Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Financial Incentive Programs for Global Trading Hours Lead Market-Makers in VIX, 65859-65861 [2019-25836]

Download as PDF Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices other things, that the rules of OCC be designed to promote the prompt and accurate clearance and settlement of securities transactions and to assure the safeguarding of securities and funds which are in the custody or control of OCC or for which it is responsible.13 • Rule 17Ad–22(e)(15) of the Exchange Act, which requires that a covered clearing agency establish, implement, maintain, and enforce written policies and procedures reasonably designed to identify, monitor, and manage the covered clearing agency’s general business risk and hold sufficient liquid net assets funded by equity to cover potential general business losses so that the covered clearing agency can continue operations and services as a going concern if those losses materialize, including by taking the actions described in Rules 17Ad–22(e)(15)(i)– (iii) under the Exchange Act.14 IV. Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the Proposed Rule Change with respect to the issues identified above, as well as any other concerns they may have with the Proposed Rule Change. In particular, the Commission invites the written views of interested persons concerning whether the Proposed Rule Change is consistent with Sections 17A(b)(3)(D) and 17A(b)(3)(F) of the Exchange Act and Rule 17Ad–22(e)(15) thereunder, cited above, or any other provision of the Exchange Act, rules, and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b–4, any request for an opportunity to make an oral presentation.15 Interested persons are invited to submit written data, views, and arguments regarding whether the Proposed Rule Change should be approved or disapproved by December 16, 2019. Any person who wishes to file 13 15 U.S.C. 78q–1(b)(3)(F). CFR 240.17Ad–22(e)(15). 15 Section 19(b)(2) of the Act, as amended by the Securities Acts Amendments of 1975, Public Law 94–29, 89 Stat. 97 (1975), grants the Commission flexibility to determine what type of proceeding— either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Acts Amendments of 1975, Report of the Senate Committee on Banking, Housing and Urban Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). khammond on DSKJM1Z7X2PROD with NOTICES 14 17 VerDate Sep<11>2014 16:49 Nov 27, 2019 Jkt 250001 a rebuttal to any other person’s submission must file that rebuttal by December 20, 2019. Comments may be submitted by any of the following methods: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–25841 Filed 11–27–19; 8:45 am] Electronic Comments BILLING CODE 8011–01–P • Use the Commission’s internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File No. SR– OCC–2019–007 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 No. SR–OCC–2019–007. 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 (http://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 OCC and on OCC’s website at https://www.theocc.com/about/ publications/bylaws.jsp. 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 No. SR–OCC–2019–007 and should be submitted on or before December 16, 2019. If comments are received, any rebuttal comments should be submitted on or before December 20, 2019. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87590; File No. SR–CBOE– 2019–109] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Financial Incentive Programs for Global Trading Hours Lead Market-Makers in VIX 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 15, 2019, Cboe Exchange, Inc. (‘‘Exchange’’ or ‘‘Cboe Options’’) filed with the Securities and Exchange Commission (‘‘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. 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 amend its financial incentive programs for Global Trading Hours Lead MarketMakers in VIX. 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 (http://www.cboe.com/ AboutCBOE/CBOELegal RegulatoryHome.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 1 15 16 17 PO 00000 CFR 200.30–3(a)(12). Frm 00084 Fmt 4703 65859 Sfmt 4703 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\29NON1.SGM 29NON1 65860 Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Global Trading Hours (‘‘GTH’’) VIX Premium day of the month) if the LMM(s): (1) Provide continuous electronic quotes during GTH that meet or exceed the following heightened quoting standards in at least 99% of the VIX series 90% of the time in a given month: Lead Market-Makers (‘‘LMMs’’) Incentive Program, effective November 18, 2019. Background By way of background, pursuant to the Fees Schedule, a LMM in VIX will receive a rebate for that month in the amount of a pro-rata share of a compensation pool equal to $20,000 times the number of LMMs in that class (or pro-rated amount if an appointment begins after the first trading day of the month or ends prior to the last trading Expiring Near term Mid term Long term 7 days or less 8 days to 60 days 61 days to 270 days 271 days or Greater Width Width Level Width $0–$3.00 .......................... $3.01–$5.00 ..................... $5.01–$10.00 ................... $10.01–$30.00 ................. $30.01–$100.00 ............... Greater than $100.00 ....... Size $0.50 0.75 1.00 3.00 5.00 10.00 25 15 10 5 3 1 Additionally, a GTH LMM in VIX is not currently obligated to satisfy the heightened quoting standards described in the table above. Rather, an LMM is eligible to receive the rebate if they satisfy the heightened quoting standards above, which the Exchange believes encourage LMMs to provide liquidity during GTH. The Exchange may also consider other exceptions to this quoting standard based on demonstrated legal or regulatory requirements or other mitigating circumstances. khammond on DSKJM1Z7X2PROD with NOTICES Proposed Change The Exchange now wishes to amend the heighted quoting standard under the GTH VIX LMM incentive program. Particularly, the Exchange proposes to eliminate the current size and width requirements and in their place adopt a maximum allowable width standard. The Exchange notes that the proposed change is designed to make the heightened quoting standard easier to attain. The Exchange believes that by easing the standard, it will encourage VIX GTH LMM(s) who cannot meet the current standard to continue to provide liquidity in VIX during GTH. As such, the Exchange proposes to slightly ease the criteria and amend the program to provide that in order to receive the rebate under the program, an LMM must: provide continuous electronic quotes during GTH that meet or exceed the following heightened quoting standards in at least 99% of the VIX VerDate Sep<11>2014 16:49 Nov 27, 2019 Jkt 250001 Width Size $0.40 0.60 0.80 1.00 3.00 5.00 50 30 20 10 5 1 Size $0.50 0.75 1.00 3.00 5.00 10.00 series 90% of the time in a given month: 3 25 15 10 5 3 1 Size $1.00 1.50 2.00 5.00 7.00 12.00 10 7 5 3 2 1 purchase more logical connectivity based on its increased capacity needs. