Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Add a New Version of the Silexx Platform, 24045-24048 [2020-09126]
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Federal Register / Vol. 85, No. 84 / Thursday, April 30, 2020 / Notices
POSTAL SERVICE
SECURITIES AND EXCHANGE
COMMISSION
Product Change—Priority Mail
Negotiated Service Agreement
[Release No. 34–88741; File No. SR–CBOE–
2020–040]
Postal ServiceTM.
Notice.
AGENCY:
ACTION:
SUMMARY: The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice: April 30,
2020.
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on April 17, 2020,
it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Contract 609 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2020–121, CP2020–129.
Sean Robinson,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2020–09149 Filed 4–29–20; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
Product Change—Priority Mail
Negotiated Service Agreement
Postal Service TM.
Notice.
AGENCY:
jbell on DSKJLSW7X2PROD with NOTICES
ACTION:
SUMMARY: The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice: April 30,
2020.
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on April 15, 2020,
it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Contract 607 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2020–118, CP2020–126.
Sean Robinson,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2020–09147 Filed 4–29–20; 8:45 am]
BILLING CODE 7710–12–P
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Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Add a New Version of
the Silexx Platform
April 24, 2020.
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 April 20,
2020, 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 and II below, which Items have
been prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to add a
new version of the Silexx platform. 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/CBOELegalRegulatory
Home.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.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to add a new
version of the Silexx platform (‘‘Cboe
Silexx’’).5 By way of background, Silexx
is a User-optional order entry and
management trading platform. The
current versions of the Silexx platform,
other than Silexx FLEX, are designed so
that a User may enter orders into the
platform to send to the executing broker,
including Trading Permit Holders
(‘‘TPHs’’), of its choice with
connectivity to the platform. The
executing broker can then send orders to
Cboe Options (if the broker-dealer is a
TPH) or other U.S. exchanges (and
trading centers) in accordance with the
User’s instructions. Users cannot
directly route orders through any of the
current versions of Silexx, other than
Silexx FLEX, to an exchange or trading
center nor is the platform integrated into
or directly connected to Cboe Option’s
System. The Exchange recently made
available an additional version of the
Silexx platform, Silexx FLEX, which
supports the trading of FLEX Options
and allows authorized Users with direct
access to the Exchange.6
In addition to supporting the trading
of FLEX Options,7 the proposed new
version, Cboe Silexx, will also support
the trading of non-FLEX options and
allow for direct access to the Exchange.
Additionally, functionality that will be
available on Cboe Silexx, which was
previously adopted by the Exchange and
is already available on other versions of
Silexx, include real-time data, alerts,
trade reports, views of exchange books,
management of the customer’s orders
and positions, simple and complex
order tickets, basic risk features, and
availability of clearing fields in order
tickets.8 The Exchange notes that Cboe
Silexx is essentially the same platform,
with the same applicable functionality
as Silexx FLEX, except that it
additionally supports direct access for
non-FLEX trading. As is the case with
Silexx FLEX, only authorized Users and
associated persons of Users may
5 The Exchange originally filed this proposed rule
change on April 15, 2020 (SR–CBOE–2020–038). On
April 20, 2020, the Exchange withdrew that filing
and replaced it with this filing.
6 See Securities Exchange Act Release No. 87028
(September 19, 2019) 84 FR 50529 (September 25,
2019) (SR–CBOE–2019–061).
7 Only Users authorized for direct access and who
are approved to trade FLEX Options may trade
FLEX Options via Cboe Silexx.
8 See Securities Exchange Act Release No. 82088
(November 15, 2017) 82 FR 55449 (November 21,
2017) (SR–CBOE–2017–068).
