Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Remove its Partial Post Only at Limit Order Type, 65878-65880 [2019-25833]
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65878
Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices
provided by the fund’s primary
custodian (a bank that acts as global
custodian). The depository custody
arrangement also must meet certain
conditions. The fund or its adviser must
receive from the primary custodian (or
its agent) an initial risk analysis of the
depository arrangements, and the fund’s
contract with its primary custodian
must state that the custodian will
monitor risks and promptly notify the
fund or its adviser of material changes
in risks. The primary custodian and
other custodians also are required to
agree to exercise at least reasonable care,
prudence, and diligence.
The collection of information
requirements in rule 17f–7 are intended
to provide workable standards that
protect funds from the risks of using
foreign securities depositories while
assigning appropriate responsibilities to
the fund’s primary custodian and
investment adviser based on their
capabilities. The requirement that the
foreign securities depository meet
specified minimum standards is
intended to ensure that the depository is
subject to basic safeguards deemed
appropriate for all depositories. The
requirement that the fund or its adviser
must receive from the primary
custodian (or its agent) an initial risk
analysis of the depository arrangements,
and that the fund’s contract with its
primary custodian must state that the
custodian will monitor risks and
promptly notify the fund or its adviser
of material changes in risks, is intended
to provide essential information about
custody risks to the fund’s investment
adviser as necessary for it to approve the
continued use of the depository. The
requirement that the primary custodian
agree to exercise reasonable care is
intended to provide assurances that its
services and the information it provides
will meet an appropriate standard of
care.
The staff estimates that each of
approximately 960 investment advisers 1
will make an average of 8 responses
annually under the rule to address
depository compliance with minimum
requirements, any indemnification or
insurance arrangements, and reviews of
risk analyses or notifications. The staff
estimates each response will take 6
hours, requiring a total of approximately
48 hours for each adviser.2 Thus the
total annual burden associated with
these requirements of the rule is
1 In
October 2019, Commission staff estimated
that 960 investment advisers managed or sponsored
open-end registered funds (including exchangetraded funds) and closed-end registered funds.
2 8 responses per adviser × 6 hours per response
= 48 hours per adviser.
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approximately 46,080.3 The staff further
estimates that during each year, each of
approximately 40 global custodians will
make an average of 4 responses to
analyze custody risks and provide
notice of any material changes to
custody risk under the rule. The staff
estimates that each response will take
260 hours, requiring approximately
1,040 hours annually per global
custodian.4 Thus the total annual
burden associated with these
requirements is approximately 41,600
hours.5 The staff estimates that the total
annual hour burden associated with all
collection of information requirements
of the rule is therefore 87,680 hours.6
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act and is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules and forms.
Compliance with the collection of
information requirements of the rule is
necessary to obtain the benefit of relying
on the rule’s permission for funds to
maintain their assets in foreign
custodians. The information provided
under rule 17f–7 will not be kept
confidential. An agency may not
conduct or sponsor, and a person is not
required to respond to, a collection of
information unless it displays a
currently valid OMB control number.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information has practical utility; (b) the
accuracy of the agency’s estimate of the
burden of the collection of information;
(c) ways to enhance the quality, utility,
and clarity of the information collected;
and (d) ways to minimize the burden of
the collection of information on
respondents, 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.
Please direct your written comments
to Charles Riddle, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Cynthia
Roscoe, 100 F Street NE, Washington,
DC 20549; or send an email to: PRA_
Mailbox@sec.gov.
3 960 advisers × 48 hours per adviser = 46,080
hours.
4 260 hours per response × 4 responses per global
custodian = 1,040 hours per global custodian.
5 40 global custodians × 1,040 hours per global
custodian = 41,600 hours.
6 46,080 hours + 41,600 hours = 87,680 hours.