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the $0.00–$100.00 ............................ $10.00 ‘‘Act’’) and the rules and regulations $100.01–$200.00 ........................ 16.00 thereunder applicable to the Exchange Greater than $200.00 ................. 24.00 and, in particular, the requirements of Section 6(b) of the Act.5 Specifically, As is the case today, VIX GTH the Exchange believes the proposed rule LMM(s) will still not be obligated to change is consistent with the Section satisfy the amended heightened quoting 6(b)(5) 6 requirements that the rules of an exchange be designed to prevent standard. The Exchange believes the fraudulent and manipulative acts and program, as amended, will encourage VIX GTH LMM(s) to provide liquidity in practices, to promote just and equitable VIX during GTH. The Exchange believes principles of trade, to foster cooperation and coordination with persons engaged the rebate provided under the VIX GTH in regulating, clearing, settling, LMM program continues to encourage VIX GTH LMM(s) to provide liquidity in processing information with respect to, and facilitating transactions in VIX options during GTH, including securities, to remove impediments to during the opening.4 Additionally, the and perfect the mechanism of a free and Exchange notes that a VIX GTH LMM open market and a national market may need to undertake expenses to be system, and, in general, to protect able to quote at a significantly investors and the public interest. heightened standard in VIX, such as Additionally, the Exchange believes the proposed rule change is consistent with 3 For the month of November 2019, the Exchange Section 6(b)(4) of the Act,7 which proposes to apply the heightened quoting standard requires that Exchange rules provide for from November 18 to November 30, in light of the mid-month proposal to modify the heighted quoting the equitable allocation of reasonable dues, fees, and other charges among its standard. The Exchange also notes the previous LMM term expired October 1, 2019, and the Trading Permit Holders and other Exchange intends to appoint a new LMM effective persons using its facilities. November 18, 2019. Such LMM will be eligible for The Exchange believes amending the the full financial payment for November 2019 if the GTH VIX LMM Incentive Program is LMM meets the heightened quoting standard from Maximum allowable width Premium level November 18 to November 30. 4 The Exchange notes that quotes qualify only when the series is open (i.e., pre-open quotes do not count). PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 7 15 U.S.C. 78f(b)(4). 6 15 E:\FR\FM\29NON1.SGM 29NON1 Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / Notices khammond on DSKJM1Z7X2PROD with NOTICES reasonable as a VIX GTH LMM will still be eligible to receive the proposed financial payment. The Exchange believes the monthly payment continues to be commensurate with the heightened quoting standard, even as amended. The Exchange believes the proposed changes to the heightened quoting standard are reasonable and appropriate as the changes result in a more attainable incentive program, while still acting as an incentive for a VIX GTH LMM to provide liquid and active markets in VIX during GTH. The Exchange believes it is equitable and not unfairly discriminatory to continue to only offer this financial incentive to VIX GTH LMM(s) because it benefits all market participants trading VIX during GTH to encourage the LMM(s) to satisfy the heightened quoting standard, which ensures, and may even provide increased, liquidity, which thereby may provide more trading opportunities and tighter spreads. Indeed, the Exchange notes that the VIX GTH LMM(s) serve a crucial role in providing quotes and the opportunity for market participants to trade VIX, which can lead to increased volume, providing a robust market. The Exchange ultimately wishes to ensure a GTH LMM is adequately incentivized to provide liquid and active markets in VIX during GTH to encourage liquidity. The Exchange believes that the program, even as amended, will continue to encourage increased quoting to add liquidity in VIX, thereby protecting investors and the public interest. The Exchange also notes that a VIX GTH LMM may have added costs each month that it needs to undertake in order to satisfy that heightened quoting standard (e.g., having to purchase additional logical connectivity). The Exchange believes the proposed amendments are equitable and not unfairly discriminatory because they apply to any TPH that is appointed as a VIX GTH LMM equally. Additionally, if a VIX GTH LMM does not satisfy the heightened quoting standard for any given month, then it simply will not receive the offered payment for that month. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule changes will impose any burden on competition that are not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because it applies uniformly to similarly VerDate Sep<11>2014 16:49 Nov 27, 2019 Jkt 250001 situated VIX GTH LMMs, which market participants play a crucial role in providing active and liquid markets in VIX during GTH. The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because VIX options are a proprietary product that will only be traded on Cboe Options. To the extent that the proposed changes make Cboe Options a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become Cboe Options market participants. 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 foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and paragraph (f) of Rule 19b–4 9 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CBOE–2019–109 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange 8 15 9 17 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). Frm 00086 Fmt 4703 Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CBOE–2019–109. 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 (http://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–CBOE–2019–109 and should be submitted on or before December 20, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–25836 Filed 11–27–19; 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. Extension: Rule 17a–6, SEC File No. 270–506, OMB Control No. 3235–0564. 10 17 Sfmt 4703 65861 E:\FR\FM\29NON1.SGM CFR 200.30–3(a)(12). 29NON1