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establish connectivity to and directly
access the Exchange, pursuant to Rule
5.5, however, a User that is not
authorized for direct access will be able
to send orders through the Exchange’s
broker community who will have access
to Cboe Silexx and can submit orders
directly on the User’s behalf.9 The
Exchange notes there will be a
verification process for Users that wish
to access Cboe Silexx to ensure that
each User is authorized for direct
Exchange access. Each verified User will
require a username and password to
authenticate their access. The Exchange
notes that those authorized to directly
access the Exchange must uphold
supervisory duties over those associated
with it to ensure that only authorized
Users access the platform. Other than
the above noted differences, the new
Cboe Silexx platform will function in
the same manner as the Silexx versions
currently available to Users: It will be
completely voluntary; orders entered
through the platform will receive no
preferential treatment as compared to
orders electronically sent to Cboe
Options in any other manner; orders
entered through the platform will be
subject to current trading rules in the
same manner as all other orders sent to
the Exchange, which is the same as
orders that are sent through the
Exchange’s System today; the
Exchange’s System will not distinguish
between orders sent from Silexx and
orders sent in any other manner; and
Silexx 10 will provide technical support,
maintenance and user training for the
new platform version upon the same
terms and conditions for all Users.11
The Exchange notes that it currently
offers a similar front-end order entry
system, the PULSe workstation, which
also permits connectivity to Cboe
Options. The Exchange notes that no
changes are being made to the other
current Silexx platform versions.
The Exchange lastly noted that at this
time, it does not propose to assess a fee
9 The Exchange notes that Users may also send
orders through a Cboe Silexx certified broker, once
brokers begin electing to become certified. The
Exchange has implemented a certification process
which is open to any broker that supports trading
and will allow Users without direct access to
submit through an electronic broker certified with
Silexx. The Exchange currently conducts similar
certifications for any broker that wishes to connect
to Cboe, and for other platform offerings (e.g.
PULSe).
10 Silexx is the wholly owned subsidiary of Cboe
Options’ parent company, Cboe Global Markets,
Inc., which purchased Silexx in 2017.
11 See Securities Exchange Act Release No. 82088
(November 15, 2017), 82 FR 55443 (November 21,
2017) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change To Describe
Functionality of and Adopt Fees for a New FrontEnd Order Entry and Management Platform) (SR–
CBOE–2017–068).
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in connection with the Cboe Silexx
platform.12
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.13 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 14 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) 15 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
Additionally, the Exchange also believes
the proposed rule change is consistent
with Section 6(b)(4) of the Act,16 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.
The Exchange believes that offering
the Cboe Silexx platform to market
participants protects investors and is in
the public interest because it will allow
the Exchange to directly offer Users an
order entry and management tool for
both non-FLEX and FLEX trading in
addition to the technology products it
currently offers, such as the other
versions of the Silexx platform and the
PULSe workstation. Indeed, as noted
above, the Cboe Silexx is essentially the
same platform as Silexx FLEX in
particular, but merely allows for nonFLEX trading in addition to supporting
FLEX trading. In addition, firms can
create their own proprietary front-end
order entry technology or obtain
systems with such functionality from
12 The Exchange will submit a separate rule filing
to address any fees it may wish to adopt in the
future.
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(5).
15 Id.
16 15 U.S.C. 78f(b)(4).
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third-party vendors.17 The Exchange
believes providing an alternative tool for
trading, may encourage more Users to
submit orders in both FLEX and nonFLEX options (including into price
improvement auctions), which may lead
to additional execution opportunities
for market participants and liquidity in
the market, which ultimately benefits
investors.
The Exchange believes the proposed
rule change does not discriminate
among market participants because use
of the Cboe Silexx platform is
completely voluntary. Users can choose
to route orders, including to Cboe
Options, and directly submit orders to
Cboe Options, without the use of the
platform. The Exchange is making the
platform available as a convenience to
market participants, who will continue
to have the option to use any order entry
and management system available in the
marketplace to send orders to the
Exchange and other exchanges; the
platform is merely an alternative that
will be offered by the Exchange. Cboe
Silexx is not an exclusive means
available to market participants to send
orders to Cboe Options or other markets.
Any orders sent through the platform to
Cboe Options for execution will receive
no preferential treatment. Additionally,
Cboe Silexx will be available to all
market participants, and the Exchange
will license the platform to market
participants pursuant to the same terms
and conditions.
The Exchange believes Cboe Silexx
removes impediments to and perfects
the mechanism of a free and open
market and a national market system
because users have discretion to
determine to which broker-dealer they
will route orders from the platform.