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Dated: November 25, 2019.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–25866 Filed 11–27–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87587; File No. SR–
CboeBZX–2019–100]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Remove its
Partial Post Only at Limit Order Type
November 22, 2019.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
21, 2019, Cboe BZX Exchange, Inc. filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) proposes to
remove its Partial Post Only at Limit
Order type. 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/
equities/regulation/rule_filings/bzx/), 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.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to remove its
Partial Post Only at Limit Order
functionality and amend its rules in
connection with the removal of this
functionality. Currently, Rule 21.1(d)(9)
provides that Partial Post Only at Limit
Orders are orders that are to be ranked
and executed on the Exchange pursuant
to Rule 21.8 (Order Display and Book
Processing) or cancelled, as appropriate,
without routing away to another options
exchange except that the order will only
remove liquidity from the BZX Options
Book under the circumstances
contemplated in subparagraphs (9)(A)
and (9)(B). Specifically, subparagraph
(9)(A) provides that a Partial Post Only
at Limit Order will remove liquidity
from the BZX Options Book up to the
full size of the order if, at the time of
receipt, it can be executed at prices
better than its limit price (i.e., price
improvement). Subparagraph (9)(B)
provides that, regardless of any liquidity
removed from the BZX Options Book
under the circumstances described in
subparagraph (9)(A), a User may enter a
Partial Post Only at Limit Order
instructing the Exchange to also remove
liquidity from the BZX Options Book at
the order’s limit price up to a designated
percentage of the remaining size of the
order after any execution pursuant to
subparagraph (9)(A) (‘‘Maximum
Remove Percentage’’) if, after removing
such liquidity at the order’s limit price,
the remainder of such order can then
post to the BZX Options Book. If no
Maximum Remove Percentage is
entered, such order will only remove
liquidity to the extent such order will
obtain price improvement as described
in subparagraph (9)(A). Rule 21.1(h)(4)
and (i)(4) also provide for display-price
slide functionality and price adjust
functionality, respectively, specific to
Partial Post Only at Limit Orders.
The Exchange proposes to remove the
Partial Post Only at Limit Order type in
Rule 21.1(d)(9), and the relevant
provisions (in Rules 21.1(h)(4) and
21.1(i)(4)) in connection with the order
type.3 User submission of this order
type is infrequent. To illustrate, only
one User submitted Partial Post Only at
Limit Orders in the last month. Because
so few Users submit Partial Post Only at
Limit Orders, the Exchange believes the
current demand does not warrant the
Exchange resources necessary for
3 As a result, the proposed change also updates
the subsequent paragraph numbering.
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ongoing System support of the order
type (e.g., the System must maintain
and apply a more complex matching
algorithm for Partial Post Only at Limit
orders than for most other order types).
Finally, the Exchange notes that the use
of Partial Post Only at Limit Orders is
voluntary and that Price Improving
Order types,4 as well as functionality
that allows Post Only Orders subject to
the display-price sliding process to
execute against resting orders at
improved prices,5 will continue to be
available to Users.
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.6 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 7 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) 8 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the proposed rule
change would remove impediments to
and perfect the mechanism of a free and
open market and a national market
system and benefit investors, because it
would delete from the Rules an order
type the Exchange will no longer offer.
Rule 21.1(d), which was previously filed
with the Commission, permits the
Exchange to determine which order
types, including the Partial Post Only at
Limit Order, are available. Therefore, it
4 See Rule 21.1(d)(6), which provides that Price
Improving Orders are orders to buy or sell an option
at a specified price at an increment smaller than the
minimum price variation in the security. Price
Improving Orders may be entered in increments as
small as (1) one cent. Price Improving Orders shall
be displayed at the minimum price variation in that
security and shall be rounded up for sell orders and
rounded down for buy orders.
5 See Rule 21.1(d)(8).
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
8 Id.
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65879
is consistent with Act to not offer this
order type. The Exchange believes it
will promote transparency in its Rules
to delete order types that the Exchange
does not make available, and will not
make available, in any class. The
Exchange notes other options exchanges
do not offer this order type.9 Moreover,
the Exchange does not believe that the
proposed rule change will affect the
protection of investors or the
maintenance of a fair and orderly
market because this order type is so
infrequently implemented. In addition
to this, the Exchange notes that use of
this order type is voluntary and the
Exchange will continue to offer other
price improving functionality. Also, the
Exchange believes the low usage rate for
Partial Post Only at Limit Orders does
not warrant the continued resources
necessary for System support of such
orders (including the application of a
particularly complex matching
algorithm required for Partial Post Only
at Limit Orders). As a result, the
Exchange believes the proposed rule
change will also remove impediments to
and perfect the mechanism of a free and
open market and national market system
by allowing the Exchange to reallocate
System capacity and resources to more
frequently elected functionality.
In addition to this, the Exchange also
believes the proposed rule change is
consistent with Section 6(b)(1) of the
Act,10 which provides that the Exchange
be organized and have the capacity to be
able to carry out the purposes of the Act
and to enforce compliance by the
Exchange’s Members and persons
associated with its Members with the
Act, the rules and regulations
thereunder, and the rules of the
Exchange. The Exchange believes that
removing a rarely used order type, and
in turn, reallocating system capacity and
resources would allow for the Exchange
to be better organized and able to carry
out the purposes of the Act and enforce
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change to remove Partial
Post Only at Limit Order types is not
designed to address any competitive
issues but rather to remove an order
type rarely used on the Exchange, which
9 See Cboe C2 Exchange, Inc. Rule 6.10(b); Cboe
EDGX Exchange, Inc. Rule 21.1(d); Cboe BZX
Exchange, Inc. Rule 21.1(d); and Nasdaq BX, Inc.
