Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Move Certain Rules in Chapter XXIII of the Currently Effective Rulebook to Proposed Section G of Chapter 4 of the Shell Structure for the Exchange's Rulebook That Will Become Effective Upon the Migration of the Exchange's Trading Platform, 56496-56498 [2019-22934]
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56496
Federal Register / Vol. 84, No. 204 / Tuesday, October 22, 2019 / Notices
Exchange rules regarding the handling
of orders accepted by the Exchange and
make such rules easier for market
participants to navigate and
comprehend.34
In addition, the Exchange believes
that the proposal to codify that the
Exchange would cancel a market order
or the balance thereof that has been
collared once it has exhausted trading
opportunities within its collar execution
price plus/minus one Trading Collar if
there is no Available Interest would
protect investors from potentially
erroneous executions.35 Further, the
Exchange believes that the proposal to
codify current functionality regarding a
collared order that is a market order to
sell that has reached $0.00 such that the
Exchange will post the order at its MPV
(e.g., $0.01 or $0.05) would promote just
and equitable principles of trade and
assist with the maintenance of fair and
orderly markets because an order may
never be posted for lower than its MPV
and the alternative to holding the order
at the MPV would be to cancel it.36 The
Exchange believes the proposed
clarification of how such orders are
handled provides the collared order an
opportunity for an execution (rather
than being cancelled) and adds
transparency and internal consistency to
Exchange rules.37
The Commission notes that the
Exchange believes that the Zero NBBO
Collar Exception would improve the
operation of the Trading Collar when
the prevailing market is zero (which the
Exchange states indicates market
dislocation) at the time an incoming
market order arrives.38 The Exchange
states that absent the proposed Zero
NBBO Collar Exception, a market order
to buy (sell) that arrives when the NBB
(NBO) is zero would trade based on the
last sale price, if any.39 The Exchange
notes that if there is no last sale price,
the order would trade at the contra-side
NBBO which may result in a bad
execution price.40 In regards to the
proposal to reject (as opposed to collar)
incoming sell orders when the NBO is
zero, the Exchange believes this change
in functionality is necessary because
any attempt to collar such an order
would result in a negative number. In
addition, the Exchange states that it has
observed that it is extremely uncommon
to have a no (zero) offer situation and
believes it could be indicative of
34 See
Notice, supra note 4, at 46599.
id.
36 See id.
37 See id.
38 See id.
39 See id.
40 See id.
35 See
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unstable market conditions.41 To avoid
such orders receiving bad executions in
times of market dislocation, the
Exchange believes it would be
appropriate to reject such orders.42
The Exchange also believes that it is
appropriate that the Exchange cancel a
market order that is collared when an
NMS stock enters an LULD state
because when the underlying NMS
stock enters an LULD state, there may
not be a reliable underlying reference
price, there may be a wide bid/ask
quotation differential in the option, and
there may be less liquidity in the
options markets.43 According to the
Exchange, allowing a collared Market
Order to execute (as opposed to cancel)
in such circumstances could lead to
executions at unintended prices (i.e.,
inferior to the NBBO), and could add to
volatility in the options markets during
times of extraordinary market
volatility.44 The Exchange believes that
this current treatment of collared market
orders provides certainty to the
treatment of Market Orders during these
times, and the proposal to explicitly
state this treatment in the rule text adds
clarity and transparency to Exchange
rules, thus promoting just and equitable
principles of trade and removing
impediments to, and perfecting the
mechanism of, a free and open market
and a national market system.45 The
Exchange states that the proposed
cancellation of an options order if the
underlying NMS security is in an LULD
state is not new or novel and is available
on other options exchanges that offer
similar collar functionality.46 The
Exchange believes that the proposed
rule changes would add transparency
and specificity to Exchange rules.47
The Commission believes that the
operation of the Trade Collar Protection
mechanism set forth in the proposal is
consistent with the Act. In addition, the
Commission believes that the revised
description of this mechanism should
increase transparency with respect to
how the mechanism operates and
enhance investors’ understanding of
41 See
id.
id.
43 See id.
44 See id.
45 See id.
46 The Exchange cites CBOE Rule 6.3A(b)(1)
(LULD rule citing Rule 6.2 regarding order
handling); CBOE Rule 6.2, Interpretations and
Policies .07 and NASDAQ Options Market Ch. V,
Sec. 3(d). However, the Exchange notes that it
believes that the rules of these other exchanges do
not specifically contemplate the underlying security
entering an LULD state while a market order is
resting on the book, because such orders typically
execute on arrival. See Notice, supra note 4, at
46599.
47 See id.
42 See
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Sfmt 4703
how the mechanism may affect their
orders in certain market conditions.