Non-broker-dealer users may separately
enter into an agreement with a brokerdealer (the Exchange will have no
involvement with the entry into such
agreements), which can provide for
routing to U.S. options and stock
exchanges (and trading centers). Only
Trading Permit Holders will continue to
be permitted to directly submit orders
using Cboe Silexx to Cboe Options, and
only members of other U.S. exchanges
will be able to enter orders for execution
at those exchanges that they receive
from the platform. The Exchange also
notes that broker-dealers must continue
to ensure that orders they receive from
the platform will be subject to
applicable pre-trade risk control
17 Market participants are free to do so by
accessing the Exchange’s specs via the publicly
accessible Application Programming Interface and
using such information in order to support trading
within their own technology, software, and frontend systems.
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requirements of the broker-dealer that
directly submits the orders to an
exchange in accordance with Rule
15c3–5 under the Act.18
The Exchange believes that its
reasonable to not assess a monthly
Login ID fee for Cboe Silexx as market
participants won’t be subject to a fee for
this product. Additionally, the
Exchange notes Silexx FLEX is also
currently provided at no cost.19 The
Exchange believes not assessing a fee at
this time also serves as an incentive to
market participants to start using the
Silexx platform as a trading tool on their
trading desks. The proposal is equitable
and not unfairly discriminatory as it
applies to all market participants.
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 change will not impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because the Exchange will make the
Cboe Silexx version of the platform
available to all market participants and
at no additional cost. Indeed, all market
participants may use Cboe Silexx, both
those with direct access and those
without, by sending orders through the
Exchange’s broker community who will
be able to submit orders directly though
Cboe Silexx.
As described in detail above, the use
of the platform will be completely
voluntary and market participants will
continue to have the flexibility to use
any entry and management tool that is
proprietary or from third-party vendors,
and/or market participants may choose
any executing brokers to enter their
orders. The proposed platform is not an
exclusive means of trading, and if
market participants believe that other
products, vendors, front-end builds, etc.
available in the marketplace are more
beneficial than the Cboe Silexx
platform, they may simply use those
products instead. Use of such
functionality is completely voluntary.
Also, the Exchange notes that use of the
platform will not provide market
participants with any additional access
to the Exchange than that which is
available through the use of any other
front-end order entry system supporting
trading. Orders executed through the
platform will not receive preferential
treatment and the Exchange’s System
18 See
19 See
17 CFR 240.15c3–5.
Cboe Silexx Fees Schedule.
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will not distinguish between orders sent
from Cboe Silexx and orders sent in any
other manner. The Exchange notes that
similar platforms, such as other Silexx
versions and PULSe workstations, are
currently offered today.
The Exchange does not believe that
the proposed change will impose any
burden on intermarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because Cboe Options will be offering a
type of product that is widely available
throughout the industry, including from
some exchanges. As noted above,
market participants can also develop
their own proprietary products with the
same functionality. Additionally, ISE
currently offers a similar front-end order
entry application (PrecICE). The offering
of Cboe Silexx to market participants to
enter and manage orders for routing or
submitting to U.S. exchanges will be an
addition to the Exchange’s current suite
of technology products it offers,
including other current Silexx
platforms. As such, market participants
will be able to choose to execute, or
continue to execute, orders through any
of these means.
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 20 and Rule 19b–
4(f)(6) thereunder.21
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 22 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 23
20 15
U.S.C. 78s(b)(3)(A).
21 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.
22 17 CFR 240.19b–4(f)(6).
23 17 CFR 240.19b–4(f)(6)(iii).
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24047
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
requested that the Commission waive
the 30-day operative delay so that the
proposed rule change may become
operative upon filing. Cboe Options
asserts that the proposed rule change
doesn’t present novel or unique issues
because the proposed Cboe Silexx
platform is similar to technology already
available on the Exchange.24 The
Exchange notes that the proposed Cboe
Silexx platform is an extension of the
Silexx FLEX platform, with the main
substantive difference being that it
permits entry of non-FLEX orders, as
discussed above. The Commission
believes that waiver of the 30-day
operative delay is consistent with the
protection of investors and the public
interest. The Commission hereby waives
the operative delay and designates the
proposed rule change operative upon
filing.25
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2020–040 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.
24 See
supra note 6.
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).