Options 3, Sec. 7(a).
10 15 U.S.C. 78f(b)(1).
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65880
Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices
is also consistent with the availability of
order types in the rules of other option
exchanges, which have been previously
filed with the Commission.
Additionally, the current Rule permits
the Exchange to not make this order
type available, which Rule was
previously filed with the Commission.
As noted above, the use of this order
type is voluntary and the Exchange will
continue to offer other price improving
functionality.
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 11 and Rule 19b–
4(f)(6) thereunder.12
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 13 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 14
permits the Commission to 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. The Commission
believes that waiver of the 30-day
operative delay is consistent with the
protection of investors and the public
interest because the order type being
eliminated is infrequently employed,15
and the Exchange will continue to offer
other price improving functionality.16
Therefore, the Commission hereby
11 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.
13 17 CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6)(iii).
15 According to the Exchange, only one User
submitted Partial Post Only at Limit Orders in the
last month.
16 See supra notes 4 and 5 and accompanying
text.
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12 17
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waives the operative delay and
designates the proposal as operative
upon filing.17
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.
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–CboeBZX–2019–100 and
should be submitted on or before
December 20, 2019.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Eduardo A. Aleman,
Deputy Secretary.
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–
CboeBZX–2019–100 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–CboeBZX–2019–100. 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,
17 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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[FR Doc. 2019–25833 Filed 11–27–19; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #16139 and #16140;
SOUTH DAKOTA Disaster Number SD–
00095]
Presidential Declaration Amendment of
a Major Disaster for Public Assistance
Only for the State of South Dakota
U.S. Small Business
Administration.
ACTION: Amendment 1.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of South Dakota (FEMA–4463–
DR), dated 09/23/2019.
Incident: Severe Storms and Flooding.
Incident Period: 05/21/2019 through
06/07/2019.
DATES: Issued on 11/20/2019.
Physical Loan Application Deadline
Date: 11/22/2019.
Economic Injury (EIDL) Loan
Application Deadline Date: 06/23/2020.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUPPLEMENTARY INFORMATION: The notice
of the President’s major disaster
declaration for Private Non-Profit
organizations in the State of SOUTH
SUMMARY:
18 17
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CFR 200.30–3(a)(12).
29NON1
]]>Agencies
[Federal Register Volume 84, Number 230 (Friday, November 29, 2019)]
[Notices]
[Pages 65878-65880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25833]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87587; File No. SR-CboeBZX-2019-100]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Remove its Partial Post Only at Limit Order Type
November 22, 2019.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 21, 2019, Cboe BZX Exchange, Inc. filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change as
described in Items I and II 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
remove its Partial Post Only at Limit Order type. 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/equities/regulation/rule_filings/bzx/), 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.
[[Page 65879]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to remove its Partial Post Only at Limit
Order functionality and amend its rules in connection with the removal
of this functionality. Currently, Rule 21.1(d)(9) provides that Partial
Post Only at Limit Orders are orders that are to be ranked and executed
on the Exchange pursuant to Rule 21.8 (Order Display and Book
Processing) or cancelled, as appropriate, without routing away to
another options exchange except that the order will only remove
liquidity from the BZX Options Book under the circumstances
contemplated in subparagraphs (9)(A) and (9)(B). Specifically,
subparagraph (9)(A) provides that a Partial Post Only at Limit Order
will remove liquidity from the BZX Options Book up to the full size of
the order if, at the time of receipt, it can be executed at prices
better than its limit price (i.e., price improvement). Subparagraph
(9)(B) provides that, regardless of any liquidity removed from the BZX
Options Book under the circumstances described in subparagraph (9)(A),
a User may enter a Partial Post Only at Limit Order instructing the
Exchange to also remove liquidity from the BZX Options Book at the
order's limit price up to a designated percentage of the remaining size
of the order after any execution pursuant to subparagraph (9)(A)
(``Maximum Remove Percentage'') if, after removing such liquidity at
the order's limit price, the remainder of such order can then post to
the BZX Options Book. If no Maximum Remove Percentage is entered, such
order will only remove liquidity to the extent such order will obtain
price improvement as described in subparagraph (9)(A). Rule 21.1(h)(4)
and (i)(4) also provide for display-price slide functionality and price
adjust functionality, respectively, specific to Partial Post Only at
Limit Orders.
The Exchange proposes to remove the Partial Post Only at Limit
Order type in Rule 21.1(d)(9), and the relevant provisions (in Rules
21.1(h)(4) and 21.1(i)(4)) in connection with the order type.\3\ User
submission of this order type is infrequent. To illustrate, only one
User submitted Partial Post Only at Limit Orders in the last month.
