.25) regarding
obvious errors. In light of the proposed
deletion of Rule 6.67(b), the proposed
rules change also removes the provision
under Rule 6.67 which states that the
Exchange will announce documentation
requirements related to changes made
through the use of CTM via a Regulatory
Circular. This provision is currently in
place in order for a TPH to provide to
the Exchange notice and document of
the any changes made pursuant to
pursuant to Rule 6.67(b). Because the
proposed rule change removes Rule
6.67(b), this provision is no longer
applicable.8 The proposed rule change
also does not make any substantive
changes to current paragraph (c)
regarding changes made related to give
ups, but merely moves the provision to
proposed paragraph (c) and updates the
language to be consistent with C2 Rule
6.31(c). The Exchange notes that the
term ‘‘Designated Give Up’’ is also
consistent with current Rule 6.21 (shell
Rulebook Rule 5.10), which was
recently amended to reflect such term.
Finally, the proposed rule change moves
current Rule 6.67.01 to proposed Rule
6.6.01 and makes only minor updates to
the language to conform to C2 Rule
6.31.01. It does not make any
substantive changes to this rule.
5 The Exchange notes that in anticipation of
migration it intends to move Rule 6.51 to Rule 6.1
without making substantive changes to the rule.
6 See Rule 1.1 in the shell Rulebook.
7 See Rule 5.32 in the shell Rulebook.
8 The Exchange notes that change made in the
Clearing Editor will continue to be documented in
the Exchange’s audit trail.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
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2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.9 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 10 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,
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Federal Register / Vol. 84, No. 179 / Monday, September 16, 2019 / Notices
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) 11 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The proposed rule change is intended
to align the Exchange’s current CTM
rule and system functionality with one
of the Cboe Affiliated Exchanges, C2, in
order to provide a consistent technology
offering across the affiliated exchanges
upon the technology migration on
October 7, 2019. A consistent
technology offering, in turn, will
simplify the technology
implementation, changes and
maintenance by TPHs of the Exchange
that are also participants on C2. The
proposed rule change does not propose
to implement new or unique
functionality that has not been
previously filed with the Commission,
found to be consistent with the Act, or
is not available on Cboe Affiliated
Exchanges. As a result of a consistent
Clearing Editor rule and system
functionality between the Exchange and
C2, the proposed rule change will foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities and remove
impediment to and perfect the
mechanism of a free and open market
and national market system by
simplifying the regulatory requirements
and increasing the understanding of the
Exchange’s operations for TPHs that are
also participants on C2. The Exchange
notes that the proposed rule only makes
the above-mentioned minor updates in
order to conform to the corresponding
C2 rule; including allowing a TPH to
change the account and subaccount
field (as opposed to only the marketmaker account and subaccount
currently allowed), updating the term
origin code to capacity code (which is
both consistent with the C2 rule and the
definition in the shell Rulebook), and
removing the provision that only allows
TPHs to change certain fields if they
provide notice to the Exchange. The
Exchange believes that these updates
will provide harmonization between the
functionality and rules across the
affiliated exchanges, and, in turn, foster
greater uniformity and less burdensome
and more efficient regulatory
compliance. As stated above, the
proposed rule is different only to the
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extent that it maintains intended
differences unique to Cboe Options
market-model, functionality, and/or rule
text, thereby protecting investors by
providing rules that clearly and
properly reflect nuances between the
Exchange and C2. The Exchange also
notes that the proposed rule is
substantially the same as the current
rule. The proposed rule change makes
other various non-substantive changes
to the rule, largely in part to make it
consistent with C2’s rule. The proposed
non-substantive changes will protect
investors and benefit market
participants by simplifying the rules,
using plain English throughout the
rules, and updating cross-references and
paragraph lettering/numbering.
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 reiterates that the proposed
rule change is being proposed in the
context of a technology migration of the
Cboe Affiliated Exchanges. As stated,
the proposed changes to the rules that
reflect functionality that will be in place
come October 7, 2019 provide clear
rules that accurately reflect postmigration functionality upon the
completion of migration. The Exchange
believes the proposed rule change will
benefit Exchange participants in that it
will provide a consistent technology
offering for TPHs by the Cboe Affiliated
Exchanges. The Exchange does not
believe the proposed rule change will
impose any burden on intramarket
competition because the proposed
Clearing Editor will be available to all
TPHs, both on the floor and
electronically, to update executed trades
on their trading date and revise them for
clearing in the same manner. The
Exchange also does not believe that the
proposed rule change will impose any
burden on intermarket competition
because the basis for the proposed rule
change are the rules of C2, which have
previously been filed with the
Commission.