25 For
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All submissions should refer to File
Number SR–CBOE–2020–040. 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–CBOE–2020–040 and
should be submitted on or before May
21, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–09126 Filed 4–29–20; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. IA–5488/File No. 803–00246]
Edmunds Private Capital, LLC
April 24, 2020.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
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AGENCY:
Notice of application for an exemptive
order under section 202(a)(11)(H) of the
Investment Advisers Act of 1940
(‘‘Advisers Act’’).
Applicant: Edmunds Private Capital,
LLC (‘‘Applicant’’).
26 17
CFR 200.30–3(a)(12).
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Relevant Advisers Act Sections:
Exemption requested under section
202(a)(11)(H) of the Advisers Act from
section 203(a)(11) of the Advisers Act.
Summary of Application: Applicant
requests that the Commission issue an
order declaring it to be a person not
within the intent of section 202(a)(11) of
the Advisers Act, which defines the
term ‘‘investment adviser.’’
Filing Dates: The application was
filed on April 13, 2018, and amended on
October 17, 2018, April 11, 2019,
September 23, 2019, December 19, 2019,
and January 29, 2020.
Hearing or Notification of Hearing: An
order granting the application will be
issued unless the Commission orders a
hearing. Interested persons may request
a hearing by emailing the Commission’s
Secretary at Secretarys-Office@sec.gov
and serving the Applicant with a copy
of the request by email. Hearing requests
should be received by the Commission
by 5:30 p.m. on May 19, 2020 and
should be accompanied by proof of
service on the Applicant, in the form of
an affidavit or, for lawyers, a certificate
of service. Pursuant to rule 0–5 under
the Advisers Act, hearing requests
should state the nature of the writer’s
interest, any facts bearing upon the
desirability of a hearing on the matter,
the reason for the request, and the issues
contested. Persons may request
notification of a hearing by emailing the
Commission’s Secretary at SecretarysOffice@sec.gov.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicants:
S. Brian Farmer, Esq., bfarmer@hflaw.com.
FOR FURTHER INFORMATION CONTACT:
Laura J. Riegel, Senior Counsel, at (202)
551–3038 or Andrea Ottomanelli
Magovern, Branch Chief, at (202) 551–
6821 (Division of Investment
Management, Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
website either at https://www.sec.gov/
rules/iareleases.shtml or by calling (202)
551–8090.
Applicant’s Representations
1. Applicant is a multi-generational
single-family office that provides
services to the family and descendants
of Henry Garnett Chesley. Applicant is
wholly-owned by Family Clients and is
exclusively controlled by one or more
Family Members and/or Family Entities
in compliance with rule 202(a)(11)(G)–
1 (‘‘Family Office Rule’’). For purposes
of the application, the term ‘‘Chesley
Family’’ means the lineal descendants
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of Henry Garnett Chesley, their spouses
or spousal equivalents, and all other
persons and entities that qualify as
Family Clients as defined in paragraph
(d)(4) of the Family Office Rule.1
Capitalized terms herein have the same
meaning as defined in the Family Office
Rule.
2. Applicant provides both advisory
and non-advisory services (collectively,
the ‘‘Services’’) to members of the
Chesley Family. Any Service provided
by Applicant that relates to investment
advice about securities or may
otherwise be construed as advisory in
nature is considered an ‘‘Advisory
Service.’’
3. Prior to forming Applicant, Paul C.
Edmunds was associated with a brokerdealer and afterwards a registered
investment adviser (‘‘Predecessor RIA’’)
that for approximately 24 years
managed substantially all of the
advisory accounts of the Chesley Family
and the accounts of the Additional
Family Clients (as defined below).
Effective as of September, 2015, Paul C.
Edmunds terminated his association
with the Predecessor RIA and formed
Applicant. Commencing October 1,
2015, the advisory accounts of the
Family Clients and the Additional
Family Clients managed by the
Predecessor RIA were transitioned to
Applicant.