Agencies

[Federal Register Volume 84, Number 230 (Friday, November 29, 2019)]
[Notices]
[Pages 65859-65861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25836]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87590; File No. SR-CBOE-2019-109]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Financial Incentive Programs for Global Trading Hours Lead Market-
Makers in VIX

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 15, 2019, Cboe Exchange, Inc. (``Exchange'' or ``Cboe 
Options'') filed with the Securities and Exchange Commission 
(``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.
---------------------------------------------------------------------------

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 amend its financial incentive programs for Global Trading Hours Lead 
Market-Makers in VIX. 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 (http://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

[[Page 65860]]

statements may be examined at the places specified in Item IV below. 
The Exchange has prepared summaries, set forth in sections A, B, and C 
below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Global Trading Hours (``GTH'') 
VIX Lead Market-Makers (``LMMs'') Incentive Program, effective November 
18, 2019.
Background
    By way of background, pursuant to the Fees Schedule, a LMM in VIX 
will receive a rebate for that month in the amount of a pro-rata share 
of a compensation pool equal to $20,000 times the number of LMMs in 
that class (or pro-rated amount if an appointment begins after the 
first trading day of the month or ends prior to the last trading day of 
the month) if the LMM(s): (1) Provide continuous electronic quotes 
during GTH that meet or exceed the following heightened quoting 
standards in at least 99% of the VIX series 90% of the time in a given 
month:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Premium                              Expiring                  Near term                 Mid term                  Long term
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       7 days or less           8 days to 60 days        61 days to 270 days       271 days or Greater
                      Level                      -------------------------------------------------------------------------------------------------------
                                                     Width         Size        Width         Size        Width         Size        Width         Size
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0-$3.00........................................        $0.50           25        $0.40           50        $0.50           25        $1.00           10
$3.01-$5.00.....................................         0.75           15         0.60           30         0.75           15         1.50            7
$5.01-$10.00....................................         1.00           10         0.80           20         1.00           10         2.00            5
$10.01-$30.00...................................         3.00            5         1.00           10         3.00            5         5.00            3
$30.01-$100.00..................................         5.00            3         3.00            5         5.00            3         7.00            2
Greater than $100.00............................        10.00            1         5.00            1        10.00            1        12.00            1
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Additionally, a GTH LMM in VIX is not currently obligated to 
satisfy the heightened quoting standards described in the table above. 
Rather, an LMM is eligible to receive the rebate if they satisfy the 
heightened quoting standards above, which the Exchange believes 
encourage LMMs to provide liquidity during GTH. The Exchange may also 
consider other exceptions to this quoting standard based on 
demonstrated legal or regulatory requirements or other mitigating 
circumstances.
Proposed Change
    The Exchange now wishes to amend the heighted quoting standard 
under the GTH VIX LMM incentive program. Particularly, the Exchange 
proposes to eliminate the current size and width requirements and in 
their place adopt a maximum allowable width standard. The Exchange 
notes that the proposed change is designed to make the heightened 
quoting standard easier to attain. The Exchange believes that by easing 
the standard, it will encourage VIX GTH LMM(s) who cannot meet the 
current standard to continue to provide liquidity in VIX during GTH. As 
such, the Exchange proposes to slightly ease the criteria and amend the 
program to provide that in order to receive the rebate under the 
program, an LMM must: provide continuous electronic quotes during GTH 
that meet or exceed the following heightened quoting standards in at 
least 99% of the VIX series 90% of the time in a given month: \3\
---------------------------------------------------------------------------