Because so few Users submit Partial Post Only at Limit Orders, the
Exchange believes the current demand does not warrant the Exchange
resources necessary for ongoing System support of the order type (e.g.,
the System must maintain and apply a more complex matching algorithm
for Partial Post Only at Limit orders than for most other order types).
Finally, the Exchange notes that the use of Partial Post Only at Limit
Orders is voluntary and that Price Improving Order types,\4\ as well as
functionality that allows Post Only Orders subject to the display-price
sliding process to execute against resting orders at improved
prices,\5\ will continue to be available to Users.
---------------------------------------------------------------------------
\3\ As a result, the proposed change also updates the subsequent
paragraph numbering.
\4\ See Rule 21.1(d)(6), which provides that Price Improving
Orders are orders to buy or sell an option at a specified price at
an increment smaller than the minimum price variation in the
security. Price Improving Orders may be entered in increments as
small as (1) one cent. Price Improving Orders shall be displayed at
the minimum price variation in that security and shall be rounded up
for sell orders and rounded down for buy orders.
\5\ See Rule 21.1(d)(8).
---------------------------------------------------------------------------
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.\6\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ 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) \8\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
---------------------------------------------------------------------------
In particular, the proposed rule change would remove impediments to
and perfect the mechanism of a free and open market and a national
market system and benefit investors, because it would delete from the
Rules an order type the Exchange will no longer offer. Rule 21.1(d),
which was previously filed with the Commission, permits the Exchange to
determine which order types, including the Partial Post Only at Limit
Order, are available. Therefore, it is consistent with Act to not offer
this order type. The Exchange believes it will promote transparency in
its Rules to delete order types that the Exchange does not make
available, and will not make available, in any class. The Exchange
notes other options exchanges do not offer this order type.\9\
Moreover, the Exchange does not believe that the proposed rule change
will affect the protection of investors or the maintenance of a fair
and orderly market because this order type is so infrequently
implemented. In addition to this, the Exchange notes that use of this
order type is voluntary and the Exchange will continue to offer other
price improving functionality. Also, the Exchange believes the low
usage rate for Partial Post Only at Limit Orders does not warrant the
continued resources necessary for System support of such orders
(including the application of a particularly complex matching algorithm
required for Partial Post Only at Limit Orders). As a result, the
Exchange believes the proposed rule change will also remove impediments
to and perfect the mechanism of a free and open market and national
market system by allowing the Exchange to reallocate System capacity
and resources to more frequently elected functionality.
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\9\ See Cboe C2 Exchange, Inc. Rule 6.10(b); Cboe EDGX Exchange,
Inc. Rule 21.1(d); Cboe BZX Exchange, Inc. Rule 21.1(d); and Nasdaq
BX, Inc. Options 3, Sec. 7(a).
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In addition to this, the Exchange also believes the proposed rule
change is consistent with Section 6(b)(1) of the Act,\10\ which
provides that the Exchange be organized and have the capacity to be
able to carry out the purposes of the Act and to enforce compliance by
the Exchange's Members and persons associated with its Members with the
Act, the rules and regulations thereunder, and the rules of the
Exchange. The Exchange believes that removing a rarely used order type,
and in turn, reallocating system capacity and resources would allow for
the Exchange to be better organized and able to carry out the purposes
of the Act and enforce compliance.
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\10\ 15 U.S.C. 78f(b)(1).
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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 to
remove Partial Post Only at Limit Order types is not designed to
address any competitive issues but rather to remove an order type
rarely used on the Exchange, which
[[Page 65880]]
is also consistent with the availability of order types in the rules of
other option exchanges, which have been previously filed with the
Commission. Additionally, the current Rule permits the Exchange to not
make this order type available, which Rule was previously filed with
the Commission. As noted above, the use of this order type is voluntary
and the Exchange will continue to offer other price improving
functionality.
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 \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 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.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \13\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the
Commission to 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. The
Commission believes that waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest
because the order type being eliminated is infrequently employed,\15\
and the Exchange will continue to offer other price improving
functionality.\16\ Therefore, the Commission hereby waives the
operative delay and designates the proposal as operative upon
filing.\17\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ According to the Exchange, only one User submitted Partial
Post Only at Limit Orders in the last month.
\16\ See supra notes 4 and 5 and accompanying text.
\17\ For purposes only of waiving the 30-day operative delay,
the Commission also 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-CboeBZX-2019-100 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-CboeBZX-2019-100. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeBZX-2019-100 and should be submitted
on or before December 20, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-25833 Filed 11-27-19; 8:45 am]
BILLING CODE 8011-01-P