4. Applicant represents that: (i) Each
of the persons served by Applicant is a
Family Client, i.e., Applicant has no
investment advisory clients other than
Family Clients as required by paragraph
(b)(1) of the Family Office Rule, with the
limited exception that Applicant
provides Services to the Additional
Family Clients (as defined below), (ii)
Applicant is owned and controlled in a
manner that complies in all respects
with paragraph (b)(2) of the Family
Office Rule, and (iii) Applicant does not
hold itself out to the public as an
investment adviser as required by
paragraph (b)(3) of the Family Office
Rule. At the time of the application,
Applicant represents that Family Clients
that are natural persons account for
approximately 67% of the natural
persons to whom Applicant provides
Advisory Services.
5. Applicant provides Services,
including Advisory Services, to the
parents of the spouse of Paul C.
Edmunds (the ‘‘Additional Family
Clients’’). The Additional Family
Clients do not have an ownership
interest in Applicant. The assets owned
by the Additional Family Clients
1 Specifically, Applicant is wholly-owned and
exclusively controlled by Paul C. Edmunds II, a
lineal descendant of Henry Garnett Chesley.
E:\FR\FM\30APN1.SGM
30APN1
]]>Agencies
[Federal Register Volume 85, Number 84 (Thursday, April 30, 2020)]
[Notices]
[Pages 24045-24048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09126]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88741; File No. SR-CBOE-2020-040]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Add a
New Version of the Silexx Platform
April 24, 2020.
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 April 20, 2020, 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 and II
below, which Items have been prepared by the Exchange. The Exchange
filed the proposal as a ``non-controversial'' proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to add a new version of the Silexx platform. 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to add a new version of the Silexx platform
(``Cboe Silexx'').\5\ By way of background, Silexx is a User-optional
order entry and management trading platform. The current versions of
the Silexx platform, other than Silexx FLEX, are designed so that a
User may enter orders into the platform to send to the executing
broker, including Trading Permit Holders (``TPHs''), of its choice with
connectivity to the platform. The executing broker can then send orders
to Cboe Options (if the broker-dealer is a TPH) or other U.S. exchanges
(and trading centers) in accordance with the User's instructions. Users
cannot directly route orders through any of the current versions of
Silexx, other than Silexx FLEX, to an exchange or trading center nor is
the platform integrated into or directly connected to Cboe Option's
System. The Exchange recently made available an additional version of
the Silexx platform, Silexx FLEX, which supports the trading of FLEX
Options and allows authorized Users with direct access to the
Exchange.\6\
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\5\ The Exchange originally filed this proposed rule change on
April 15, 2020 (SR-CBOE-2020-038). On April 20, 2020, the Exchange
withdrew that filing and replaced it with this filing.
\6\ See Securities Exchange Act Release No. 87028 (September 19,
2019) 84 FR 50529 (September 25, 2019) (SR-CBOE-2019-061).
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In addition to supporting the trading of FLEX Options,\7\ the
proposed new version, Cboe Silexx, will also support the trading of
non-FLEX options and allow for direct access to the Exchange.
Additionally, functionality that will be available on Cboe Silexx,
which was previously adopted by the Exchange and is already available
on other versions of Silexx, include real-time data, alerts, trade
reports, views of exchange books, management of the customer's orders
and positions, simple and complex order tickets, basic risk features,
and availability of clearing fields in order tickets.\8\ The Exchange
notes that Cboe Silexx is essentially the same platform, with the same
applicable functionality as Silexx FLEX, except that it additionally
supports direct access for non-FLEX trading. As is the case with Silexx
FLEX, only authorized Users and associated persons of Users may
[[Page 24046]]
establish connectivity to and directly access the Exchange, pursuant to
Rule 5.5, however, a User that is not authorized for direct access will
be able to send orders through the Exchange's broker community who will
have access to Cboe Silexx and can submit orders directly on the User's
behalf.\9\ The Exchange notes there will be a verification process for
Users that wish to access Cboe Silexx to ensure that each User is
authorized for direct Exchange access. Each verified User will require
a username and password to authenticate their access. The Exchange
notes that those authorized to directly access the Exchange must uphold
supervisory duties over those associated with it to ensure that only
authorized Users access the platform. Other than the above noted
differences, the new Cboe Silexx platform will function in the same
manner as the Silexx versions currently available to Users: It will be
completely voluntary; orders entered through the platform will receive
no preferential treatment as compared to orders electronically sent to
Cboe Options in any other manner; orders entered through the platform
will be subject to current trading rules in the same manner as all
other orders sent to the Exchange, which is the same as orders that are
sent through the Exchange's System today; the Exchange's System will
not distinguish between orders sent from Silexx and orders sent in any
other manner; and Silexx \10\ will provide technical support,
maintenance and user training for the new platform version upon the
same terms and conditions for all Users.\11\ The Exchange notes that it
currently offers a similar front-end order entry system, the PULSe
workstation, which also permits connectivity to Cboe Options. The
Exchange notes that no changes are being made to the other current
Silexx platform versions.