Accordingly, the Commission believes
that the proposal is reasonably designed
to help prevent fraudulent and
manipulative acts and practices,
promote just and equitable principles of
trade, remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, protect
investors and the public interest.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,48 that the
proposed rule change (SR–NYSEArca–
2019–58) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.49
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22931 Filed 10–21–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87319; File No. SR–CBOE–
2019–087]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Move Certain
Rules in Chapter XXIII of the Currently
Effective Rulebook to Proposed
Section G of Chapter 4 of the Shell
Structure for the Exchange’s Rulebook
That Will Become Effective Upon the
Migration of the Exchange’s Trading
Platform
October 16, 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 October
3, 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 Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
48 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
49 17
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Federal Register / Vol. 84, No. 204 / Tuesday, October 22, 2019 / Notices
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 move
certain Rules in Chapter XXIII of the
currently effective Rulebook (‘‘current
Rulebook’’), which governs interest rate
options, to proposed Section G of
Chapter 4 of 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.
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’’). The Cboe Affiliated
Exchanges are working to align certain
Proposed rule
The proposed changes are of a nonsubstantive nature and will not amend
the relocated rules other than to update
their rule numbers, conform paragraph
structure 3 and number/lettering format
to that of the shell Rulebook, and make
cross-reference changes to shell rules.
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.4 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 5 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
3 The Exchange notes that the paragraph structure
for definitions listed under rules in the shell
Rulebook is in alphabetized format. Therefore, the
same structure is used under proposed Rule 4.60.
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
17:02 Oct 21, 2019
Jkt 250001
system functionality, retaining only
intended differences, between the Cboe
Affiliated Exchanges, in the context of a
technology migration. 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 relocate
certain rules in Chapter XXIII, which
govern interest rate options, to proposed
Section G of Chapter 4 in the shell
Rulebook. The Exchange notes that in
addition to relocating certain rules
regarding interest rate options to
proposed Section G of Chapter 4 in the
shell Rulebook, the proposed rule
change deletes the rules from the
current Rulebook. The proposed rule
change relocates the rules as follows:
Current rule
Introductory paragraph under Section G heading ....................................
4.60 Definitions ......................................................................................
4.61 Terms of Interest Rate Options Contracts .....................................
4.62 Wire Connections ...........................................................................
VerDate Sep<11>2014
56497
Introduction.
23.1 Definitions.
23.5 Terms of Interest Rate Option Contracts.
23.2 Wire Connections.
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) 6 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
As stated, the proposed rule change
makes no substantive changes to the
rules. The proposed rule change is
merely intended to relocate the
Exchange’s rules to the shell Rulebook
and update their numbers, paragraph
structure, including number and
lettering format, and cross-references to
conform to the shell Rulebook as a
whole in anticipation of the technology
6 Id.
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
migration on October 7, 2019. As such,
the proposed rule change is designed to
promote just and equitable principles of
trade, 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, by
improving the way the Exchange’s
Rulebook is organized, making it easier
to read, and, particularly, helping
market participants better understand
the rules of the Exchange, which will
also result in less burdensome and more
efficient regulatory compliance.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is not intended as
a competitive change, but rather, seeks
to make non-substantive rule changes in
relocating the rules and updating crossreferences to shell rules in anticipation
E:\FR\FM\22OCN1.SGM
22OCN1
56498
Federal Register / Vol. 84, No. 204 / Tuesday, October 22, 2019 / Notices
of the October 7, 2019 technology
migration. The Exchange also does not
believe that the proposed rule change
will impose any undue burden on
competition because the relocated rule
text is exactly the same as the
Exchange’s current rules, all of which
have all been previously 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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 7 and Rule
19b–4(f)(6) thereunder.8 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 9 and Rule 19b–4(f)(6)
thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) 11 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),12 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposed
rule change may become operative
immediately. The Exchange notes that
the proposed rule change is merely
relocating certain rules to its shell
rulebook—which includes
corresponding updates to rule numbers,
cross-references, and other references—
in order to conform these rules to the
shell rulebook upon the technology
migration explained above. The
Exchange believes that the proposed
rule change will make its rules easier to
read and understand for all investors.
The Exchange also asserts that the
relocation of the rules explained above
will not impose any significant burden
on competition as the substance of the
rules remains unchanged. The
Commission agrees that allowing this
proposed rule change to become
operative upon filing in order to
facilitate the Exchange’s technology
migration—without changing the
substance of these Exchange Rules—is
consistent with the protection of
investors and the public interest. For
this reason, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.13
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 shall 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–2019–087 on the subject line.
Paper Comments
7 15
U.S.C. 78s(b)(3)(A)(iii).
8 17 CFR 240.19b–4(f)(6).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s 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 Commission
has waived that requirement in this case.
11 17 CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii).