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.
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48689
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
(i) Significantly affect the protection
of investors or the public interest;
(ii) impose any significant burden on
competition; and
(iii) become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 12 and Rule 19b–4(f)(6) 13
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.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2019–056 on the subject line.
Paper Comments
• Send paper comments in triplicate
to the Secretary, Securities and
Exchange Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2019–056. 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
12 15
13 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
16SEN1
48690
Federal Register / Vol. 84, No. 179 / Monday, September 16, 2019 / Notices
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CBOE–2019–056 and
should be submitted on or before
October 7, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–19904 Filed 9–13–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
jspears on DSK3GMQ082PROD with NOTICES
Extension:
Rule 602, SEC File No. 270–404, OMB
Control No. 3235–0461
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 602 of Regulation
NMS (17 CFR 240.602), under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.). The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget (‘‘OMB’’) for
extension and approval.
Rule 602 of Regulation NMS,
Dissemination of Quotations in NMS
securities, contains two related
14 17
CFR 200.30–3(a)(12).
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collections. The first collection of
information is found in Rule 602(a).1
This third-party disclosure requirement
obligates each national securities
exchange and national securities
association to make available to
quotation vendors for dissemination to
the public the best bid, best offer, and
aggregate quotation size for each
‘‘subject security,’’ as defined under the
Rule. The second collection of
information is found in Rule 602(b).2
This disclosure requirement obligates
any exchange member and over-thecounter (‘‘OTC’’) market maker that is a
‘‘responsible broker or dealer,’’ as
defined under the Rule, to communicate
to an exchange or association its best
bids, best offers, and quotation sizes for
subject securities.3
It is anticipated that twenty-three
respondents, consisting of twenty-two
national securities exchanges and one
national securities association, will
collectively respond approximately
5,780,026,336,314 times per year
pursuant to Rule 602(a) at 18.22
microseconds per response, resulting in
a total annual burden of approximately
30,590 hours. It is anticipated that no
respondents will have a reporting
burden pursuant to Rule 602(b).4
Thus, the aggregate third-party
disclosure burden under Rule 602 is
30,590 hours annually which is
comprised of 30,590 hours relating to
Rule 602(a) and 0 hours relating to Rule
602(b).
Written comments are invited on: (a)
Whether the proposed collections of
information are necessary for the proper
performance of the functions of the
Commission, including whether the
information will have practical utility;
(b) the accuracy of the Commission’s
estimate of the burden of the proposed
collections of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
(d) ways to minimize the burden of
collections of information on those who
are to respond, including through the
use of automated collection techniques
or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: Charles Riddle, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington,
DC 20549, or send an email to: PRA_
Mailbox@sec.gov.
Dated: September 11, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–19974 Filed 9–13–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86910; File No. SR–CBOE–
2019–055]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rule 4.10(b)
Regarding the Notice Requirement in
Connection With Trading Permit
Holders That Clear Market-Maker
Trades
1 17
September 10, 2019.
2 17
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
September 5, 2019, Cboe Exchange, Inc.
(the ‘‘Exchange’’) 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
CFR 242.602(a).
CFR 242.602(b).
3 Under Rule 602(b)(5), electronic
communications networks (‘‘ECNs’’) have the
option of reporting to an exchange or association for
public dissemination, on behalf of customers that
are OTC market makers or exchange market makers,
the best-priced orders and the full size for such
orders entered by market makers on the ECN, to
satisfy such market makers’ reporting obligation
under Rule 602(b). Since this reporting requirement
is an alternative method of meeting the market
makers’ reporting obligation, and because it is
directed to nine or fewer persons (ECNs), this
collection of information is not subject to OMB
review under the Paperwork Reduction Act
(‘‘PRA’’).
4 For the reporting obligation under Rule 602(b),
the respondents are exchange members and OTC
market makers. The Commission believes that
communication of quotations through an
exchange’s electronic trading system effectively
means that exchange members currently have no
reporting burden under Rule 602(b) for these
quotations. The Commission also believes that there
are presently no OTC market makers that quote
other than on an exchange.
PO 00000
Frm 00112
Fmt 4703
Sfmt 4703
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
E:\FR\FM\16SEN1.SGM
16SEN1
]]>Agencies
[Federal Register Volume 84, Number 179 (Monday, September 16, 2019)]
[Notices]
[Pages 48687-48690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19904]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86920; File No. SR-CBOE-2019-056]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
to the Cboe Trade Match System
September 10, 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 September 5, 2019, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III 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 Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to update the Exchange's Rules regarding the Cboe Trade Match System
(``CTM'') and move those Rules from the currently effective Rulebook
(``current Rulebook'') to the shell structure for the Exchange's
Rulebook that will become effective upon the migration of the
Exchange's trading platform to the same system used by the Cboe
Affiliated Exchanges (as defined below) (``shell Rulebook''). The text
of the proposed rule change is provided in Exhibit 5.