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\7\ Only Users authorized for direct access and who are approved
to trade FLEX Options may trade FLEX Options via Cboe Silexx.
\8\ See Securities Exchange Act Release No. 82088 (November 15,
2017) 82 FR 55449 (November 21, 2017) (SR-CBOE-2017-068).
\9\ The Exchange notes that Users may also send orders through a
Cboe Silexx certified broker, once brokers begin electing to become
certified. The Exchange has implemented a certification process
which is open to any broker that supports trading and will allow
Users without direct access to submit through an electronic broker
certified with Silexx. The Exchange currently conducts similar
certifications for any broker that wishes to connect to Cboe, and
for other platform offerings (e.g. PULSe).
\10\ Silexx is the wholly owned subsidiary of Cboe Options'
parent company, Cboe Global Markets, Inc., which purchased Silexx in
2017.
\11\ See Securities Exchange Act Release No. 82088 (November 15,
2017), 82 FR 55443 (November 21, 2017) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Describe
Functionality of and Adopt Fees for a New Front-End Order Entry and
Management Platform) (SR-CBOE-2017-068).
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The Exchange lastly noted that at this time, it does not propose to
assess a fee in connection with the Cboe Silexx platform.\12\
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\12\ The Exchange will submit a separate rule filing to address
any fees it may wish to adopt in the future.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\13\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \14\ 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) \15\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. Additionally, the Exchange also believes the
proposed rule change is consistent with Section 6(b)(4) of the Act,\16\
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.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
\15\ Id.
\16\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that offering the Cboe Silexx platform to
market participants protects investors and is in the public interest
because it will allow the Exchange to directly offer Users an order
entry and management tool for both non-FLEX and FLEX trading in
addition to the technology products it currently offers, such as the
other versions of the Silexx platform and the PULSe workstation.
Indeed, as noted above, the Cboe Silexx is essentially the same
platform as Silexx FLEX in particular, but merely allows for non-FLEX
trading in addition to supporting FLEX trading. In addition, firms can
create their own proprietary front-end order entry technology or obtain
systems with such functionality from third-party vendors.\17\ The
Exchange believes providing an alternative tool for trading, may
encourage more Users to submit orders in both FLEX and non-FLEX options
(including into price improvement auctions), which may lead to
additional execution opportunities for market participants and
liquidity in the market, which ultimately benefits investors.
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\17\ Market participants are free to do so by accessing the
Exchange's specs via the publicly accessible Application Programming
Interface and using such information in order to support trading
within their own technology, software, and front-end systems.
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The Exchange believes the proposed rule change does not
discriminate among market participants because use of the Cboe Silexx
platform is completely voluntary. Users can choose to route orders,
including to Cboe Options, and directly submit orders to Cboe Options,
without the use of the platform. The Exchange is making the platform
available as a convenience to market participants, who will continue to
have the option to use any order entry and management system available
in the marketplace to send orders to the Exchange and other exchanges;
the platform is merely an alternative that will be offered by the
Exchange. Cboe Silexx is not an exclusive means available to market
participants to send orders to Cboe Options or other markets. Any
orders sent through the platform to Cboe Options for execution will
receive no preferential treatment. Additionally, Cboe Silexx will be
available to all market participants, and the Exchange will license the
platform to market participants pursuant to the same terms and
conditions.