VerDate Sep<11>2014
17:02 Oct 21, 2019
Jkt 250001
• 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–CBOE–2019–087. This file
number should be included on the
13 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
offices 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–2019–087, and
should be submitted on or before
November 12, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22934 Filed 10–21–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87315; File No. SR–
NYSEAMER–2019–30]
Self-Regulatory Organizations; NYSE
American LLC; Order Approving a
Proposed Rule Change To Modify
Rules 967NY and 953.1NY Regarding
the Treatment of Orders Subject To
Trade Collar Protection
October 16, 2019.
I. Introduction
On August 21, 2019, NYSE American
LLC (‘‘NYSE American’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’), pursuant to Section
14 17
E:\FR\FM\22OCN1.SGM
CFR 200.30–3(a)(12), (59).
22OCN1
]]>Agencies
[Federal Register Volume 84, Number 204 (Tuesday, October 22, 2019)]
[Notices]
[Pages 56496-56498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22934]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87319; File No. SR-CBOE-2019-087]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Move Certain Rules in Chapter XXIII of the Currently Effective
Rulebook to Proposed Section G of Chapter 4 of the Shell Structure for
the Exchange's Rulebook That Will Become Effective Upon the Migration
of the Exchange's Trading Platform
October 16, 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 October 3, 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
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 56497]]
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 move certain Rules in Chapter XXIII of the currently effective
Rulebook (``current Rulebook''), which governs interest rate options,
to proposed Section G of Chapter 4 of 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.
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''). The Cboe Affiliated Exchanges are working to align
certain system functionality, retaining only intended differences,
between the Cboe Affiliated Exchanges, in the context of a technology
migration. 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 relocate certain rules in Chapter XXIII,
which govern interest rate options, to proposed Section G of Chapter 4
in the shell Rulebook. The Exchange notes that in addition to
relocating certain rules regarding interest rate options to proposed
Section G of Chapter 4 in the shell Rulebook, the proposed rule change
deletes the rules from the current Rulebook. The proposed rule change
relocates the rules as follows:
------------------------------------------------------------------------
Proposed rule Current rule
------------------------------------------------------------------------
Introductory paragraph under Section G Introduction.
heading.
4.60 Definitions....................... 23.1 Definitions.
4.61 Terms of Interest Rate Options 23.5 Terms of Interest Rate
Contracts. Option Contracts.
4.62 Wire Connections.................. 23.2 Wire Connections.
------------------------------------------------------------------------
The proposed changes are of a non-substantive nature and will not
amend the relocated rules other than to update their rule numbers,
conform paragraph structure \3\ and number/lettering format to that of
the shell Rulebook, and make cross-reference changes to shell rules.
---------------------------------------------------------------------------
\3\ The Exchange notes that the paragraph structure for
definitions listed under rules in the shell Rulebook is in
alphabetized format. Therefore, the same structure is used under
proposed Rule 4.60.
---------------------------------------------------------------------------
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.\4\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \5\ 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) \6\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
\6\ Id.
---------------------------------------------------------------------------
As stated, the proposed rule change makes no substantive changes to
the rules. The proposed rule change is merely intended to relocate the
Exchange's rules to the shell Rulebook and update their numbers,
paragraph structure, including number and lettering format, and cross-
references to conform to the shell Rulebook as a whole in anticipation
of the technology migration on October 7, 2019. As such, the proposed
rule change is designed to promote just and equitable principles of
trade, 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, by improving the way the Exchange's
Rulebook is organized, making it easier to read, and, particularly,
helping market participants better understand the rules of the
Exchange, which will also result in less burdensome and more efficient
regulatory compliance.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change is not
intended as a competitive change, but rather, seeks to make non-
substantive rule changes in relocating the rules and updating cross-
references to shell rules in anticipation
[[Page 56498]]
of the October 7, 2019 technology migration. The Exchange also does not
believe that the proposed rule change will impose any undue burden on
competition because the relocated rule text is exactly the same as the
Exchange's current rules, all of which have all been previously 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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative 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, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(6).
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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
Commission has waived that requirement in this case.
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately. The Exchange notes that
the proposed rule change is merely relocating certain rules to its
shell rulebook--which includes corresponding updates to rule numbers,
cross-references, and other references--in order to conform these rules
to the shell rulebook upon the technology migration explained above.
The Exchange believes that the proposed rule change will make its rules
easier to read and understand for all investors. The Exchange also
asserts that the relocation of the rules explained above will not
impose any significant burden on competition as the substance of the
rules remains unchanged. The Commission agrees that allowing this
proposed rule change to become operative upon filing in order to
facilitate the Exchange's technology migration--without changing the
substance of these Exchange Rules--is consistent with the protection of
investors and the public interest. For this reason, the Commission
hereby waives the 30-day operative delay and designates the proposal
operative upon filing.\13\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of 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 shall 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-CBOE-2019-087 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-CBOE-2019-087. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal offices 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-2019-087, and should be submitted
on or before November 12, 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), (59).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-22934 Filed 10-21-19; 8:45 am]
BILLING CODE 8011-01-P