[[Page 48688]]
The text of the proposed rule change is also available on the
Exchange's website (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In 2016, the Exchange's parent company, Cboe Global Markets, Inc.
(formerly named CBOE Holdings, Inc.) (``Cboe Global''), which is also
the parent company of Cboe C2 Exchange, Inc. (``C2''), acquired Cboe
EDGA Exchange, Inc. (``EDGA''), Cboe EDGX Exchange, Inc. (``EDGX'' or
``EDGX Options''), Cboe BZX Exchange, Inc. (``BZX'' or ``BZX
Options''), and Cboe BYX Exchange, Inc. (``BYX'' and, together with
Cboe Options, C2, EDGX, EDGA, and BZX, the ``Cboe Affiliated
Exchanges''). Cboe Options intends to migrate its trading platform to
the same system used by the Cboe Affiliated Exchanges, which the
Exchange expects to complete on October 7, 2019. In connection with
this technology migration, the Exchange has a shell Rulebook that
resides alongside its current Rulebook, which shell Rulebook will
contain the Rules that will be in place upon completion of the Cboe
Options technology migration.
The Exchange proposes to harmonize current Rule 6.67 in connection
with the Cboe Trade Match System (``CTM''), which allows authorized
Trading Permit Holders (``TPHs'') to add and/or update trade records,
to C2 Rule 6.31, which provides for the ``Clearing Editor'' and is
functionally equivalent to CTM. The Exchange now proposes Rule 6.6 in
the shell Rulebook, which will govern the Exchange's Clearing Editor
upon migration, and to delete Rule 6.67 from the current Rulebook, also
upon migration. The Exchange proposes to amend the rule to conform to
the Clearing Editor functionality and rule language of that of C2 to
the extent necessary to retain intended differences unique to Cboe
Options market-model, functionality, and/or rule text, which are
identified below. The Exchange also proposes to make non-substantive
changes by updating cross-references to rules in the shell Rulebook and
rules not yet in the shell Rulebook but that in the Exchange intends to
move to the shell Rulebook and, as a result of consolidating and
conforming the proposed rule to the corresponding C2 rule, make non-
substantive changes that simplify and update the rule text to read in
plain English and reformat the paragraph lettering and/or numbering.
Specifically, the Clearing Editor under proposed Rule 6.6, like
CTM, allows TPHs to update executed trades on their trading date and
revise them for clearing. Proposed Rule 6.6(a) is substantively the
same as the current general language under Rule 6.67 and is consistent
with corresponding C2 Rule 6.31(a). The Exchange maintains that along
with using Clearing Editor to correct certain bona fide errors, TPHs
may use it to update information entered pursuant to Rule 6.1 in the
shell Rulebook (current Rule 6.51).\5\ The proposed rule maintains this
difference between it and C2 Rule 6.31 as it relates to the
systemization or report of an order executed in open outcry which is
unique to Cboe Options. Proposed Rule 6.6(b) is also substantially
similar to current 6.67(a). The proposed rule change makes minor
updates to conform the rule to corresponding C2 Rule 6.31(b), including
allowing a TPH to change the account and subaccount field, as opposed
to only the market-maker account and subaccount currently allowed, and
updating the term origin code to capacity code which is both consistent
with the current C2 term, as well as currently defined in the shell
Rulebook and to be used in the Exchange Rules upon migration.\6\ The
proposed rule retains language that provides that a change to capacity
code may not be made from a customer code to any other code. The
proposed rule maintains this difference between it and the
corresponding C2 Rule because Cboe Options will continue to provide for
customer priority upon migration,\7\ unlike C2 which does not account
for customer priority. The proposed rule change deletes current Rule
6.67(b), which lists fields TPHs may change only if they provide notice
to the Exchange. Upon migration, Clearing Editor will not permit TPHs
to change these fields, which is consistent with C2 Rule 6.31. If a TPH
must change the series, quantity, buy or sell, or premium price, it
must contact the Exchange pursuant to Rule 6.5 in the shell Rulebook
(current Rule 6.25) regarding obvious errors. In light of the proposed
deletion of Rule 6.67(b), the proposed rules change also removes the
provision under Rule 6.67 which states that the Exchange will announce
documentation requirements related to changes made through the use of
CTM via a Regulatory Circular. This provision is currently in place in
order for a TPH to provide to the Exchange notice and document of the
any changes made pursuant to pursuant to Rule 6.67(b). Because the
proposed rule change removes Rule 6.67(b), this provision is no longer
applicable.\8\ The proposed rule change also does not make any
substantive changes to current paragraph (c) regarding changes made
related to give ups, but merely moves the provision to proposed
paragraph (c) and updates the language to be consistent with C2 Rule
6.31(c). The Exchange notes that the term ``Designated Give Up'' is
also consistent with current Rule 6.21 (shell Rulebook Rule 5.10),
which was recently amended to reflect such term. Finally, the proposed
rule change moves current Rule 6.67.01 to proposed Rule 6.6.01 and
makes only minor updates to the language to conform to C2 Rule 6.31.01.