    \3\ For the month of November 2019, the Exchange proposes to 
apply the heightened quoting standard from November 18 to November 
30, in light of the mid-month proposal to modify the heighted 
quoting standard. The Exchange also notes the previous LMM term 
expired October 1, 2019, and the Exchange intends to appoint a new 
LMM effective November 18, 2019. Such LMM will be eligible for the 
full financial payment for November 2019 if the LMM meets the 
heightened quoting standard from November 18 to November 30.

------------------------------------------------------------------------
                                                                Maximum
                        Premium level                          allowable
                                                                 width
------------------------------------------------------------------------
$0.00-$100.00...............................................      $10.00
$100.01-$200.00.............................................       16.00
Greater than $200.00........................................       24.00
------------------------------------------------------------------------

    As is the case today, VIX GTH LMM(s) will still not be obligated to 
satisfy the amended heightened quoting standard. The Exchange believes 
the program, as amended, will encourage VIX GTH LMM(s) to provide 
liquidity in VIX during GTH. The Exchange believes the rebate provided 
under the VIX GTH LMM program continues to encourage VIX GTH LMM(s) to 
provide liquidity in VIX options during GTH, including during the 
opening.\4\ Additionally, the Exchange notes that a VIX GTH LMM may 
need to undertake expenses to be able to quote at a significantly 
heightened standard in VIX, such as purchase more logical connectivity 
based on its increased capacity needs.
---------------------------------------------------------------------------

    \4\ The Exchange notes that quotes qualify only when the series 
is open (i.e., pre-open quotes do not count).
---------------------------------------------------------------------------

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.\5\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \6\ 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 
Section 6(b)(4) of the Act,\7\ which requires that Exchange rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its Trading Permit Holders and other persons using 
its facilities.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes amending the GTH VIX LMM Incentive Program is

[[Page 65861]]

reasonable as a VIX GTH LMM will still be eligible to receive the 
proposed financial payment. The Exchange believes the monthly payment 
continues to be commensurate with the heightened quoting standard, even 
as amended. The Exchange believes the proposed changes to the 
heightened quoting standard are reasonable and appropriate as the 
changes result in a more attainable incentive program, while still 
acting as an incentive for a VIX GTH LMM to provide liquid and active 
markets in VIX during GTH. The Exchange believes it is equitable and 
not unfairly discriminatory to continue to only offer this financial 
incentive to VIX GTH LMM(s) because it benefits all market participants 
trading VIX during GTH to encourage the LMM(s) to satisfy the 
heightened quoting standard, which ensures, and may even provide 
increased, liquidity, which thereby may provide more trading 
opportunities and tighter spreads. Indeed, the Exchange notes that the 
VIX GTH LMM(s) serve a crucial role in providing quotes and the 
opportunity for market participants to trade VIX, which can lead to 
increased volume, providing a robust market. The Exchange ultimately 
wishes to ensure a GTH LMM is adequately incentivized to provide liquid 
and active markets in VIX during GTH to encourage liquidity. The 
Exchange believes that the program, even as amended, will continue to 
encourage increased quoting to add liquidity in VIX, thereby protecting 
investors and the public interest. The Exchange also notes that a VIX 
GTH LMM may have added costs each month that it needs to undertake in 
order to satisfy that heightened quoting standard (e.g., having to 
purchase additional logical connectivity). The Exchange believes the 
proposed amendments are equitable and not unfairly discriminatory 
because they apply to any TPH that is appointed as a VIX GTH LMM 
equally. Additionally, if a VIX GTH LMM does not satisfy the heightened 
quoting standard for any given month, then it simply will not receive 
the offered payment for that month.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition that are not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
believe that the proposed rule change will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because it applies uniformly to 
similarly situated VIX GTH LMMs, which market participants play a 
crucial role in providing active and liquid markets in VIX during GTH. 
The Exchange does not believe that the proposed rule change will impose 
any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because VIX 
options are a proprietary product that will only be traded on Cboe 
Options. To the extent that the proposed changes make Cboe Options a 
more attractive marketplace for market participants at other exchanges, 
such market participants are welcome to become Cboe Options market 
participants.

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 foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and paragraph (f) of Rule 19b-4 \9\ 
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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CBOE-2019-109 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-2019-109. 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 (http://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-CBOE-2019-109 and should be submitted on 
or before December 20, 2019.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-25836 Filed 11-27-19; 8:45 am]
 BILLING CODE 8011-01-P