The Exchange believes Cboe Silexx removes impediments to and
perfects the mechanism of a free and open market and a national market
system because users have discretion to determine to which broker-
dealer they will route orders from the platform. Non-broker-dealer
users may separately enter into an agreement with a broker-dealer (the
Exchange will have no involvement with the entry into such agreements),
which can provide for routing to U.S. options and stock exchanges (and
trading centers). Only Trading Permit Holders will continue to be
permitted to directly submit orders using Cboe Silexx to Cboe Options,
and only members of other U.S. exchanges will be able to enter orders
for execution at those exchanges that they receive from the platform.
The Exchange also notes that broker-dealers must continue to ensure
that orders they receive from the platform will be subject to
applicable pre-trade risk control
[[Page 24047]]
requirements of the broker-dealer that directly submits the orders to
an exchange in accordance with Rule 15c3-5 under the Act.\18\
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\18\ See 17 CFR 240.15c3-5.
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The Exchange believes that its reasonable to not assess a monthly
Login ID fee for Cboe Silexx as market participants won't be subject to
a fee for this product. Additionally, the Exchange notes Silexx FLEX is
also currently provided at no cost.\19\ The Exchange believes not
assessing a fee at this time also serves as an incentive to market
participants to start using the Silexx platform as a trading tool on
their trading desks. The proposal is equitable and not unfairly
discriminatory as it applies to all market participants.
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\19\ See Cboe Silexx Fees Schedule.
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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 change will not
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
Exchange will make the Cboe Silexx version of the platform available to
all market participants and at no additional cost. Indeed, all market
participants may use Cboe Silexx, both those with direct access and
those without, by sending orders through the Exchange's broker
community who will be able to submit orders directly though Cboe
Silexx.
As described in detail above, the use of the platform will be
completely voluntary and market participants will continue to have the
flexibility to use any entry and management tool that is proprietary or
from third-party vendors, and/or market participants may choose any
executing brokers to enter their orders. The proposed platform is not
an exclusive means of trading, and if market participants believe that
other products, vendors, front-end builds, etc. available in the
marketplace are more beneficial than the Cboe Silexx platform, they may
simply use those products instead. Use of such functionality is
completely voluntary. Also, the Exchange notes that use of the platform
will not provide market participants with any additional access to the
Exchange than that which is available through the use of any other
front-end order entry system supporting trading. Orders executed
through the platform will not receive preferential treatment and the
Exchange's System will not distinguish between orders sent from Cboe
Silexx and orders sent in any other manner. The Exchange notes that
similar platforms, such as other Silexx versions and PULSe
workstations, are currently offered today.
The Exchange does not believe that the proposed change will impose
any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because Cboe
Options will be offering a type of product that is widely available
throughout the industry, including from some exchanges. As noted above,
market participants can also develop their own proprietary products
with the same functionality. Additionally, ISE currently offers a
similar front-end order entry application (PrecICE). The offering of
Cboe Silexx to market participants to enter and manage orders for
routing or submitting to U.S. exchanges will be an addition to the
Exchange's current suite of technology products it offers, including
other current Silexx platforms. As such, market participants will be
able to choose to execute, or continue to execute, orders through any
of these means.
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 \20\ and Rule 19b-
4(f)(6) thereunder.\21\
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\20\ 15 U.S.C. 78s(b)(3)(A).
\21\ 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 \22\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \23\ 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 requested that the Commission waive the 30-day operative delay so
that the proposed rule change may become operative upon filing. Cboe
Options asserts that the proposed rule change doesn't present novel or
unique issues because the proposed Cboe Silexx platform is similar to
technology already available on the Exchange.\24\ The Exchange notes
that the proposed Cboe Silexx platform is an extension of the Silexx
FLEX platform, with the main substantive difference being that it
permits entry of non-FLEX orders, as discussed above. The Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest. The Commission
hereby waives the operative delay and designates the proposed rule
change operative upon filing.\25\
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\22\ 17 CFR 240.19b-4(f)(6).
\23\ 17 CFR 240.19b-4(f)(6)(iii).
\24\ See supra note 6.
\25\ 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 will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2020-040 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.
[[Page 24048]]
All submissions should refer to File Number SR-CBOE-2020-040. 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-CBOE-2020-040 and should be submitted on
or before May 21, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
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\26\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09126 Filed 4-29-20; 8:45 am]
BILLING CODE 8011-01-P