It does not make any substantive changes to this rule.
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\5\ The Exchange notes that in anticipation of migration it
intends to move Rule 6.51 to Rule 6.1 without making substantive
changes to the rule.
\6\ See Rule 1.1 in the shell Rulebook.
\7\ See Rule 5.32 in the shell Rulebook.
\8\ The Exchange notes that change made in the Clearing Editor
will continue to be documented in the Exchange's audit trail.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ 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,
[[Page 48689]]
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) \11\ requirement that the rules
of an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ Id.
---------------------------------------------------------------------------
The proposed rule change is intended to align the Exchange's
current CTM rule and system functionality with one of the Cboe
Affiliated Exchanges, C2, in order to provide a consistent technology
offering across the affiliated exchanges upon the technology migration
on October 7, 2019. A consistent technology offering, in turn, will
simplify the technology implementation, changes and maintenance by TPHs
of the Exchange that are also participants on C2. The proposed rule
change does not propose to implement new or unique functionality that
has not been previously filed with the Commission, found to be
consistent with the Act, or is not available on Cboe Affiliated
Exchanges. As a result of a consistent Clearing Editor rule and system
functionality between the Exchange and C2, the proposed rule change
will foster cooperation and coordination with persons engaged in
facilitating transactions in securities and remove impediment to and
perfect the mechanism of a free and open market and national market
system by simplifying the regulatory requirements and increasing the
understanding of the Exchange's operations for TPHs that are also
participants on C2. The Exchange notes that the proposed rule only
makes the above-mentioned minor updates in order to conform to the
corresponding C2 rule; including allowing a TPH to change the account
and subaccount field (as opposed to only the market-maker account and
subaccount currently allowed), updating the term origin code to
capacity code (which is both consistent with the C2 rule and the
definition in the shell Rulebook), and removing the provision that only
allows TPHs to change certain fields if they provide notice to the
Exchange. The Exchange believes that these updates will provide
harmonization between the functionality and rules across the affiliated
exchanges, and, in turn, foster greater uniformity and less burdensome
and more efficient regulatory compliance. As stated above, the proposed
rule is different only to the extent that it maintains intended
differences unique to Cboe Options market-model, functionality, and/or
rule text, thereby protecting investors by providing rules that clearly
and properly reflect nuances between the Exchange and C2. The Exchange
also notes that the proposed rule is substantially the same as the
current rule. The proposed rule change makes other various non-
substantive changes to the rule, largely in part to make it consistent
with C2's rule. The proposed non-substantive changes will protect
investors and benefit market participants by simplifying the rules,
using plain English throughout the rules, and updating cross-references
and paragraph lettering/numbering.
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 reiterates that
the proposed rule change is being proposed in the context of a
technology migration of the Cboe Affiliated Exchanges. As stated, the
proposed changes to the rules that reflect functionality that will be
in place come October 7, 2019 provide clear rules that accurately
reflect post-migration functionality upon the completion of migration.
The Exchange believes the proposed rule change will benefit Exchange
participants in that it will provide a consistent technology offering
for TPHs by the Cboe Affiliated Exchanges. The Exchange does not
believe the proposed rule change will impose any burden on intramarket
competition because the proposed Clearing Editor will be available to
all TPHs, both on the floor and electronically, to update executed
trades on their trading date and revise them for clearing in the same
manner. The Exchange also does not believe that the proposed rule
change will impose any burden on intermarket competition because the
basis for the proposed rule change are the rules of C2, which have
previously been filed with the Commission.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and
Rule 19b-4(f)(6) \13\ 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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2019-056 on the subject line.
Paper Comments
Send paper comments in triplicate to the Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number SR-CBOE-2019-056. 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
[[Page 48690]]
Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CBOE-2019-056 and should be submitted on
or before October 7, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-19904 Filed 9-13-19; 8:45 am]
BILLING CODE 8011-01-P
